78476 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Parts 401, 405, 417, 422, 423, 

455, and 460 

Office of the Secretary 

45 CFR Part 170 

[CMS–4205–P] 

RIN 0938–AV24 

Medicare Program; Contract Year 2025 

Policy and Technical Changes to the 

Medicare Advantage Program, 

Medicare Prescription Drug Benefit 

Program, Medicare Cost Plan Program, 

and Programs of All-Inclusive Care for 

the Elderly; Health Information 

Technology Standards and 

Implementation Specifications 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), Office of the 

National Coordinator for Health 

Information Technology (ONC), 

Department of Health and Human 

Services (HHS). 

ACTION: Proposed rule. 

SUMMARY: This proposed rule would 

revise the Medicare Advantage (Part C), 

Medicare Prescription Drug Benefit (Part 

D), Medicare cost plan, and Programs of 

All-Inclusive Care for the Elderly 

(PACE) regulations to implement 

changes related to Star Ratings, 

marketing and communications, agent/ 

broker compensation, health equity, 

dual eligible special needs plans (D– 

SNPs), utilization management, network 

adequacy, and other programmatic 

areas. This proposed rule also includes 

proposals to codify existing subregulatory guidance in the Part C and 

Part D programs. 

DATES: To be assured consideration, 

comments must be received at one of 

the addresses provided below, no later 

than 5 p.m. on January 5, 2024. 

ADDRESSES: In commenting, please refer 

to file code CMS–4205–P. Because of 

staff and resource limitations, we cannot 

accept comments by facsimile (FAX) 

transmission. Comments, including 

mass comment submissions, must be 

submitted in one of the following three 

ways (please choose only one of the 

ways listed): 

1. Electronically. You may submit 

electronic comments on this regulation 

to https://www.regulations.gov. Follow 

the ‘‘Submit a comment’’ instructions. 

2. By regular mail. You may mail 

written comments to the following 

address ONLY: Centers for Medicare & 

Medicaid Services, Department of 

Health and Human Services, Attention: 

CMS–4205–P, P.O. Box 8013, Baltimore, 

MD 21244. 

Please allow sufficient time for mailed 

comments to be received before the 

close of the comment period. 

3. By express or overnight mail. You 

may send written comments to the 

following address ONLY: Centers for 

Medicare & Medicaid Services, 

Department of Health and Human 

Services, Attention: CMS–4205–P, Mail 

Stop C4–26–05, 7500 Security 

Boulevard, Baltimore, MD 21244–1850. 

For information on viewing public 

comments, see the beginning of the 

SUPPLEMENTARY INFORMATION section. 

FOR FURTHER INFORMATION CONTACT: 

Carly Medosch, (410) 786–8633— 

General Questions. 

Naseem Tarmohamed, (410) 786– 

0814—Part C and Cost Plan Issues. 

Lucia Patrone, (410) 786–8621—Part 

D Issues. 

Kristy Nishimoto, (206) 615–2367— 

Beneficiary Enrollment and Appeal 

Issues. 

Kelley Ordonio, (410) 786–3453— 

Parts C and D Payment Issues. 

Hunter Coohill, (720) 853–2804— 

Enforcement Issues. 

Lauren Brandow, (410) 786–9765— 

PACE Issues. 

Sara Klotz, (410) 786–1984—D–SNP 

Issues. 

Joe Strazzire, (410) 786–2775—RADV 

Audit Appeals Issues. 

Alexander Baker, (202) 260–2048— 

Health IT Standards. 

PartCandDStarRatings@

cms.hhs.gov—Parts C and D Star Ratings 

Issues. 

SUPPLEMENTARY INFORMATION: 

Inspection of Public Comments: All 

comments received before the close of 

the comment period are available for 

viewing by the public, including any 

personally identifiable or confidential 

business information that is included in 

a comment. We post all comments 

received before the close of the 

comment period on the following 

website as soon as possible after they 

have been received: https://

www.regulations.gov. Follow the search 

instructions on that website to view 

public comments. CMS will not post on 

Regulations.gov public comments that 

make threats to individuals or 

institutions or suggest that the 

commenter will take actions to harm an 

individual. CMS continues to encourage 

individuals not to submit duplicative 

comments. We will post acceptable 

comments from multiple unique 

commenters even if the content is 

identical or nearly identical to other 

comments. 

Plain Language Summary: In 

accordance with 5 U.S.C. 553(b)(4), a 

plain language summary of this 

proposed rule may be found at https:// 

www.regulations.gov/. 

I. Executive Summary 

A. Purpose 

The primary purpose of this proposed 

rule is to amend the regulations for the 

Medicare Advantage (Part C) program, 

Medicare Prescription Drug Benefit (Part 

D) program, Medicare cost plan 

program, and Programs of All-Inclusive 

Care for the Elderly (PACE). This 

proposed rule includes a number of new 

policies that would improve these 

programs beginning with contract year 

2025 and proposes to codify existing 

Part C and Part D sub-regulatory 

guidance. Please note that the new 

marketing and communications policies 

in this rule are proposed to be 

applicable for all contract year 2025 

marketing and communications, 

beginning September 30, 2024. This 

proposed rule also includes revisions to 

existing regulations in the Risk 

Adjustment Data Validation (RADV) 

audit appeals process and the appeals 

process for quality bonus payment 

determination that would take effect 

and apply 60 days after publication of 

a final rule. Revisions to existing 

regulations for the use and release of 

risk adjustment data would also take 

effect and apply 60 days after 

publication of a final rule. A limited 

number of the provisions in this rule are 

proposed to be applicable beginning 

with coverage on and after January 1, 

2026. 

Additionally, this proposed rule 

would implement certain sections of the 

following Federal laws related to the 

Parts C and D programs: 

• The Bipartisan Budget Act (BBA) of 

2018. 

• The Consolidated Appropriations 

Act (CAA), 2023. 

B. Summary of the Major Provisions 

1. Improving Access to Behavioral 

Health Care Providers 

We propose regulatory changes that 

would improve access to behavioral 

health care by adding certain behavioral 

health provider specialties to our MA 

network adequacy standards. 

Specifically, we propose to add a new 

facility-specialty type to the existing list 

of facility-specialty types evaluated as 

part of our network adequacy reviews. 

The new facility-specialty type, 

‘‘Outpatient Behavioral Health,’’ would 

be included in network adequacy 


ddrumheller on DSK120RN23PROD with PROPOSALS2
Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78477 

evaluations and can include: Marriage 

and Family Therapists (MFTs), Mental 

Health Counselors (MHCs), Opioid 

Treatment Program (OTP) providers, 

Community Mental Health Centers or 

other behavioral health and addiction 

medicine specialists and facilities. 

MFTs and MHCs will be eligible to 

enroll in Medicare and start billing for 

services beginning January 1, 2024, due 

to the new statutory benefit category 

established by the Consolidated 

Appropriations Act (CAA) 2023. We aim 

to strengthen network adequacy 

requirements and improve beneficiary 

access to behavioral health services and 

providers by expanding our network 

adequacy requirements for MA 

organizations. 

2. Special Supplemental Benefits for the 

Chronically Ill (SSBCI) 

We are proposing regulatory changes 

that would help ensure that SSBCI items 

and services offered are appropriate and 

improve or maintain the health or 

overall function of chronically ill 

enrollees. First, we are proposing to 

require that an MA organization must be 

able to demonstrate through relevant 

acceptable evidence that an item or 

service offered as SSBCI has a 

reasonable expectation of improving or 

maintain the health or overall function 

of a chronically ill enrollee, and must, 

by the date on which it submits its bid 

to CMS, establish a bibliography of this 

evidence. Second, we are proposing to 

clarify that an MA plan must follow its 

written policies based on objective 

criteria for determining an enrollee’s 

eligibility for an SSBCI when making 

such eligibility determinations. Third, 

we are proposing to require that the MA 

plan document its denials of SSBCI 

eligibility rather than its approvals. 

Additionally, we are proposing to codify 

CMS’s authority to review and deny 

approval of an MA organization’s bid if 

the MA organization has not 

demonstrated, through relevant 

acceptable evidence, that its proposed 

SSBCI has a reasonable expectation of 

improving or maintaining the health or 

overall function of the chronically ill 

enrollee. Finally, we propose to codify 

CMS’s authority to review SSBCI 

offerings annually for compliance, 

considering the evidence available at 

the time. These proposals, if 

implemented, would better ensure that 

the benefits offered as SSBCI are 

reasonably expected to improve health 

or overall function of the chronically ill 

enrollee while also guarding against the 

use of MA rebate dollars for SSBCI that 

are not supported by evidence. 

In addition, we are proposing new 

policies to protect beneficiaries and 

improve transparency regarding SSBCI 

so that beneficiaries are aware that 

SSBCI are only available to enrollees 

who meet specific eligibility criteria. We 

propose to modify and strengthen the 

current requirements for the SSBCI 

disclaimer that MA organizations 

offering SSBCI must use whenever 

SSBCI are mentioned. Specifically, we 

propose that the SSBCI disclaimer list 

the relevant chronic condition(s) the 

enrollee must have to be eligible for the 

SSBCI offered by the MA organization. 

We propose that the MA organization 

must convey in its SSBCI disclaimer 

that even if the enrollee has a listed 

chronic condition, the enrollee may not 

receive the benefit because other 

coverage criteria also apply. We also 

propose to establish specific font and 

reading pace parameters for the SSBCI 

disclaimer in print, television, online, 

social media, radio, other voice-based 

ads, and outdoor advertising (including 

billboards). Finally, we propose to 

clarify that MA organizations must 

include the SSBCI disclaimer in all 

marketing and communications 

materials that mention SSBCI. We 

believe that imposing these new SSBCI 

disclaimer requirements will help to 

ensure that the marketing of and 

communication about these benefits is 

not misleading or potentially confusing 

to enrollees who rely on these materials 

to make enrollment decisions. 

3. Mid-Year Enrollee Notification of 

Available Supplemental Benefits 

In addition, over the past several 

years, the number of MA plans offering 

supplemental benefits has increased. 

The benefits offered are broader in 

scope and variety and we are seeing an 

increasing amount of MA rebate dollars 

directed towards these benefits. At the 

same time, plans have reported that 

enrollee utilization of many of these 

benefits is low. It is not clear whether 

MA plans are actively encouraging 

utilization of these benefits by their 

enrollees. We propose requiring MA 

plans to notify enrollees mid-year of the 

unused supplemental benefits available 

to them. The notice would list any 

supplemental benefits not utilized by 

the beneficiary during the first 6 months 

of the year (1/1 to 6/30). Currently, MA 

plans are not required to send any 

communication specific to an enrollee’s 

usage of supplemental benefits which 

could be an important part of a plan’s 

overall care coordination efforts. This 

policy aims to educate enrollees on their 

access to supplemental benefits to 

encourage greater utilization of these 

benefits and ensure MA plans are better 

stewards of the rebate dollars directed 

towards these benefits. 

4. Enhance Guardrails for Agent and 

Broker Compensation 

Section 1851(j) of the Act requires 

that CMS develop guidelines to ensure 

that compensation to agents and brokers 

creates incentives to enroll individuals 

in MA plans that are intended to best 

meet their health care needs. To that 

end, for many years CMS has set upper 

limits on the amount of compensation 

agents and brokers can receive for 

enrolling Medicare beneficiaries into 

MA and PDP plans. We have learned, 

however, that many MA and PDP plans, 

as well as third-party entities with 

which they contract (such as Field 

Marketing Organizations (FMOs)) have 

structured payments to agents and 

brokers that have the effect of 

circumventing compensation caps. We 

also note that that these additional 

payments appear to be increasing. In 

this rule, we are proposing to generally 

prohibit contract terms between MA 

organizations and agents, brokers or 

other third party marketing 

organizations (TPMOs) that may 

interfere with the agent’s or broker’s 

ability to objectively assess and 

recommend the plan that best fits a 

beneficiary’s health care needs; set a 

single compensation rate for all plans; 

revise the scope of items and services 

included within agent and broker 

compensation; and eliminate the 

regulatory framework which currently 

allows for separate payment to agents 

and brokers for administrative services. 

We are also proposing to make 

conforming edits to the Part D agent 

broker compensation rules at 

§ 423.2274. Collectively, we believe the 

impact of these proposed changes will 

better align with statutory requirements 

and intent: to ensure that the use of 

compensation creates incentives for 

agents and brokers to enroll individuals 

in the plan that best fits a beneficiary’s 

health care needs. Further, such changes 

align with the Biden-Harris 

Administration’s commitment to 

promoting fair, open, and competitive 

markets and ensuring beneficiaries can 

make fully informed choices among a 

robust set of health insurance options. 

5. Annual Health Equity Analysis of 

Utilization Management Policies and 

Procedures 

We are proposing regulatory changes 

to the composition and responsibilities 

of the Utilization Management (UM) 

committee. We propose to require that 

a member of the UM committee have 

expertise in health equity. We also 

propose that the UM committee conduct 

an annual health equity analysis of the 

use of prior authorization. The proposed 


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78478 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

1See section III.Q., Changes to an Approved 

Formulary, of the proposed rule titled ‘‘Medicare 

Program; Contract Year 2024 Policy and Technical 

Changes to the Medicare Advantage Program, 

Medicare Prescription Drug Benefit Program, 

Medicare Cost Plan Program, Medicare Parts A, B, 

C, and D Overpayment Provisions of the Affordable 

Care Act and Programs of All-Inclusive Care for the 

Elderly; Health Information Technology Standards 

and Implementation Specifications,’’ which 

appeared in the December 27, 2022 Federal 

Register (87 FR 79452) (hereinafter referred to as 

the December 2022 proposed rule). 

analysis would examine the impact of 

prior authorization on enrollees with 

one or more of the following social risk 

factors (SRFs): (i) receipt of the lowincome subsidy or being dually eligible 

for Medicare and Medicaid (LIS/DE); or 

(ii) having a disability. To enable a more 

comprehensive understanding of the 

impact of prior authorization practices 

on enrollees with the specified SRFs, 

the proposed analysis must compare 

metrics related to the use of prior 

authorization for enrollees with the 

specified SRFs to enrollees without the 

specified SRFs. Finally, we propose to 

require MA organizations to make the 

results of the analysis publicly available 

on their website in a manner that is 

easily accessible and without barriers. 

6. Amendments to Part C and Part D 

Reporting Requirements 

We are proposing to affirm our 

authority to collect detailed information 

from MA organizations and Part D plan 

sponsors under current regulations, in 

keeping with the Biden-Harris 

administration’s focus on improving 

transparency and data in Medicare 

Advantage and Part D. This proposal 

would lay the groundwork for new data 

collection to be established through the 

Paperwork Reduction Act (PRA) 

process, which would provide advance 

notice to interested parties and be 

subject to public comment. An example 

of increased data collection could be 

service level data for all initial coverage 

decisions and plan level appeals, such 

as decision rationales for items, 

services, or diagnosis codes to have 

better line of sight on utilization 

management and prior authorization 

practices, among many other issues. 

7. Enhance Enrollees’ Right To Appeal 

an MA Plan’s Decision To Terminate 

Coverage for Non-Hospital Provider 

Services 

Beneficiaries enrolled in Traditional 

Medicare and MA plans have the right 

to a fast-track appeal by an Independent 

Review Entity (IRE) when their covered 

skilled nursing facility (SNF), home 

health, or comprehensive outpatient 

rehabilitation facility (CORF) services 

are being terminated. Currently, Quality 

Improvement Organizations (QIO) act as 

the IRE and conduct these reviews. 

Under current regulations, MA enrollees 

do not have the same access to QIO 

review of a fast-track appeal as 

Traditional Medicare beneficiaries. We 

are proposing to (1) require the QIO, 

instead of the MA plan, to review 

untimely fast-track appeals of an MA 

plan’s decision to terminate services in 

an HHA, CORF, or SNF; and (2) fully 

eliminate provision requiring the 

forfeiture of an enrollee’s right to appeal 

a termination of services decision when 

they leave the facility. These proposals 

would bring MA regulations in line with 

the parallel reviews available to 

beneficiaries in Traditional Medicare 

and expand the rights of MA 

beneficiaries to access the fast-track 

appeals process. 

8. Additional Changes to an Approved 

Formulary—Substituting Biosimilar 

Biological Products 

Under current policy, Part D sponsors 

must obtain explicit approval from CMS 

prior to making a midyear formulary 

change that removes a reference product 

and replaces it with a biosimilar 

biological product other than an 

interchangeable biological product. If 

such a change is approved, the Part D 

sponsor may apply the change only to 

enrollees who begin therapy after the 

effective date of the change. In other 

words, enrollees currently taking the 

reference product can remain on the 

reference product until the end of the 

plan year without having to obtain an 

exception. To increase access to 

biosimilar biological products, 

including interchangeable biological 

products, in the Part D program, 

consistent with the Biden-Harris 

Administration’s commitment to 

competition as outlined in Executive 

Order (E.O.) 14036: ‘‘Promoting 

Competition in the American 

Economy,’’ we previously proposed to 

permit Part D sponsors either to 

immediately substitute interchangeable 

biological products for their reference 

products and/or to treat such 

substitutions as changes applicable to 

all enrollees following 30 days’ notice.1

As we continue to consider comments 

received on that proposal, we are now 

also proposing to add substitutions of 

biosimilar biological products other 

than interchangeable biological 

products to the type of formulary 

changes that apply to all enrollees 

(including those already taking the 

reference product prior to the effective 

date of the change) following a 30-day 

notice. This proposed policy regarding 

formulary substitution of biosimilar 

biological products would parallel our 

current notice policy for formulary 

changes that cannot take place 

immediately. Under current 

§ 423.120(b)(5)(i), Part D sponsors must 

give 30 days’ advance notice to affected 

enrollees before removing or changing 

the tiered cost-sharing status of a Part D 

drug, unless, for instance, the formulary 

change qualifies for an immediate 

substitution. This proposal would not 

permit immediate formulary 

substitution of biosimilar biological 

products other than interchangeable 

biological products. 

9. Increasing the Percentage of Dually 

Eligible Managed Care Enrollees Who 

Receive Medicare and Medicaid 

Services From the Same Organization 

We are proposing interconnected 

proposals to (a) replace the current 

quarterly special enrollment period 

(SEP) with a one-time-per month SEP 

for dually eligible individuals and 

others enrolled in the Part D lowincome subsidy program to elect a 

standalone PDP, (b) create a new 

integrated care SEP to allow dually 

eligible individuals to elect an 

integrated D–SNP on a monthly basis, 

(c) limit enrollment in certain D–SNPs 

to those individuals who are also 

enrolled in an affiliated Medicaid 

managed care organization (MCO), and 

(d) limit the number of D–SNP plan 

benefit packages an MA organization, its 

parent organization, or entity that shares 

a parent organization with the MA 

organization, can offer in the same 

service area as an affiliated Medicaid 

MCO. This proposed rule would 

increase the percentage of dually 

eligible MA enrollees who are in plans 

that are also contracted to cover 

Medicaid benefits, thereby expanding 

access to integrated materials, unified 

appeal processes across Medicare and 

Medicaid, and continued Medicare 

services during an appeal. It would also 

reduce the number of plans overall that 

can enroll dually eligible individuals 

outside the annual coordinated election 

period, thereby reducing the number of 

plans deploying aggressive marketing 

tactics toward dually eligible 

individuals throughout the year. 

10. For D–SNP PPOs, Limit Out-ofNetwork Cost Sharing 

We are proposing to limit out-ofnetwork cost sharing for D–SNP 

preferred provider organizations (PPOs) 

for specific services. The proposed rule 

would reduce cost shifting to Medicaid, 

increase payments to safety net 

providers, expand dually eligible 

enrollees’ access to providers, and 

protect dually eligible enrollees from 

unaffordable costs. 


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Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78479 

11. Contracting Standards for Dual 

Eligible Special Needs Plan Look-Alikes 

Under existing regulations, CMS does 

not contract with and will not renew the 

contract of a D–SNP look-alike—that is, 

an MA plan that is not a SNP but in 

which dually eligible enrollees account 

for 80 percent or more of total 

enrollment. We are proposing to lower 

the D–SNP look-alike threshold from 80 

percent to 70 percent for plan year 2025 

and 60 percent for plan year 2026. This 

proposal would help address the 

continued proliferation of MA plans 

that are serving high percentages of 

dually eligible individuals without 

meeting the requirements to be a D– 

SNP. 

12. Standardize the Medicare Advantage 

(MA) Risk Adjustment Data Validation 

Appeals Process 

We propose regulatory language to 

address gaps and operational constraints 

included in existing RADV appeal 

regulations. Currently, if MA 

organizations appeal both medical 

record review determinations and 

payment error calculations resulting 

from RADV audits, both issues must be 

appealed and move through the appeals 

process concurrently, which we foresee 

could result in inconsistent appeal 

adjudications at different levels of 

appeal that impact recalculations of the 

payment error. This has the potential to 

cause burden, confuse MA 

organizations, and negatively impact the 

operations and efficiency of CMS’s 

appeals processes. This proposal would 

standardize and simplify the RADV 

appeals process for CMS and MA 

organizations, as well as address 

operational concerns at all three levels 

of appeal. We are proposing that MA 

organizations must exhaust all three 

levels of appeal for medical record 

review determinations before beginning 

the payment error calculation appeals 

process. This will ensure adjudication 

of medical record review determinations 

are final before a recalculation of the 

payment error is completed and subject 

to appeal. We also propose several other 

revisions to our regulatory appeals 

process to conform with these proposed 

changes to our procedures. 

C. Summary of Costs and Benefits 

BILLING CODE 4120–01–P 


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78480 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 


ddrumheller on DSK120RN23PROD with PROPOSALS2EP15NO23.006</GPH>

TABLE Al 

Provision Description Financial Impact 

1. Improving Access to Behavioral We propose to add a new facility-specialty type The new provision adds 

Health Care Providers called "Outpatient Behavioral Health" to the requirements for a new facility 

network adequacy standards under specialty type, which include 

§ 422.116(b )(2). For pmposes of the network providers some of which we have 

adequacy requirements, the new facility- data for and some which are new 

specialty type would be evaluated using time and and for which we lack data. 

distance and minimum number standards Therefore, we cannot quantify the 

proposed here. The new facility type would effects of this provision though 

include MFTs, MHCs, OTP or other behavioral we expect it may increase access 

health and addiction medicine specialists and which may qualitatively increase 

facilities. utilization. 

2. Special Supplemental Benefits for We propose to require MA organizations to The proposed requirements for 

the Chronically Ill (SSBCI) establish bibliographies for each SSBCI they SSBCI are not expected to have 

include in their bid to demonstrate that an SSBCI any economic impact on the 

has a reasonable expectation of improving or Medicare Trust Fund. 

maintaining the health or overall function of a 

chronically ill enrollee. This would shift the 

burden from CMS to the MA organizations to 

demonstrate compliance with this standard and 

help ensure that SSBCI items and services are 

offered based on current, reliable evidence. 

In addition, we are proposing new policies to 

protect beneficiaries and improve transparency 

regarding SSBCI so that beneficiaries are aware 

that SSBCI are only available to enrollees who 

meet specific eligibility criteria. We propose to 

modify and strengthen the current requirements 

for the SSBCI disclaimer that MA organizations 

offering SSBCI must use whenever SSBCI are 

mentioned. 

3. Mid-Year Enrollee Notification of We propose to require MA plans to issue notices Although the intent is to increase 

Available Supplemental Benefits to enrollees who, by June 30th of a given year, utilization and ultimately create a 

have not utilized supplemental benefits, to ensure savings to the Medicare Trust 

enrollees are aware of the availability of such Fund, we cannot currently 

benefits and ensure appropriate utilization. quantify this provision_because it 

is new, and we lack data. Sec the 

Regulatory Impact Analysis for 

further discussion. 
Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78481 


ddrumheller on DSK120RN23PROD with PROPOSALS2EP15NO23.007</GPH>

Provision Description Financial Impact 

4. Enhance Guardrails for We propose modifications to agent/broker There is a paperwork burden of 

Agent/Broker Compensation compensation requirements to further ensure about $31 million annually. Other 

payment arrangements and structure are aligned effects cannot be analyzed at this 

with CMS' s statutory obligation to set limits on time because of uncertainty; 

compensation to ensure that the use of however, we expect any impact 

compensation creates incentives for agents and would be minimal. See the 

brokers to enroll prospective enrollees in plans Regulatory Impact Analysis for 

that best fit their needs. further discussion. 

5. Annual Health Equity Analysis of We propose changes to the composition and We do not expect any cost impact 

Utilization Management Policies and responsibilities for the Utilization Management to the Medicare Trust Fund. 

Procedures committee, to require: a member of the UM 

committee have expertise in health equity; the 

UM committee conduct an annual health equity 

analysis of prior authorization used by the MA 

organization using specified metrics; and require 

MA organizations to make the results of the 

analysis publicly available on its website. 

6. Amendments to Part C and Part D We propose to affirm our authority to collect We do not expect any cost impact 

Reporting Requirements detailed data from MA organizations and Part D to the Medicare Trust Fund. 

plan sponsors under the Part C and D reporting 

reQuirements. 

7. Enhance Enrollees' Right to Appeal We propose to (1) require QIOs to review We do not expect any cost impact 

an MA Plan's Decision to Terminate untimely fast-track appeals of an MA plan's to the Medicare Trust Fund. 

Coverage for Non-Hospital Provider decision to terminate services in an HHA, 

Services CORF, or SNF and (2) eliminate the provision 

requiring the forfeiture of an enrollee's right to 

appeal to the QIO a termination of services 

decision when they leave the facilitv. 

8. Additional Changes to an Approved We propose to permit biosimilar biological We do not expect any cost impact 

Formulary-Substituting Biosimilar products other than interchangeable biological to the Medicare Trust Fund. 

Biological Products products2 to be substituted for their reference 

products without requiring that enrollees 

currently taking the reference product be exempt 

from the change for the remainder of the contract 

year. 

9. Increasing the Percentage of Dually We propose to (a) replace the current dual/LIS Over a 10-year horizon, we 

Eligible Managed Care Enrollees Who quarterly SEP, (b) create a new integrated care estimate a $1.3 billion savings to 

Receive Medicare and Medicaid SEP, (c) limit enrollment in certain D-SNPs to the Trust Fund for Part D plans 

Services from the Same Organization those individuals who are also enrolled in an and an additional $1 billion 

affiliated Medicaid MCO, and (d) limit the savings to the Trust Fund for Part 

number of D-SNPs an MA organization, its C plans. 

parent organization, or an entity that shares a 

parent organization with the MA organization, 

can offer in the same service area as an affiliated 

Medicaid MCO. 

10. For D-SNP PPOs, Limit Out-of- We propose to limit D-SNP PPOs' out-of- We do not expect any cost impact 

Network Cost Sharing network cost sharing for certain Part A and Part to the Medicare Trust Fund. 

B benefits, on an individual service level. 
78482 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

2We previously proposed that would provide 

Part D sponsors (choosing not to or unable to 

qualify to make immediate substitutions as 

proposed) the option to treat substitutions of 

interchangeable biological products for their 

reference products as changes applicable to all 

enrollees requiring 30 days’ notice for those 

currently taking a related reference product. See 

section III.Q. of the December 2022 proposed rule. 

These and other proposals discussed in section 

III.Q. of the December 2022 proposed rule have not 

been finalized and remain under consideration. 

BILLING CODE 4120–01–C 

II. Strengthening Current Medicare 

Advantage and Medicare Prescription 

Drug Benefit Program Policies: Past 

Performance 

We established at §§ 422.502(b) and 

423.503(b) that we may deny an 

application submitted by MA 

organizations and Part D sponsors that 

failed to comply with the requirements 

of a previous MA or Part D contract, 

which we refer to as ‘‘past 

performance.’’ We are proposing several 

technical changes to the regulation text 

related to past performance. These 

changes are intended to clarify the basis 

for application denials due to past 

performance and to ensure that the 

factors adequately account for financial 

difficulties that should prevent an 

organization from receiving a new or 

expanded MA or Part D contract. 

One factor we consider regarding the 

past performance of MA organizations 

and Part D sponsors is their record of 

imposition of intermediate sanctions, 

because intermediate sanctions 

represent significant non-compliance 

with MA or Part D contract 

requirements. To clarify the basis for 

application denials due to intermediate 

sanctions, at §§ 422.502(b)(1)(i)(A) and 

423.503(b)(1)(i)(A) we propose to 


ddrumheller on DSK120RN23PROD with PROPOSALS2EP15NO23.008</GPH>

Provision Description Financial Impact 

11. Contracting Standards for Dual We propose to lower the D-SNP look-alike We estimate this provision would 

Eligible Special Needs Plan Look- threshold from 80 percent to 70 percent for plan have an average annual impact of 

Alikes year 2025 and 60 percent for plan year 2026. less than $ IM for plan years 

2025-2027 due to non-SNP MA 

plans meeting the lower D-SNP 

look-alike threshold transitioning 

enrollees into other plans. We 

also estimate this provision would 

have an average annual impact of 

less than $ IM on MA plan 

enrollees for plan years 

2025-2027 due to enrollees 

choosing a different plan. We 

expect cumulative annual costs to 

non-SNP MA plans and MA plan 

enrollees beyond plan year 2027 

to also be less than $ IM oer vear. 

12. Standardiz.e the Medicare Revising when a medical record review The potential reduction in burden 

Advantage (MA) Risk Adjustment determination and a payment error calculation to MA organi:zations cannot be 

Data Validation (RADV) Appeals appeal can be requested and adjudicated is quantified prior to the 

Process necessary because RADY payment error implementation and execution of 

calculations are based upon the outcomes of the appeals process pursuant to 

medical record review determinations. We are these changes. 

also proposing other revisions to our regulatory 

appeals process to conform with these proposed 

changes. The proposed changes could reduce 

burden on some MA organizations that, absent 

these revisions, would have otherwise potentially 

submitted payment error calculation appeals that 

could have been rendered moot by certain types 

of medical record appeals decisions. The 

potential reduction in burden to MA 

organizations cannot be quantified prior to the 

implementation and execution of the appeals 

process pursuant to these changes. While the MA 

RADY appeals regulations have been in place 

for a period of years, CMS did not issue RADY 

overpayment findings to MA organizations as we 

worked to finalize a regulation on our long-term 

RADY methodology. Therefore, any impact of 

these proposed policies on MA organi:zation 

behavior is further unquantifiable. The proposed 

changes do not impose any new information 

collection requirements. 
Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78483 

change ‘‘Was subject to the imposition 

of an intermediate sanction’’ to ‘‘Was 

under an intermediate sanction.’’ We are 

proposing this revision because MA 

organizations and Part D sponsors may 

have a sanction imposed in one 12- 

month past performance review period 

and effective for all or part of the 

subsequent 12-month review period. For 

instance, CMS could impose a sanction 

in December 2022 that remains in effect 

until September 2023. The sanction 

would be in effect for the past 

performance review period that runs 

from March 2022 through February 2023 

(for Contract Year 2024 MA and Part D 

applications filed in February 2023) and 

for the past performance review period 

that runs from March 2023 through 

February 2024 (for Contract Year MA 

and Part D applications filled in 

February 2024). Our proposal reflects 

our stated intent to deny applications 

from MA organizations and Part D 

sponsors when an active sanction 

existed during the relevant 12-month 

review period when we previously 

codified that intermediate sanctions are 

a basis for denial of an application from 

an MA organization or Part D sponsor in 

‘‘Medicare and Medicaid Programs; 

Contract Year 2022 Policy and 

Technical Changes to the Medicare 

Advantage Program, Medicare 

Prescription Drug Benefit Program, 

Medicaid Program, Medicare Cost Plan 

Program, and Programs of All-Inclusive 

Care for the Elderly,’’ final rule which 

appeared in the Federal Register on 

January 19, 2021 (86 FR 5864) 

hereinafter referred to as the ‘‘January 

2021 final rule.’’ When we codified this 

requirement, a commenter requested 

that sanctions lifted during the 12 

months prior to the application denial 

be excluded from past performance. We 

responded that ‘‘The applying 

organization will receive credit for 

resolving the non-compliance that 

warranted the sanction during the next 

past performance review period, when, 

presumably, the organization will not 

have an active sanction in place at any 

time during the applicable 12-month 

review period’’ (86 FR 6000 through 

6001). Since an intermediate sanction 

may be active during multiple 

consecutive review periods, our 

proposed language clarifies that an 

organization’s application may be 

denied as long as the organization is 

under sanction, not just during the 12- 

month review period when the sanction 

was imposed. 

An additional factor we consider 

regarding the past performance of MA 

organizations and Part D sponsors is 

involvement in bankruptcy proceedings. 

At §§ 422.502(b)(1)(i)(C) and 

423.503(b)(1)(i)(C) we propose to 

incorporate Federal bankruptcy as a 

basis for application denials due to past 

performance and to conform the two 

paragraphs by changing the text to 

‘‘Filed for or is currently in Federal or 

State bankruptcy proceedings’’ from 

‘‘Filed for or is currently in State 

bankruptcy proceedings,’’ at 

§ 422.502(b)(1)(i)(C) and ‘‘Filed for or is 

currently under State bankruptcy 

proceedings’’ at § 423.503(b)(1)(i)(C). We 

codified State bankruptcy as a basis for 

an application denial for the past 

performance of an MA or Part D 

Sponsor in ‘‘Medicare Program; Contract 

Year 2023 Policy and Technical 

Changes to the Medicare Advantage and 

Medicare Prescription Drug Benefit 

Programs; Policy and Regulatory 

Revisions in Response to the COVID–19 

Public Health Emergency; Additional 

Policy and Regulatory Revisions in 

Response to the COVID–19 Public 

Health Emergency’’ which appeared in 

the Federal Register on May 9, 2022 (87 

FR 27704). We codified that 

requirement because bankruptcy may 

result in the closure of an organization’s 

operations and entering into a new or 

expanded contract with such an 

organization is not in the best interest of 

the MA or Prescription Drug program or 

the beneficiaries they serve. This 

concern is equally applicable to both 

Federal and State bankruptcy, so we 

propose to revise the regulation so that 

applications from MA organizations or 

Part D sponsors that have filed for or are 

in State or Federal bankruptcy 

proceedings may be denied on the basis 

of past performance. 

In addition, we are also proposing to 

correct two technical issues identified 

since the final rule was published in 

May 2022. At § 422.502(b)(1)(i)(B), we 

propose to change the reference to the 

requirement to maintain fiscally sound 

operations from § 422.504(b)(14) to the 

correct reference at § 422.504(a)(14). We 

also propose to remove the duplication 

of § 422.502(b)(1)(i)(A) and (B). 

III. Enhancements to the Medicare 

Advantage and Medicare Prescription 

Drug Benefit Programs 

A. Expanding Network Adequacy 

Requirements for Behavioral Health 

Section 1852(d)(1) of the Act allows 

an MA organization to select the 

providers from which an enrollee may 

receive covered benefits, provided that 

the MA organization, in addition to 

meeting other requirements, makes such 

benefits available and accessible in the 

service area with promptness and 

assures continuity in the provision of 

benefits. Further, our regulation at 

§ 422.112(a), requires that a coordinated 

care plan maintain a network of 

appropriate providers that is sufficient 

to provide adequate access to covered 

services to meet the needs of the 

population served. To establish 

standards for these requirements, CMS 

codified network adequacy criteria and 

access standards in the ‘‘Medicare 

Program; Contract Year 2021 Policy and 

Technical Changes to the Medicare 

Advantage Program, Medicare 

Prescription Drug Benefit Program, and 

Medicare Cost Plan Program’’ final rule, 

which appeared in the Federal Register 

on June 2, 2020 (85 FR 33796), 

hereinafter referred to as the ‘‘June 2020 

final rule.’’ In that final rule, we 

codified, at § 422.116(b), the list of 27 

provider specialty types and 13 facility 

specialty types subject to CMS network 

adequacy standards. Further, as part of 

the ‘‘Medicare Program; Contract Year 

2023 Policy and Technical Changes to 

the Medicare Advantage and Medicare 

Prescription Drug Benefit Programs’’ 

published in the Federal Register 

January 12, 2022 (87 FR 1842) proposed 

rule, hereinafter referred to as the 

‘‘January 2022 proposed rule,’’ we 

solicited comments through a Request 

for Information (RFI), regarding 

challenges in building MA behavioral 

health networks and opportunities for 

improving access to services. In 

response to the RFI, stakeholders 

commented on the importance of 

ensuring adequate access to behavioral 

health services for enrollees and 

suggested expanding network adequacy 

requirements to include additional 

behavioral health specialty types. As a 

result, in the ‘‘Medicare Program; 

Contract Year 2024 Policy and 

Technical Changes to the Medicare 

Advantage Program, Medicare 

Prescription Drug Benefit Program, 

Medicare Cost Plan Program, and 

Programs of All-Inclusive Care for the 

Elderly’’ final rule, which appeared in 

the Federal Register on April 12, 2023 

(88 FR 22120) hereinafter referred to as 

the ‘‘April 2023 final rule,’’ CMS 

finalized the addition of two new 

specialty types to the provider-specialty 

types list at § 422.116(b)(1), Clinical 

Psychology and Clinical Social Work, to 

be subject to the specific time and 

distance and minimum provider 

number requirements used in CMS’s 

network adequacy evaluation. 

While our regulation at 

§ 422.116(b)(3) authorizes the removal 

of a specialty or facility type from the 

network evaluation criteria for a specific 

year without rulemaking, CMS did not 

implement a process in § 422.116 to add 


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78484 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

3https://www.cms.gov/cms-behavioral-healthstrategy. 

new provider types without rulemaking. 

In a continued effort to address access 

to behavioral health services within MA 

networks, we are proposing to add to 

the list of provider specialties at 

§ 422.116(b) and add corresponding 

time and distance standards at 

§ 422.116(d)(2). 

In addition to meeting the network 

adequacy evaluation requirements, MA 

organizations are required at 

§ 422.112(a) to maintain and 

consistently monitor their provider 

networks to ensure they are sufficient to 

provide adequate access to covered 

services that meet the needs of 

enrollees. This also helps MA 

organizations maintain a complete and 

accurate health plan provider directory 

as required under §§ 422.111(b)(3) and 

422.120(b). The Health Plan 

Management System (HPMS) provides 

MA organizations with access to the 

‘‘Evaluate my Network’’ functionality, 

which allows MA organizations the 

opportunity to test their provider 

networks against the evaluation 

standards in § 422.116 outside of a 

formal network review. The ‘‘Evaluate 

my Network’’ functionality provides 

MA organizations the ability to test their 

networks using the standards in 

§ 422.116(a)(2) in different scenarios, 

including at the Plan Benefit Package 

(PBP) level, to consistently monitor 

whether their provider networks are 

meeting the current network adequacy 

standards. We encourage MA 

organizations to utilize the HPMS 

‘‘Evaluate my Network’’ tool to monitor 

their PBP-level active provider networks 

and keep abreast of any network issues 

that could hinder access to care for 

enrollees. We also remind MA 

organizations to report any compliance 

issues or significant changes in their 

provider network to their CMS Account 

Manager. 

With the revisions applicable 

beginning January 1, 2024, MA 

organizations are required to 

demonstrate that they meet network 

adequacy for four behavioral health 

specialty types: psychiatry, clinical 

psychology, clinical social work, and 

inpatient psychiatric facility services. 

The Consolidated Appropriations Act 

(CAA), 2023 (Pub. L. 117–328) amended 

the Act to authorize payment under 

Medicare Part B for services furnished 

by a Marriage and Family Therapist 

(MFT) and by a Mental Health 

Counselor (MHC), effective January 1, 

2024. Specifically, section 4121 of the 

CAA amends section 1861(s)(2) of the 

Act by adding a new subparagraph (II) 

that establishes a new benefit category 

under Part B for MFT services (as 

defined in section 1861(lll) of the Act) 

and MHC services (as defined in section 

1861(lll) of the Act). MA organizations 

are required to cover virtually all Part B 

covered services. As such, these new 

services must be covered as defined and 

furnished, respectively, by MFTs, as 

defined in section 1861(lll)(2) of the 

Act, and MHCs, as defined in section 

1861(lll)(4) of the Act. As a practical 

matter, MA organizations need to ensure 

access to these new Medicare-covered 

services that can only be provided by 

these types of individual providers and 

therefore must contract with these types 

of providers in order to furnish basic 

benefits as required by section 1852 of 

the Act (when furnished by different 

providers, the services would be 

supplemental benefits covered by the 

MA plan.) 

In addition, we discussed in the April 

2023 final rule, that the responses CMS 

received to the January 2022 proposed 

rule RFI emphasized the importance of 

expanding network adequacy standards 

to include other outpatient behavioral 

health physicians and health 

professionals that treat substance use 

disorders (SUDs) to better meet 

behavioral health care needs of 

enrollees. Medicare fee-for-service 

claims data for 2020 shows that Opioid 

Treatment Program (OTP) providers had 

the largest number of claims for SUD 

services during that timeframe. At the 

time of publishing our April 2023 final 

rule, we indicated that while we were 

not able to finalize adding a combined 

specialty type called ‘‘Prescribers of 

Medication for Opioid Use Disorder,’’ 

which included OTPs and Medication 

for Opioid Use Disorder (MOUD) 

waivered providers to the facilityspecialty type list in § 422.116(b)(2) as 

proposed, we would consider the 

appropriateness of setting network 

adequacy standards for OTPs in future 

rulemaking. 

Considering the statutory changes to 

section 1861 of the Act as mentioned, 

and our interest in establishing network 

adequacy standards for SUD providers, 

CMS is proposing to amend the MA 

network adequacy requirements to 

address the new provider types and 

SUD provider types through a combined 

behavioral health specialty type to 

include MFTs, MHCs, OTPs, 

Community Mental Health Centers and 

other behavioral health and addiction 

medicine specialty providers that will 

help us enhance behavioral health 

access for enrollees. This is consistent 

with the explanation in our April 2023 

final rule that setting a meaningful 

access standard for the OTP specialty 

type would be possible under a 

combined behavioral health specialty 

type. 

CMS is committed to improving 

access to behavioral health care services 

for enrollees in the MA program. The 

CMS Behavioral Health Strategy,3 aims 

to improve access and quality of mental 

health care and services, including, 

access to substance use disorder 

prevention and treatment services. We 

propose to extend network adequacy 

requirements to additional behavioral 

health and substance use disorder 

providers and facilities by adding time 

and distance and minimum provider 

number requirements for a combined 

provider category. Specifically, we are 

proposing to add Outpatient Behavioral 

Health as a new type of facility-specialty 

in § 422.116(b)(2) and to add Outpatient 

Behavioral Health to the time and 

distance requirements in 

§ 422.116(d)(2). For purposes of network 

adequacy evaluations under § 422.116, 

Outpatient Behavioral Health can 

include, MFTs (as defined in section 

1861(lll) of the Act), MHCs (as defined 

in section 1861(lll) of the Act), OTPs (as 

defined in section 1861(jjj) of the Act), 

Community Mental Health Centers (as 

defined in section 1861(ff)(3)(B) of the 

Act), or those of the following who 

regularly furnish or will regularly 

furnish behavioral health counseling or 

therapy services, including, but not 

limited to, psychotherapy or 

prescription of medication for substance 

use disorders: physician assistants, 

nurse practitioners, and clinical nurse 

specialists (as defined in section 

1861(aa)(5) of the Act); addiction 

medicine physicians; or outpatient 

mental health and substance use 

treatment facilities. Per § 422.2, the term 

‘‘provider’’ means (1) any individual 

who is engaged in the delivery of health 

care services in a State and is licensed 

or certified by the State to engage in that 

activity in the State; and (2) any entity 

that is engaged in the delivery of health 

care services in a State and is licensed 

or certified to deliver those services if 

such licensing or certification is 

required by State law or regulation. 

Although we are not using the term 

‘‘provider’’ specifically here in listing 

the type of healthcare professionals that 

we expect to be available to furnish 

services in order to count for purposes 

of the proposed new network evaluation 

standard, all applicable laws about the 

practice of medicine and delivery of 

health care services must be met and 

specific healthcare professionals must 

be appropriately licensed or certified to 

furnish the applicable services. 

We are proposing to add this 

combined facility-specialty type instead 


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Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78485 

4Bureau of Labor Statistics, U.S. Department of 

Labor, Occupational Outlook Handbook, Marriage 

and Family Therapists, at https://www.bls.gov/ooh/ 

community-and-social-service/marriage-andfamily-therapists.htm (visited July 03, 2023). 

5Bureau of Labor Statistics, U.S. Department of 

Labor, Occupational Outlook Handbook, Substance 

Abuse, Behavioral Disorder, and Mental Health 

Counselors, at https://www.bls.gov/ooh/communityand-social-service/substance-abuse-behavioraldisorder-and-mental-health-counselors.htm (visited 

July 06, 2023). 

6https://data.cms.gov/provider-characteristics/ 

medicare-provider-supplier-enrollment/opioidtreatment-program-providers. 

of adding individual provider-specialty 

types for a few reasons. First, data from 

the U.S. Department of Labor, Bureau of 

Labor Statistics show that currently 

MFTs and MHCs are generally 

providing services in outpatient 

behavioral health settings, such as 

community mental health centers, 

substance abuse treatment centers, 

hospitals, and some private practices.4 5

These types of clinical settings offer a 

fuller range of services and usually 

provide access to additional providers, 

such as advanced practice nurses and 

physician assistants who provide 

counseling and other therapeutic 

services to individuals with behavioral 

health conditions; our review of the 

Place of Service codes recorded on 

professional claims for behavioral 

health services in the Medicare FFS 

program illustrates this. In addition, 

currently, there are a limited number (if 

any) claims in the Medicare FFS 

program from MFTs and MHCs; 

combining the MFT and MHC provider 

types into the ‘‘Outpatient Behavioral 

Health’’ facility type provides time for 

CMS to develop additional data as FFS 

claims are submitted by MFTs and 

MHCs to show patterns of access to 

these provider types across the country. 

CMS needs such claims and utilization 

data to support the development of time 

and distance standards for these 

particular provider-specialty types. 

Finally, categorizing these provider 

specialties as a facility type is consistent 

with our practice, under § 422.116, 

wherein physical therapy (PT), 

occupational therapy (OT), and speech 

therapy (ST) providers have 

traditionally been categorized as facility 

types, even though care is typically 

furnished by individual health care 

providers. These provider types (that is, 

PT, OT, ST) are reported for network 

adequacy purposes under facility 

specialty types on Health Service 

Delivery (HSD) tables. 

As mentioned previously, the 

statutory change under the CAA will 

allow MFTs and MHCs to bill Medicare 

directly for services provided beginning 

January 1, 2024. We acknowledge that 

these provider types may not always be 

located in facilities and provide facilitybased services. As such, we will 

continue to monitor the appropriateness 

of maintaining this proposed new 

behavioral health specialty type as a 

facility-specialty type (that is, under 

§ 422.116(b)(2)) for network adequacy 

review purposes. Similarly, as the list 6

of OTPs enrolled in Medicare continues 

to expand, we will continue to monitor 

whether network adequacy for OTPs is 

best measured under a combined facility 

type for the purpose of network 

adequacy reviews. Thus, we may engage 

in future rulemaking to revise this 

requirement if the landscape of 

providers changes such that access 

would be best evaluated separately for 

MFTs, MHCs, or OTPs instead of under 

the one facility-specialty type we are 

proposing in this rule. Any related 

changes would be proposed in future 

rulemaking. At this time, we are 

proposing that MA organizations are 

allowed to include on their facility HSD 

tables the following: contracted 

individual practitioners, group 

practices, or facilities that are applicable 

under this specialty type. Under this 

proposal, MA organizations may not 

submit a single provider, for purposes of 

meeting more than one of our provider 

network requirements, for example, they 

cannot submit a single provider as a 

psychiatry, clinical social work, or 

clinical psychologist provider specialty 

and also as an Outpatient Behavioral 

Health facility. 

Our current regulations, at 

§ 422.116(a)(2), specify that an MA plan 

must meet maximum time and distance 

standards and contract with a specified 

minimum number of each provider and 

facility-specialty type. Therefore, as part 

of the proposed changes to our list of 

facility specialty types under 

§ 422.116(b)(2), we are proposing base 

time and distance standards in each 

county type for the new specialty type 

as follows: 

In the proposed rule titled ‘‘Medicare 

and Medicaid Programs; Contract Year 

2021 and 2022 Policy and Technical 

Changes to the Medicare Advantage 

Program, Medicare Prescription Drug 

Benefit Program, Medicaid Program, 

Medicare Cost Plan Program, and 

Programs of All-Inclusive Care for the 

Elderly’’ which appeared in the Federal 

Register on February 18, 2020 (85 FR 

9002) (hereinafter referred to as the 

‘‘February 2020 proposed rule’’), we 

explained how CMS developed the base 

time and distance standards and the 

minimum provider requirements used 

in § 422.116 (85 FR 9094 through 9103). 

Further, we explained in the February 

2020 proposed rule how CMS 

determines the minimum number 

requirement for all provider and facility 

specialty types, which is now codified 

in § 422.116(e). We codified at 

§ 422.116(e)(2)(iii) that all facilities, 

except for acute inpatient hospitals 

facilities, have a minimum number 

requirement of one. Because we had 

previously established paragraph 

(e)(2)(iii) to refer to all facility types 

listed in paragraphs (b)(2)(ii) through 

(xiv) and are proposing to add 

Outpatient Behavioral Health as a 

facility type at paragraph (b)(2)(xiv), we 

are not proposing any revisions to 

paragraph (e)(2)(iii). We followed the 

analysis and methodology described in 

the February 2020 proposed rule to 


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TABLE CA-1: MAXIMUM TIME AND DISTANCE STANDARDS: 

Large Metro Metro Micro Rural Counties with 

Extreme Access 

Considerations 

(CEAC) 

Provider/ Max Max Max Max Max Max Max Max Max Max 

Facility type Time Distance Time Distance Time Distance Time Distance Time Distance 

Outpatient Behavioral 

Health 20 10 40 25 55 40 60 50 110 100 
78486 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

develop the time and distance standards 

that we propose to apply to the new 

behavioral health facility-specialty type 

described here. However, we utilized 

updated data, including outpatient 

facility and professional Part B claims 

data from August 1, 2021, through July 

31, 2022, to inform our proposed 

standard. 

Finally, as we indicated in the April 

2023 final rule, Medicare FFS claims 

data shows that telehealth was the 

second most common place of service 

for claims with a primary behavioral 

health diagnosis in 2020 (88 FR 22170). 

Per § 422.116(d)(5), MA plans may 

receive a 10-percentage point credit 

towards the percentage of beneficiaries 

that reside within published time and 

distance standards for certain providers 

when the plan includes one or more 

telehealth providers of that specialty 

type that provide additional telehealth 

benefits, as defined in § 422.135, in its 

contracted network. Currently, 

§ 422.116(d)(5) specifies 14 specialty 

types for which the 10-percentage point 

credit is available. Because we 

understand from stakeholders who 

commented on our April 2023 final rule 

that they were supportive of usage of the 

10-percentage point credit for 

behavioral health specialty types, we 

also propose to add the new Outpatient 

Behavioral Health facility-specialty type 

to the list at § 422.116(d)(5) of the 

specialty types that that will receive the 

credit if the MA organization’s 

contracted network of providers 

includes one or more telehealth 

providers of that specialty type that 

provide additional telehealth benefits, 

as defined in § 422.135, for covered 

services. 

We welcome comment on this 

proposal. 

B. Standards for Electronic Prescribing 

(§ 423.160) 

1. Legislative Background 

Section 1860D–4(e) of the Act 

requires the adoption of Part D eprescribing standards. Part D sponsors 

are required to establish electronic 

prescription drug programs that comply 

with the e-prescribing standards that are 

adopted under this authority. For a 

further discussion of the statutory 

requirements at section 1860D–4(e) of 

the Act, refer to the proposed rule titled 

‘‘Medicare Program; E-Prescribing and 

the Prescription Drug Program,’’ which 

appeared in the February 4, 2005 

Federal Register (70 FR 6255). Section 

6062 of the Substance Use-Disorder 

Prevention that Promotes Opioid 

Recovery and Treatment for Patients 

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

hereinafter referred to as the SUPPORT 

Act, amended section 1860D–4(e)(2) of 

the Act to require the electronic 

transmission of ePA requests and 

responses for the Part D e-prescribing 

program to ensure secure ePA request 

and response transactions between 

prescribers and Part D sponsors for 

covered Part D drugs prescribed to Part 

D-eligible individuals. Such electronic 

transmissions must comply with 

technical standards adopted by the 

Secretary. There is generally no 

requirement that Part D prescribers or 

dispensers implement e-prescribing, 

with the exception of required 

electronic prescribing of Schedule II, III, 

IV, and V controlled substances that are 

Part D drugs, consistent with section 

2003 of the SUPPORT Act and as 

specified at § 423.160(a)(5). However, 

prescribers and dispensers who 

electronically transmit and receive 

prescription and certain other 

information regarding covered Part D 

drugs prescribed for Medicare Part D 

eligible beneficiaries, directly or 

through an intermediary, are required to 

comply with any applicable standards 

that are in effect. 

2. Regulatory History 

As specified at § 423.160(a)(1), Part D 

sponsors are required to support the 

Part D e-prescribing program transaction 

standards as part of their electronic 

prescription drug programs. Likewise, 

as specified at § 423.160(a)(2), 

prescribers and dispensers that conduct 

electronic transactions for covered Part 

D drugs for Part D eligible individuals 

for which a program standard has been 

adopted must do so using the adopted 

standard. Transaction standards are 

periodically updated to take new 

knowledge, technology, and other 

considerations into account. As CMS 

adopted specific versions of the 

standards when it initially adopted the 

foundation and final e-prescribing 

standards, there was a need to establish 

a process by which the standards could 

be updated or replaced over time to 

ensure that the standards did not hold 

back progress in the healthcare industry. 

CMS discussed these processes in the 

final rule titled ‘‘Medicare Program; EPrescribing and the Prescription Drug 

Program,’’ (hereinafter referred to as 

‘‘the November 2005 final rule’’) which 

appeared in the November 7, 2005 

Federal Register (70 FR 67579). An 

account of successive adoption of new 

and retirement of previous versions of 

various e-prescribing standards is 

described in the final rule titled 

‘‘Medicare Program; Revisions to 

Payment Policies Under the Physician 

Fee Schedule, Clinical Laboratory Fee 

Schedule & Other Revisions to Part B for 

CY 2014,’’ which appeared in the 

December 10, 2013 Federal Register (78 

FR 74229); the proposed rule titled 

‘‘Medicare Program; Contract Year 2019 

Policy and Technical Changes to the 

Medicare Advantage, Medicare Cost 

Plan, Medicare Fee-for-Service, the 

Medicare Prescription Drug Benefit 

Programs, and the PACE Program,’’ 

which appeared in the November 28, 

2017 Federal Register (82 FR 56336); 

and the corresponding final rule (83 FR 

16440), which appeared in the April 16, 

2018 Federal Register. The final rule 

titled ‘‘Medicare Program; Secure 

Electronic Prior Authorization For 

Medicare Part D,’’ which appeared in 

the December 31, 2020 Federal Register 

(85 FR 86824), codified the requirement 

that Part D sponsors support the use of 

NCPDP SCRIPT standard version 

2017071 for certain ePA transactions (85 

FR 86832). 

The final rule titled ‘‘Modernizing 

Part D and Medicare Advantage To 

Lower Drug Prices and Reduce Out-ofPocket Expenses,’’ which appeared in 

the May 23, 2019 Federal Register (84 

FR 23832), codified at § 423.160(b)(7) 

the requirement that Part D sponsors 

adopt an electronic RTBT capable of 

integrating with at least one prescriber’s 

electronic prescribing or electronic 

health record (EHR) system, but did not 

name a standard since no standard had 

been identified as the industry standard 

at the time (84 FR 23851). The 

electronic standards for eligibility 

transactions were codified in the final 

rule titled ‘‘Medicare and Medicaid 

Program; Regulatory Provisions to 

Promote Program Efficiency, 

Transparency, and Burden Reduction,’’ 

which appeared in the May 16, 2012 

Federal Register (77 FR 29001), to align 

with the applicable Health Insurance 

Portability and Accountability Act of 

1996 (HIPAA) standards. 

The Part D program has historically 

adopted electronic prescribing 

standards independently of other HHS 

components that may adopt electronic 

prescribing standards under separate 

authorities; however, past experience 

has demonstrated that duplicative 

adoption of health IT standards by other 

agencies within HHS under separate 

authorities can create significant burden 

on the healthcare industry as well as 

HHS when those standards impact the 

same technology systems. Notably, 

independent adoption of the NCPDP 

SCRIPT standard version 2017071 by 

CMS in various subsections of § 423.160 

(83 FR 16638) in 2018, which required 

use of the standard beginning in 2020, 

led to a period where ONC had to 

exercise special enforcement discretion 


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Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78487 

7HIPAA mandated the adoption of standards for 

electronically conducting certain health care 

administrative transactions between certain entities. 

HIPAA administrative requirements are codified at 

45 CFR part 162. See also: https://www.cms.gov/ 

about-cms/what-we-do/administrativesimplification. 

8 Due to discrepancies between prior regulatory 

timelines, adoption of the NCPDP SCRIPT standard 

version 2017071 in different rules led to a period 

where ONC had to exercise special enforcement 

discretion in the ONC Health IT Certification 

Program. See section III.C.5. for additional 

discussion. 

in its Health Information Technology 

(IT) Certification Program until the same 

version was incorporated into regulation 

at 45 CFR 170.205(b)(1) through the 

final rule titled ‘‘21st Century Cures Act: 

Interoperability, Information Blocking, 

and the ONC Health IT Certification 

Program,’’ which appeared in the May 1, 

2020 Federal Register (85 FR 25679). 

This resulted in significant impact on 

both ONC and CMS program resources. 

See section III.C. of this proposed rule 

for additional discussion of ONC’s 

proposal and authority. Similarly, the 

final rule titled ‘‘Medicare and Medicaid 

Program; Regulatory Provisions to 

Promote Program Efficiency, 

Transparency, and Burden Reduction,’’ 

which appeared in the May 16, 2012 

Federal Register (77 FR 29002), noted 

that, in instances in which an eprescribing standard has also been 

adopted as a HIPAA transaction 

standard in 45 CFR part 162, the process 

for updating the e-prescribing standard 

would have to be coordinated with the 

maintenance and modification of the 

applicable HIPAA transaction standard 

(77 FR 29018). 

3. Withdrawal of Previous Proposals 

and Summary of New Proposals 

CMS published a proposed rule, 

‘‘Medicare Program; Contract Year 2024 

Policy and Technical Changes to the 

Medicare Advantage Program, Medicare 

Prescription Drug Benefit Program, 

Medicare Cost Plan Program, Medicare 

Parts A, B, C, and D Overpayment 

Provisions of the Affordable Care Act 

and Programs of All-Inclusive Care for 

the Elderly; Health Information 

Technology Standards and 

Implementation Specifications’’ 

(hereinafter referred to as ‘‘the 

December 2022 proposed rule’’), which 

appeared in the Federal Register 

December 27, 2022 (87 FR 79452), in 

which we proposed updates to the 

standards to be used by Medicare Part 

D prescription drug plans for electronic 

prescribing (e-prescribing). The 

proposals in the December 2022 

proposed rule included a novel 

approach to updating e-prescribing 

standards by proposing to crossreference Part D requirements with 

standards adopted by the Office of the 

National Coordinator for Health 

Information Technology (ONC) and the 

standards adopted by HHS for electronic 

transactions under HIPAA 7 rather than 

the historical approach of adopting eprescribing standards in the Part D 

regulations independently or making 

conforming amendments to the Part D 

regulations in response to updated 

HIPAA standards for eligibility 

transactions. We proposed this 

approach in concert with ONC in order 

to mitigate potential compliance 

challenges for the healthcare industry 

and enforcement challenges for HHS 

that could result from independent 

adoption of such standards.8

In summary, the proposals in the 

December 2022 proposed rule included 

the following: 

• Requiring the National Council for 

Prescription Drug Plans (NCPDP) 

SCRIPT standard version 2022011, 

proposed for adoption at 45 CFR 

170.205(b), and retiring the current 

NCPDP SCRIPT standard version 

2017071, as the e-prescribing standard 

for transmitting prescriptions and 

prescription-related information, 

medication history, and electronic prior 

authorization (ePA) transactions using 

electronic media for covered Part D 

drugs for Part D eligible individuals. 

This proposal included a transition 

period from July 1, 2023 up to January 

1, 2025, when either version of the 

NCPDP SCRIPT standard could be used. 

The cross citation to 45 CFR 170.205(b) 

included an expiration date of January 

1, 2025 for NCPDP SCRIPT standard 

version 2017071 meaning that this 

version would expire for the purposes of 

HHS use and entities named at 

§ 423.160(a)(1) and (2) could use only 

NCPDP SCRIPT standard version 

2022011 as of that date; 

• Requiring the NCPDP Real-Time 

Prescription Benefit (RTPB) standard 

version 12, proposed for adoption at 45 

CFR 170.205(c), as the standard for 

prescriber real-time benefit tools 

(RTBTs) supported by Part D sponsors 

beginning January 1, 2025; and 

• Revising regulatory text referring to 

standards for eligibility transactions (87 

FR 79548) to cross reference standards 

adopted for electronic eligibility 

transactions in the HIPAA regulations at 

45 CFR 162.1202. 

We received 24 comments related to 

these proposals by the close of the 

comment period on February 13, 2023. 

Commenters largely supported the 

proposals; however, several 

commenters, including NCPDP, 

recommended that CMS require use of 

NCPDP SCRIPT standard version 

2023011, rather than NCPDP SCRIPT 

standard version 2022011. Similarly, 

NCPDP and other commenters 

recommended that CMS require NCPDP 

RTPB standard version 13, rather than 

NCPDP RTPB standard version 12. 

Several commenters expressed 

concerns about being able to 

successfully transition to NCPDP 

SCRIPT standard version 2022011 by 

January 1, 2025, and requested at least 

2 years from publication of a final rule 

to sunset NCPDP SCRIPT standard 

version 2017071. Several commenters 

noted that if the implementation of 

NCPDP SCRIPT standard version 

2022011 (or NCPDP SCRIPT standard 

version 2023011, as recommended by 

some commenters) is delayed, the 

January 1, 2025 compliance deadline for 

electronic prescribing of controlled 

substances (EPCS) in long-term care 

(LTC) facilities, as codified at 

§ 423.160(a)(5), should also be delayed 

accordingly, since the new versions of 

the NCPDP SCRIPT standard permit 3- 

way communication between the 

prescriber, LTC pharmacy, and LTC 

facility, enabling EPCS to occur reliably 

in the LTC setting. 

A commenter expressed concern that 

requiring use of the NCPDP SCRIPT 

standard imposes a financial barrier for 

independent pharmacies since NCPDP 

membership is required to access 

standards. CMS’s requirements at 

§ 423.160(a)(2) do not require that all 

pharmacies transmit, directly or through 

an intermediary, prescriptions and 

prescription-related information using 

electronic media for Part D drugs for 

Part D-eligible individuals, but (subject 

to exemptions in § 423.160(a)(3)) 

§ 423.160(a)(2) does require that when 

pharmacies do so, they must comply 

with the Part D electronic prescribing 

standards. CMS’s understanding is that 

a pharmacy management system vendor 

or software developer is the entity that 

incurs the direct costs associated with 

accessing the code and implementation 

guide associated with updating 

standards, not the pharmacy itself. We 

acknowledge that these costs may be 

passed on through license fees that the 

vendor charges to the pharmacy as 

normal costs of doing business. We are 

not aware of any open-source standards 

that could replace the NCPDP standards 

in the Part D program, but we invite 

comments on this topic. We also note in 

section III.C.10. of this proposed rule 

that interested parties may view 

materials proposed for incorporation by 

reference for free by following the 

instructions provided. 

CMS has considered these comments, 

reviewed NCPDP SCRIPT standard 


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78488 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

9HIPAA eligibility transaction standards were 

updated in final rule titled ‘‘Health Insurance 

Reform; Modifications to the Health Insurance 

Portability and Accountability Act (HIPAA) 

Electronic Transaction Standards,’’ which appeared 

in the January 16, 2009 Federal Register (74 FR 

3296). Conforming amendments to the Part D 

regulation were made in the final rule titled 

‘‘Medicare and Medicaid Program; Regulatory 

Provisions to Promote Program Efficiency, 

Transparency, and Burden Reduction,’’ which 

appeared in the May 16, 2012 Federal Register (77 

FR 29002). 

10 21st Century Cures Act: Interoperability, 

Information Blocking, and the ONC Health IT 

Certification Program final rule, which appeared in 

the May 1, 2020 Federal Register (85 FR 25642), 

and the Medicare Program; Contract Year 2019 

Policy and Technical Changes to the Medicare 

Advantage, Medicare Cost Plan, Medicare Fee-forService, the Medicare Prescription Drug Benefit 

Programs, and the PACE Program final rule, which 

appeared in the April 16, 2018 Federal Register (83 

FR 16440). 

11National Council for Prescription Drug 

Programs (NCPDP) SCRIPT Standard, 

Implementation Guide, Version 2023011, April 

2023. NCPDP SCRIPT standard implementation 

guides are available to NCPDP members for free and 

to non-members for a fee at ncpdp.org. The NCPDP 

SCRIPT standard version 2023011 implementation 

guide proposed for incorporation by reference in 

section III.C.10. of this proposed rule can be viewed 

by interested parties for free by following the 

instructions provided in that section. 

version 2023011 and NCPDP RTPB 

standard version 13, and identified 

areas where we can reorganize the 

regulatory text in § 423.160. 

Consequently, CMS is withdrawing all 

proposals contained in section III.S. 

Standards for Electronic Prescribing (87 

FR 79548) of the December 2022 

proposed rule. This approach will allow 

CMS to incorporate the feedback we 

received on prior proposals, seek 

comment on concerns raised in 

response to prior proposals, add new 

proposals, reorganize and make 

technical changes to the electronic 

prescribing regulations at § 423.160, and 

allow the public to comment on all 

Medicare Part D electronic prescribingrelated proposals simultaneously. 

In sections III.B.4. through III.B.9. of 

this proposed rule, the new proposals 

related to standards for electronic 

prescribing that we are putting forth 

encompass the following: 

• Requiring use of NCPDP SCRIPT 

standard version 2023011, proposed for 

adoption at 45 CFR 170.205(b)(2), and 

retiring use of NCPDP SCRIPT standard 

version 2017071 for communication of a 

prescription or prescription-related 

information supported by Part D 

sponsors. This proposal includes a 

transition period beginning on the 

effective date of the final rule during 

which either version of the NCPDP 

SCRIPT standard may be used. The 

transition period would end on January 

1, 2027, which is the date that ONC has 

proposed that NCPDP SCRIPT standard 

version 2017071 would expire for the 

purposes of HHS use, as described in 

section III.C.8.a. of this proposed rule. If 

finalized as proposed, starting January 

1, 2027, NCPDP SCRIPT standard 

version 2023011 would be the only 

version of the NCPDP SCRIPT standard 

available for HHS use and for purposes 

of the Medicare Part D electronic 

prescribing program; 

• Requiring use of NCPDP RTPB 

standard version 13 for prescriber 

RTBTs implemented by Part D sponsors 

beginning January 1, 2027; 

• Requiring use of NCPDP Formulary 

and Benefit (F&B) standard version 60, 

proposed for adoption at 45 CFR 

170.205(u), and retiring use of NCPDP 

F&B version 3.0 for transmitting 

formulary and benefit information 

between prescribers and Part D 

sponsors. This proposal includes a 

transition period beginning on the 

effective date of the final rule and 

ending January 1, 2027, during which 

entities would be permitted to use either 

NCPDP F&B version 3.0 (currently 

named in regulation at 

§ 423.160(b)(5)(iii) and proposed to be 

named at § 423.160(b)(3) consistent with 

the proposed technical changes in this 

rule) or NCPDP F&B standard version 

60, proposed for adoption at 45 CFR 

170.205(u). If finalized as proposed, 

starting January 1, 2027, only a version 

of the standard adopted for HHS use at 

45 CFR 170.205(u) would be permitted 

for use in Part D electronic prescription 

drug program, which would be NCPDP 

F&B standard version 60 if the proposal 

in section III.C.8.c. of this rule is 

finalized as proposed; 

• Cross-referencing standards 

adopted for eligibility transactions in 

HIPAA regulations at 45 CFR 162.1202 

for requirements related to eligibility 

inquiries; and 

• Making multiple technical changes 

to the regulation text throughout 

§ 423.160 by removing requirements and 

incorporations by reference that are no 

longer applicable, re-organizing existing 

requirements, and correcting a technical 

error. 

In these proposals, we propose a 

novel approach to updating eprescribing standards by crossreferencing Part D e-prescribing 

requirements with standards, including 

any expiration dates, adopted by ONC, 

as discussed in section III.C.5. of this 

proposed rule, and the standards 

adopted by HHS for electronic 

transactions under HIPAA. This 

approach differs from our historical 

approach of adopting e-prescribing 

standards in the Part D regulations 

independently or undertaking 

rulemaking to make conforming 

amendments to the Part D regulations in 

response to updated HIPAA standards 

for eligibility transactions.9 As ONC 

notes in section III.C.5., independent 

adoption of the NCPDP SCRIPT 

standard version 2017071 in different 

rules 10 led to a period where ONC had 

to exercise special enforcement 

discretion in the ONC Health IT 

Certification Program. We believe the 

proposed approach would mitigate 

potential compliance challenges for the 

healthcare industry and enforcement 

challenges for HHS that could result 

from independent adoption of such 

standards or asynchronous rulemaking 

cycles across programs. CMS invites 

comment on all aspects of these 

proposals. We also solicit comment on 

our proposals to cross-reference ONC 

regulations adopting NCPDP SCRIPT 

standard version 2023011, NCPDP RTPB 

standard version 13, and NCPDP F&B 

standard version 60. We solicit 

comment on the effect of the proposals 

that, taken together, would require use 

of these standards by January 1, 2027, as 

a result of ONC’s proposals to adopt 

these standards and retire previous 

versions, as well as our proposal to 

require use NCPDP F&B standard 

version 60 by that date. 

The NCPDP SCRIPT standards are 

used to exchange information among 

prescribers, dispensers, intermediaries, 

and Medicare prescription drug plans 

(PDPs). NCPDP has requested that CMS 

adopt NCPDP SCRIPT standard version 

2023011 because this version provides a 

number of enhancements to support 

electronic prescribing and transmission 

of prescription-related information.11

Accordingly, we propose to update 

§ 423.160 to specify where transactions 

for electronic prescribing, medication 

history, and ePA are required to utilize 

the NCPDP SCRIPT standard. The 

proposal, in conjunction with ONC’s 

proposal as described in section 

III.C.8.a. of this proposed rule, will 

allow for a transition period where 

either NCPDP SCRIPT standard version 

2017071 or 2023011 can be used, with 

exclusive use of NCPDP SCRIPT 

standard version 2023011 required by 

January 1, 2027. As described in section 

III.B.7., we solicit comment on the date 

by which use of the updated version of 

this and other standards proposed in 

this proposed rule would be required, if 

finalized as proposed. 

The NCPDP RTPB standard enables 

the real-time exchange of patientspecific eligibility, product coverage 

(including any restrictions and 

alternatives), and estimated cost sharing 

so prescribers have access to this 

information through a RTBT application 


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Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78489 

12National Council for Prescription Drug 

Programs (NCPDP) Real-Time Prescription Benefit 

Standard, Implementation Guide, Version 13, July 

2023. NCPDP RTPB standard implementation 

guides are available to NCPDP members for free and 

to non-members for a fee at ncpdp.org. The NCPDP 

RTPB standard version 13 implementation guide 

proposed for incorporation by reference in section 

III.C.10. of this proposed rule can be viewed by 

interested parties for free by following the 

instructions provided in that section. 

13Bhardwaj S, Miller SD, Bertram A, Smith K, 

Merrey J, Davison A. Implementation and cost 

validation of a real-time benefit tool. Am J Manag 

Care. 2022 Oct 1;28(10):e363–e369. doi: 10.37765/ 

ajmc.2022.89254. 

14National Council for Prescription Drug 

Programs (NCPDP) Formulary and Benefit Standard, 

Implementation Guide, Version 60, April 2023. 

NCPDP F&B standard implementation guides are 

available to NCPDP members for free and to nonmembers for a fee at ncpdp.org. The NCPDP F&B 

standard version 60 implementation guide 

proposed for incorporation by reference in section 

III.C.10. of this proposed rule can be viewed by 

interested parties for free by following the 

instructions provided in that section. 

15Babbrah P, Solomon MR, Stember L, Hill JW, 

Weiker M. Formulary & Benefit and Real-Time 

Pharmacy Benefit: Electronic standards delivering 

value to prescribers and pharmacists. J Am Pharm 

Assoc. 2023 May–June;63(3):725–730. https://

doi.org/10.1016/j.japh.2023.01.016. 

16https://standards.ncpdp.org/Our-Process.aspx. 17NCPDP University. How Industry Needs Drive 

Changes in Standards. Accessed August 15, 2023, 

from https://member.ncpdp.org (member-only 

content). 18NCPDP University. Voting: The Life Cycle of 

Standards Approval. Accessed August 15, 2023, 

from https://member.ncpdp.org (member-only 

content). 19https://www.ncpdp.org/Membershipdiversity.aspx. 20https://standards.ncpdp.org/Standards/media/ 

pdf/Correspondence/2022/202201NCPDPSCRIPTNextVersionLetter.pdf. 21Extensibility is a term in software engineering 

that is defined as the quality of being designed to 

allow the addition of new capabilities or 

functionality. See: Ashaolu B. What is 

Extensibility? Converged. February 17, 2021. 

Available from: https://converged

.propelsoftware.com/blogs/what-is-extensibility. 

at the point-of-prescribing.12 13 As 

discussed in section III.B.5. of this 

proposed rule, as currently codified at 

§ 423.160(b)(7), CMS requires that Part 

D sponsors implement one or more 

electronic RTBTs that are capable of 

integrating with at least one prescriber’s 

electronic prescribing system or 

electronic health record, as of January 1, 

2021; however, at the time CMS 

established this requirement, no single 

industry RTPB standard was available. 

NCPDP has since developed an RTPB 

standard. We propose to require the 

most current version, NCPDP RTPB 

standard version 13, as the standard for 

prescriber RTBTs at § 423.160(b)(5) 

starting January 1, 2027. 

The NCPDP F&B standard is a batch 

standard that provides formulary and 

benefit information at the plan level 

rather than at the patient level. The 

NCPDP F&B standard complements 

other standards utilized for electronic 

prescribing, electronic prior 

authorization, and real-time 

prescription benefit applications.14 15

We propose to require use of NCPDP 

F&B standard version 60, and retire 

NCPDP F&B standard version 3.0, 

beginning January 1, 2027, and after a 

transition period during which either 

version may be used. 

Eligibility inquiries utilize the NCPDP 

Telecommunication standard or 

Accredited Standards Committee X12N 

270/271 inquiry and response 

transaction for pharmacy or other health 

benefits, respectively. The Part D 

program has adopted standards based 

on the HIPAA electronic transaction 

standards, which have not been updated 

for more than a decade. HHS has 

proposed updates to the HIPAA 

electronic transaction standards for 

retail pharmacies (87 FR 67638) in the 

proposed rule titled ‘‘Administrative 

Simplification: Modifications of Health 

Insurance Portability and 

Accountability Act of 1996 (HIPAA) 

National Council for Prescription Drug 

Programs (NCPDP) Retail Pharmacy 

Standards; and Adoption of Pharmacy 

Subrogation Standard,’’ (hereinafter 

referred to as ‘‘the November 2022 

Administrative Simplification proposed 

rule’’), which appeared in the Federal 

Register November 9, 2022 (87 FR 

67634). We propose to update the Part 

D regulation at § 423.160(b)(3) to require 

that eligibility transactions utilize the 

applicable standard named as the 

HIPAA standard for electronic eligibility 

transactions at 45 CFR 162.1202. Since 

45 CFR 162.1202 currently identifies the 

same standards that are named at 

§ 423.160(b)(3)(i) and (ii), we anticipate 

no immediate impact from this 

proposed change in regulatory language. 

Our proposal, however, would ensure 

that Part D electronic prescribing 

requirements for eligibility transactions 

align with the HIPAA standard for 

electronic eligibility transactions should 

a newer version of the NCPDP 

Telecommunication (or other) standards 

be adopted as the HIPAA standard for 

these types of electronic transactions, if 

HHS’ proposals in the November 2022 

Administrative Simplification proposed 

rule are finalized or as a result of any 

future HHS rules. 

4. Requiring NCPDP SCRIPT Standard 

Version 2023011 as the Part D 

Electronic Prescribing Standard, 

Retirement of NCPDP SCRIPT Standard 

Version 2017071, and Related 

Conforming Changes in § 423.160 

The NCPDP SCRIPT standard has 

been the adopted electronic prescribing 

standard for transmitting prescriptions 

and prescription-related information 

using electronic media for covered Part 

D drugs for Part D eligible individuals 

since foundation standards were named 

in the final rule titled ‘‘Medicare 

Program; E-Prescribing and the 

Prescription Drug Program,’’ which 

appeared in the November 7, 2005 

Federal Register (70 FR 67568), at the 

start of the Part D program. The NCPDP 

SCRIPT standard is used to exchange 

information among prescribers, 

dispensers, intermediaries, and 

Medicare prescription drug plans. In 

addition to electronic prescribing, the 

NCPDP SCRIPT standard is used in 

electronic prior authorization (ePA) and 

medication history transactions. 

Although electronic prescribing is 

optional for physicians, except as to 

Schedule II, III, IV, and V controlled 

substances that are Part D drugs 

prescribed under Part D, and 

pharmacies, the Medicare Part D statute 

and regulations require drug plans 

participating in the prescription benefit 

to support electronic prescribing, and 

physicians and pharmacies who elect to 

transmit prescriptions and related 

communications electronically must 

utilize the adopted standards except in 

limited circumstances, as codified at 

§ 423.160(a)(3). 

NCPDP’s standards development 

process involves a consensus-based 

approach to solve emerging needs of the 

pharmacy industry or to adapt NCPDP 

standards to changes made by other 

standards development organizations.16

Emerging needs of the pharmacy 

industry may be the result of legislative 

or regulatory changes, health IT 

innovations, patient safety issues, 

claims processing issues, or electronic 

prescribing-related process 

automation.17 Changes to standards are 

consensus-based and driven by the 

NCPDP membership, which includes 

broad representation from pharmacies, 

insurers, pharmacy benefit managers, 

Federal and State government agencies, 

and vendors serving all the 

stakeholders.18 19

In a letter to CMS dated January 14, 

2022, NCPDP requested that CMS adopt 

NCPDP SCRIPT standard version 

2022011, given the number of updates 

and enhancements that had been added 

to the standard since NCPDP SCRIPT 

standard version 2017071 was 

adopted.20 NCPDP summarized the 

major enhancements in NCPDP SCRIPT 

standard version 2022011 relative to the 

currently required NCPDP SCRIPT 

standard version 2017071. Those 

summarized enhancements include— 

• General extensibility; 21

• Redesign of the Product/Drug 

groupings requiring National Drug Code 


ddrumheller on DSK120RN23PROD with PROPOSALS2
78490 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

22National Council for Prescription Drug 

Programs (NCPDP) SCRIPT Standard, 

Implementation Guide, Version 2023011, April 

2023. NCPDP SCRIPT standard implementation 

guides are available to NCPDP members for free and 

to non-members for a fee at ncpdp.org. The NCPDP 

SCRIPT standard version 2023011 implementation 

guide proposed for incorporation by reference in 

section III.C.10. of this proposed rule can be viewed 

by interested parties for free by following the 

instructions provided in that section. 

23https://standards.ncpdp.org/Standards/media/ 

pdf/Correspondence/2023/20230213_To_CMS_

CMS_4201_P_NPRM.pdf. 

(NDC) for DrugCoded element, but not 

for NonDrugCoded element; 

• Addition of Observation elements 

to Risk Evaluation and Mitigation 

Strategies (REMS) transactions; 

• Addition of 

ProhibitRenewalRequest to 

RxChangeResponse and 

RxRenewalResponse; 

• Modification of Structured and 

Codified Sig Structure format; and 

• Additional support related to dental 

procedure codes, RxBarCode, 

PatientConditions, patient gender and 

pronouns, 

TherapeuticSubstitutionIndicator, 

multi-party communications, and 

withdrawal/retracting of a previous sent 

message using the 

MessageIndicatorFlag. 

Subsequently, in the December 2022 

proposed rule, CMS proposed to require 

NCPDP SCRIPT standard version 

2022011 and retire NCPDP SCRIPT 

standard version 2017071, after a 

transition period, by cross referencing 

the standards as proposed for adoption 

by ONC. In response to this proposal, 

NCPDP and many other commenters 

recommended that CMS instead adopt 

the more current NCPDP SCRIPT 

standard version 2023011. NCPDP 

SCRIPT standard version 2023011, like 

NCPDP SCRIPT standard version 

2022011, includes the functionality that 

supports a 3-way transaction (that is, 

multi-party communication) among 

prescriber, facility, and pharmacy, 

which will enable EPCS in the LTC 

setting.22 In its comments on the 

December 2022 proposed rule,23 NCPDP 

highlighted specific enhancements 

within NCPDP SCRIPT standard version 

2023011 that are not present in NCPDP 

SCRIPT standard version 2022011, 

which include: 

• Addition of an optional element in 

the header for OtherReferenceNumber 

for multi-party communication 

transactions, such as those in LTC; 

• Addition of a response type of 

Pending for RxChangeResponse and 

RxRenewalResponse for communicating 

when to expect an approval or denial of 

the request or delays in approval or 

denial of requests; 

• Addition of a new 

RequestExpirationDate element to 

NewRxRequest, RxChangeRequest, and 

RxRenewalRequest to notify the 

prescriber to not send a response after 

this date; 

• Addition of a new a new element 

NoneChoiceID to PASelectType so that 

a ‘‘none of the above’’ answer can be 

selected by the provider and allow 

branching to the next question in a 

series; 

• Addition of a new element for 

REMSReproductivePotential replacing 

REMSPatientRiskCategory in the 

prescribed medication element group in 

the NewRx and RxChangeRequest 

message and in the replace medication 

element group for the 

RxRenewalResponse; 

• Addition of a new element group of 

ReviewingProvider to the Resupply and 

Recertification messages to allow for the 

reporting of the provider who reviewed 

the chart and certified continued need 

of a specific medication; and 

• Revised guidance in the SCRIPT 

Implementation Guide. 

NCPDP SCRIPT standard version 

2023011 is fully backwards compatible 

with NCPDP SCRIPT standard version 

2017071. This allows for a less 

burdensome implementation process 

and flexible adoption timeline for 

pharmacies, payers, prescribers, health 

IT vendors, and intermediaries involved 

in electronic prescribing, since 

backwards compatibility permits a 

transition period where both versions of 

the NCPDP SCRIPT standards may be 

used simultaneously without the need 

for entities involved to utilize a 

translator program. 

Even though we are withdrawing the 

proposals contained in section III.S. 

Standards for Electronic Prescribing in 

the December 2022 proposed rule (87 

FR 79548), we have considered 

comments we received on the December 

2022 proposed rule when crafting our 

proposals for this proposed rule. For 

instance, several commenters asked that 

CMS clearly indicate that the proposed 

version of the NCPDP SCRIPT standard 

will apply to medication history 

functions. Several commenters noted 

that the regulation text at 

§ 423.160(b)(4)(ii) does not list the 

NCPDP SCRIPT standard-specific 

medication history transactions. 

Commenters asked that CMS list the 

corresponding medication history 

transactions (RxHistoryRequest and 

RxHistoryResponse) in the regulation 

text so as to minimize ambiguity. After 

considering these comments, we 

propose to list the RxHistoryRequest 

and RxHistoryResponse transactions at 

§ 423.160(b)(1)(i)(U) subsequent to our 

technical reorganization of the section 

proposed in section III.B.9. of this rule, 

rather than list the transactions under 

§ 423.160(b)(4). 

With respect to ePA transactions in 

the NCPDP SCRIPT standard currently 

listed at § 423.160(b)(8)(i)(A) through 

(D) (PAInitiationRequest, 

PAInitiationResponse, PARequest, 

PAResponse, PAAppealRequest, 

PAAppealResponse, PACancelRequest, 

PACancelResponse) and a new ePA 

transaction (PANotification) available in 

NCPDP SCRIPT standard version 

2023011, we propose to list all 

transactions at § 423.160(b)(1)(i)(V) 

through (Z). We are proposing new 

language at § 423.160(b)(1) to indicate 

that the transactions listed must comply 

with a standard in proposed 45 CFR 

170.205(b) ‘‘as applicable to the version 

of the standard in use’’ since an older 

version of a standard may not support 

the same transactions as the newer 

version of the standard. For example, 

during the proposed transition period 

where either NCPDP SCRIPT version 

2017071 or NCPDP SCRIPT standard 

version 2023011 may be used, entities 

that are still using NCPDP SCRIPT 

standard version 2017071 would not be 

expected to use the PANotification 

transaction because the PANotification 

transaction is only supported in the 

NCPDP SCRIPT standard version 

2023011. 

Since the NCPDP SCRIPT standard 

version 2023011 is fully backwards 

compatible with NCPDP SCRIPT 

standard version 2017071, the 

pharmacies, payers, prescribers, health 

IT vendors, and intermediaries involved 

in electronic prescribing can 

accommodate a transition period when 

either version may be used. That is, 

during a transition period, transactions 

taking place between entities using 

different versions of the same standard 

maintain interoperability without the 

need for entities to utilize (that is, 

purchase) a translator software program. 

The cross reference to proposed 45 CFR 

170.205(b) permits a transition period 

starting as of the effective date of a final 

rule during which either NCPDP 

SCRIPT standard version 2017071 or 

NCPDP SCRIPT standard version 

2023011 may be used. If finalized as 

proposed, the transition period will end 

and exclusive use of NCPDP SCRIPT 

standard version 2023011 will be 

required starting January 1, 2027, when 

NCPDP SCRIPT standard version 

2017071 will expire for the purposes of 

HHS use. 

Instead of independently naming the 

NCPDP SCRIPT standard version 

2023011 and incorporating the 

corresponding implementation guide by 


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Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78491 

24https://standards.ncpdp.org/Standards/media/ 

pdf/Correspondence/2022/202201NCPDPSCRIPTNextVersionLetter.pdf. 

reference at § 423.160(c), we propose at 

§ 423.160(b)(1) to cross reference a 

standard in 45 CFR 170.205(b). ONC 

proposes to adopt NCPDP SCRIPT 

standard version 2023011 in 45 CFR 

170.205(b)(2) as described in section 

III.C.8.a. of this proposed rule. The 

proposed approach would enable CMS 

and ONC to avoid misalignment from 

independent adoption of NCPDP 

SCRIPT standard version 2023011 for 

their respective programs. Updates to 

the standard would impact 

requirements for both programs at the 

same time, ensure consistency, and 

promote alignment for providers, 

payers, and health IT developers 

participating in and supporting the 

same prescription transactions. See 

section III.C.5. of this proposed rule for 

additional discussion of this 

coordination effort. 

In its letter to CMS requesting CMS to 

adopt NCPDP SCRIPT standard version 

2022011, NCPDP requested that CMS 

identify certain transactions for 

prescriptions for which use of the 

standard is mandatory.24 As previously 

mentioned in this preamble, in response 

to the December 2022 proposed rule, 

NCPDP and other commenters requested 

additional transactions be named in 

regulation. As part of our proposed 

reorganization of § 423.160, we propose 

to list all transactions associated with 

the NCPDP SCRIPT standard 

requirements in one place in the 

regulation. We propose the transactions 

for prescriptions, ePA, and medication 

history for which use of the standard is 

mandatory at § 423.160(b)(1)(i)(A) 

through (Z), as described in Table C–C1. 

BILLING CODE 4120–01–P 


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TABLE C-Cl: PROPOSED TRANSACTIONS FOR COMMUNICATION OF 

PRESCRIPTION AND PRESCRIPTION RELATED INFORMATION USING THE 

NCPDPSCRIPTSTANDARD 

Transaction Function Supported by Transaction25 

GetMessage Requests from a mailbox, a renewal prescription request, 

prescription change request, new prescription request, 

prescription fill status notification, verification, transfer 

request, transfer response, transfer confirmation or an error or 

other transactions that have been sent by a pharmacy or 

prescriber system. 

Status Relays acceptance of a transaction back to the sender. 

Error Indicates an error has occurred indicating the request was 

terminated. 

RxChangeRequest and Request from a pharmacy to a prescriber asking for a change in 

RxChangeResponse a new or "fillable" prescription; additional usage includes 

verification of prescriber credentials and request on a prior 

authorization from the payer. Response is sent from a prescriber 

to the requesting pharmacy to either approve, approve with 

change, validate, or deny the request. 

RxRenewalRequest and Request from the pharmacy to the prescriber requesting 

RxRenewalResponse additional refills. Response is sent from the prescriber to the 

requesting pharmacy to allow pharmacist to provide a patient 

with additional refills, a new prescription, or decline to do 

either. 
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Transaction Function Suooorted bv Transaction25 

Resupply Request from a Long Term or Post-Acute Care (LTPAC) 

organization to a pharmacy to send an additional supply of 

medication for an existing order. 

Verify Response to a pharmacy or prescriber indicating that a 

transaction requesting a return receipt has been received. 

CancelRx and Request from the prescriber to the pharmacy to inactivate a 

CancelRxResponse previously sent prescription. Response is sent from the 

pharmacy to the prescriber to acknowledge a cancel request. 

RxFill Indicates the dispensing or activity status. It is the notification 

from one entity to another conveying the status of dispensing 

activities or other clinical activities. 

DrugAdministration Communicates drug administration events from a 

prescriber/care facility to the pharmacy or other entity. It is a 

notification from a prescriber/care facility to a pharmacy or 

other entity that a drug administration event has occurred. 

NewRxRequest Request from a pharmacy to a prescriber for a new prescription 

for a patient. If approved, a NewRx transaction would be sent. 

NewRx New prescription is sent from the prescriber to the pharmacy 

electronically so it can be dispensed to a patient. 

NewRxResponseDenied Denied response to a previously sent NewRxRequest. 

RxTransferlnitiationRequest Used when the destination pharmacy is asking for a transfer of 

(previously named one or more prescriptions for a specific patient from the source 

RxTransferRequest in pharmacy. 

NCPDP SCRIPT standard 

version 2017071) 

RxTransfer (previously In the solicited model, it is the response to the 

named RxTransferResponse RxTransferlnitiationRequest which includes the prescription(s) 

NCPDP SCRIPT standard being transferred from the source pharmacy to the destination 

version 2017071) pharmacy or a rejection of the transfer request. In the 

unsolicited model, it is a push of the prescription(s) being 

transferred from the source pharmacy to the destination 

pharmacy. 

RxTransferConfirm Used by the destination pharmacy to confirm the transfer 

prescription has been received and the transfer is complete. 

RxFilllndicatorChange Sent to the receiver to indicate the sender is changing the types 

ofRxFill responses that were previously requested. The sender 

may modify the fill status notification of transactions previously 

selected or cancel future RxFill transactions. 

Recertification Notification on behalf of a reviewing provider to a pharmacy 

recertifying the continued administration of a medication order. 

Used in LTPAC only. 

REMSiinitiationRequest and Request to the REMS Administrator for the information 

REMSiinitiationResponse required to submit a REMS request (REMSRequest) for a 

specified patient and drug. Response is from the REMS 

Administrator with the information required to submit a REMS 

request (REMSRequest) for a specified patient and drug. 
Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78493 

25Section 4. Business Functions, and Section 5. 

Transactions. National Council for Prescription 

Drug Programs (NCPDP) SCRIPT Standard, 

Implementation Guide, Version 2023011, April 

2023. NCPDP SCRIPT standard implementation 

guides are available to NCPDP members for free and 

to non-members for a fee at ncpdp.org. The NCPDP 

SCRIPT standard version 2023011 implementation 

guide proposed for incorporation by reference in 

section III.C.10. of this proposed rule can be viewed 

by interested parties for free by following the 

instructions provided in that section. 

BILLING CODE 4120–01–C 

The transactions specific to electronic 

prescribing remain the same as those 

required for NCPDP SCRIPT standard 

version 2017071 (currently codified at 

§ 423.160(b)(2)(iv)(A) through (Z)), 

except where renamed as noted in Table 

C–C1. The transactions specific to ePA 

are also the same as those required with 

NCPDP SCRIPT standard version 

2017071, with one additional 

transaction (PA Notification), which 

was incorporated into the standard after 

NCPDP SCRIPT standard version 

2017071. As discussed in section 

III.C.8.a. of this proposed rule, NCPDP 

SCRIPT standard version 2023011 is 

proposed for adoption at 45 CFR 

170.205(b)(2), and NCPDP SCRIPT 

standard version 2017071 is proposed to 

expire January 1, 2027, at 45 CFR 

170.205(b)(1). Consequently, should we 

finalize our proposal, use of NCPDP 

SCRIPT standard version 2023011 for 

the transactions related to electronic 

prescribing, medication history, and 

ePA (proposed at § 423.160(b)(1)(i)(A) 

through (Z)) will be mandatory starting 

January 1, 2027, if ONC’s proposed 

adoption of NCPDP SCRIPT version 

2023011 and proposed expiration date 

for NCPDP SCRIPT version 2017071 are 

adopted as proposed. 

As stated previously, in response to 

the December 2022 proposed rule, 

several commenters pointed out that if 

mandatory use of an updated version of 

the NCPDP SCRIPT standard is delayed, 

then the EPCS requirement in LTC 

facilities should also be delayed 

accordingly, since NCPDP SCRIPT 

standard version 2017071 lacks 

appropriate guidance for LTC facilities. 

CMS was aware of this limitation in the 

NCPDP SCRIPT standard version 


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Transaction Function Supported by Transaction25 

REMSRequest and Request to the REMS Administrator with information (answers 

REMSResponse to question set; clinical documents) to make a REMS 

determination (approved, denied, pended, etc.). Response is the 

determination from the REMS administrator whether dispensing 

authorization can be granted. 

RxHistoryRequest and Request from one entity to another for a list of medications that 

RxHistoryResponse have been prescribed, dispensed, claimed or indicated by the 

patient. Response includes the medications that were dispensed 

or obtained within a certain timeframe, optionally including the 

prescriber that prescribed them. 

P AinitiationRequest and Request from the submitter to a payer for the information 

P AinitiationResponse required to submit a prior authorization request (PARequest) for 

a specified patient and product. Response is from a payer to the 

submitter with the information required to submit a prior 

authorization request (PARequest) for a specified patient and 

product. 

P ARequest and Request from the submitter to the payer with information 

PAResponse (answers to question set; clinical documents) for the payer to 

make a PA determination (approved, denied, pended, etc.). 

Response from the payer to the submitter indicates the status of 

a P ARequest. Response could be a PA determination, notice 

that the request is in process, or specify that more information is 

required. 

P AAppealRequest and Request from the submitter to the payer to appeal a PA 

P AAppealResponse; determination. Response from the payer to the submitter 

indicates what information is needed for an appeal or the status 

or outcome of a P AAppealRequest. 

PACancelRequest and Request from the submitter to the payer to notify the payer that 

P ACancelResponse the PA request is no longer needed. Response from the payer to 

the submitter indicates the if the PA request was cancelled or 

not. 

PAN otification Alerts the pharmacist or prescriber when a PA has been 

requested, or when a PA determination has been received. 
78494 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

26https://www.healthit.gov/isa/section/ 

pharmacyinteroperability. 

27Supporting Electronic Prescribing Under 

Medicare Part D. September 19, 2008. https://

www.hhs.gov/guidance/document/supportingelectronic-prescribing-under-medicare-part-d. 

28https://standards.ncpdp.org/Standards/media/ 

pdf/Correspondence/2021/20210820_To_CMS_

RTPBandFandBStandardsAdoptionRequest.pdf. 

2017071, and acknowledged the 

challenges to EPCS faced by LTC 

facilities in the proposed rule ‘‘Medicare 

Program; CY 2022 Payment Policies 

Under the Physician Fee Schedule and 

Other Changes to Part B Payment 

Policies; Medicare Shared Savings 

Program Requirements; Provider 

Enrollment Regulation Updates; 

Provider and Supplier Prepayment and 

Post-Payment Medical Review 

Requirements’’ (hereinafter referred to 

as ‘‘the July 2022 proposed rule’’), 

which appeared in the Federal Register 

July 23, 2021 (86 FR 39104). However, 

in the July 2022 proposed rule, CMS 

also stated that we understood that 

NCPDP was in the process of creating 

specific guidance for LTC facilities 

within the NCPDP SCRIPT standard 

version 2017071, which would allow 

willing partners to enable 3-way 

communication between the prescriber, 

LTC facility, and pharmacy to bridge 

any outstanding gaps that impede 

adoption of the NCPDP SCRIPT 

standard version 2017071 in the LTC 

setting (86 FR 39329). 

Similarly, in the ‘‘Medicare Program; 

CY 2022 Payment Policies Under the 

Physician Fee Schedule and Other 

Changes to Part B Payment Policies; 

Medicare Shared Savings Program 

Requirements; Provider Enrollment 

Regulation Updates; and Provider and 

Supplier Prepayment and Post-Payment 

Medical Review Requirements’’ final 

rule (hereinafter referred to as ‘‘the 

November 2021 final rule’’), which 

appeared in the Federal Register 

November 19, 2021 (86 FR 64996), CMS 

acknowledged that although 3-way 

communication is not as seamless in 

NCPDP SCRIPT standard version 

2017071 as it was expected to be in later 

versions, EPCS was still possible with 

some modifications (86 FR 65364). CMS 

delayed EPCS compliance for 

prescribers’ prescriptions written for 

beneficiaries in a LTC facility from 

January 1, 2022, to no earlier than 

January 1, 2025, in order to give 

prescribers additional time to make the 

necessary changes to conduct electronic 

prescribing of covered Part D controlled 

substance prescriptions for Part D 

beneficiaries in LTC facilities using 

NCPDP SCRIPT standard version 

2017071 (86 FR 65365). We are not 

proposing a change in the EPCS 

compliance date for covered Part D 

controlled substance prescriptions for 

Part D beneficiaries in LTC on the basis 

of the proposed adoption of NCPDP 

SCRIPT standard version 2023011; 

however, we invite comment on the 

status of EPCS in LTC and the degree to 

which LTC facilities have been able to 

implement guidance from NCPDP to 

meet the EPCS requirement. 

As proposed, § 423.160(b)(1) would 

require use of the version or versions of 

the NCPDP SCRIPT standard adopted in 

45 CFR 170.205(b) to carry out the 

transactions listed in 

§ 423.160(b)(1)(i)(A) through (Z). 

However, it would not require that all 

transactions be utilized if they are not 

needed or are not relevant to the entity. 

We refer readers to ONC’s 

Interoperability Standards Advisory 

(ISA) website for descriptions and 

adoption level of transactions in the 

NCPDP SCRIPT standard.26 For 

example, we have been informed that 

the ‘‘GetMessage’’ transaction described 

in Table C–C1 is not widely used among 

prescribers. For this reason, we are 

reiterating guidance 27 that the NCPDP 

SCRIPT standard transactions named 

are not themselves mandatory, but 

rather they are to be used as applicable 

to the entities specified at 

§ 423.160(a)(1) and (2) when they are 

completing or supporting the 

transmission of information related to 

electronic prescriptions, electronic prior 

authorization, or medication history. We 

believe the pharmacies, payers, 

prescribers, health IT vendors, and 

intermediaries involved in electronic 

prescribing have been utilizing the 

standards in this manner, based on 

discussions with NCPDP. 

In summary, with respect to changes 

related to adopting, via cross-reference 

to ONC proposals in section III.C.8.a., 

NCPDP SCRIPT standard version 

2023011 and retiring NCPDP SCRIPT 

standard version 2017071, we propose a 

revised paragraph § 423.160(b)(1) to: 

• Consolidate all transactions for 

electronic prescribing, ePA, and 

medication history for which use of the 

NCPDP SCRIPT standard is mandatory 

at § 423.160(b)(1)(i)(A) through (Z); and 

• Indicate that communication of 

prescriptions and prescription-related 

transactions listed must comply with a 

standard in 45 CFR 170.205(b). In 

conjunction with ONC proposals in 

section III.C.8.a., this cross-reference 

would permit a transition period when 

either NCPDP SCRIPT standard versions 

2017071 or 2023011 may be used 

beginning as of the effective date of a 

final rule and ending January 1, 2027, 

because, as ONC has proposed at 45 

CFR 170.205(b)(1), the NCPDP SCRIPT 

standard version 2017071 would expire 

January 1, 2027, after which only 

NCPDP SCRIPT standard version 

2023011 would be available for HHS 

use. 

We solicit comment on these 

proposals. 

5. Requiring NCPDP Real-Time 

Prescription Benefit (RTPB) Standard 

Version 13 

In the May 2019 final rule (84 FR 

23832), which implemented the 

statutory provision at section 1860D– 

4(e)(2)(D) of the Act, CMS required at 

§ 423.160(b)(7) that Part D plan sponsors 

implement, by January 1, 2021, one or 

more electronic real-time benefit tools 

(RTBT) capable of integrating with at 

least one prescriber’s e-prescribing 

system or electronic health record (EHR) 

to provide prescribers with complete, 

accurate, timely, clinically appropriate, 

patient-specific formulary and benefit 

information. CMS indicated that the 

formulary and benefit information 

provided by the tool should include 

cost, clinically appropriate formulary 

alternatives, and utilization 

management requirements because, at 

that time, an industry standard for 

RTBTs had not been identified (84 FR 

23833). NCPDP has since developed and 

tested an RTPB standard for use with 

RTBT applications. The NCPDP RTPB 

standard enables the real-time exchange 

of information about patient eligibility 

and patient-specific formulary and 

benefit information. For a submitted 

drug product, the RTPB standard will 

indicate coverage status, coverage 

restrictions, and estimated patient 

financial responsibility. ‘‘Estimated’’ 

financial responsibility accounts for the 

fact that the RTPB transaction transmits 

the patient’s cost sharing at that 

particular moment in time, which could 

later change if the claim is processed at 

a later date or in a different sequence 

relative to other claims (for example, an 

RTPB transaction could show a cost 

sharing that reflects a deductible or 

particular stage in the Part D benefit 

which could be different from when the 

prescription claim is actually processed 

by the pharmacy if other claims were 

processed in the interim). The RTPB 

standard also supports providing 

information on alternative pharmacies 

and products. In an August 20, 2021 

letter to CMS, NCPDP described these 

features and recommended adoption of 

RTPB standard version 12.28

Subsequently, in the December 2022 

proposed rule, CMS proposed that Part 

D sponsors’ RTBTs comply with NCPDP 

RTPB standard version 12. In response 


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Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78495 

29https://standards.ncpdp.org/Standards/media/ 

pdf/Correspondence/2023/20230213_To_CMS_

CMS_4201_P_NPRM.pdf. 

30Everson J, Dusetzina SB. Real-time Prescription 

Benefit Tools—The Promise and Peril. JAMA Intern 

Med. 2022;182(11):1137–1138. Doi:10.1001/ 

jamainternmed.2022.3962. 31Real-Time Benefit Check: Key Insights and 

Challenges. May 2021. Accessed January 1, 2023. 

Available at: https://

www.hmpgloballearningnetwork.com/site/frmc/ 

cover-story/real-time-benefit-check-key-insightsand-challenges. 

32American Medical Association. Council on 

Medical Service. Access to Health Plan Information 

regarding Lower-Cost Prescription Options 

(Resolution 213–NOV–20). Available from https://

councilreports.ama-assn.org/councilreports/ 

downloadreport?uri=/councilreports/n21_cms_

report_2.pdf. 

to that proposal, NCPDP and many other 

interested parties provided comments to 

CMS recommending that CMS instead 

require NCPDP RTPB standard version 

13. In their comments on the December 

2022 proposed rule,29 NCPDP listed 

enhancements in NCPDP RTPB standard 

version 13 that improve the information 

communicated between the payer and 

the prescriber. These enhancements 

include: 

• Addition of a Coverage Status 

Message to enable the payer to 

communicate at the product level 

additional clarifying coverage 

information which is not codified; 

• Addition of values to the Coverage 

Restriction Code and data elements to 

codify information communicated in the 

Message to reduce the number of free 

text messages on the response; 

• Addition of a next available fill date 

to communicate when the patient is 

eligible to receive a prescription refill in 

a discrete field instead of via a free text 

message; 

• Addition of fields to communicate 

formulary status and preference level of 

both submitted and alternative products 

in order to clarify pricing; and 

• Addition of data elements on the 

request transaction to convey the 

patient’s address, State/province, zip/ 

postal code and country to aid in 

coverage determinations. 

Even though we are withdrawing the 

proposals contained in section III.S. 

Standards for Electronic Prescribing in 

the December 2022 proposed rule (87 

FR 79548), we have considered 

comments we received on the December 

2022 proposed rule when crafting our 

proposals related to RTBTs for this 

proposed rule. A commenter on the 

December 2022 proposed rule requested 

that CMS specify that adoption of the 

NCPDP RTPB standard should not 

impede what the commenter refers to as 

the industry standard of sending 4 drugs 

or 4 pharmacies for pricing in a single 

transaction. We understand that each 

transaction between a prescriber EHR 

and the payer or processor is associated 

with a degree of latency (that is, the 

amount of time it takes for the RTBT 

request to travel from the electronic 

prescribing system to the payer or 

processor and return a response with 

the patient’s cost sharing and formulary 

status information for the submitted 

drug). In order to populate information 

on alterative formulary drugs or 

alternative pharmacies, if one 

alternative is submitted per transaction, 

then the latency associated with each 

transaction becomes additive. If the total 

latency is too long, then either the RTBT 

request may ‘‘time out’’ and a response 

may never be presented to the 

prescriber, or the prescriber may simply 

not wait long enough for the RTBT 

response before moving on through the 

electronic prescribing process. To 

illustrate the concept at the center of 

this issue, if each RTBT transaction is 

associated with 1 second of latency, 

then 1 transaction containing the 

submitted drug, plus 3 alternatives 

should return the patient-specific cost 

and formulary status information for all 

4 drugs within 1 second. However, if the 

submitted drug and each alternative are 

sent as separate transactions, then the 

total time to return the RTBT response 

becomes 4 seconds (1 second × 4 

transactions). This longer response time 

increases the likelihood that the 

prescriber will not wait for the 

information to populate or that that EHR 

system will cause the transaction to 

time out, meaning the patient-specific 

cost and formulary status information 

are not presented to the prescriber. CMS 

takes interest in how adoption of the 

proposed NCPDP RTPB standard 

version 13 could alter functionality of 

RTBTs already in use. CMS created 

requirements for RTBTs in the absence 

of an industry-wide standard because of 

their potential to increase drug price 

transparency and lower out-of-pocket 

costs for Medicare Part D enrollees. The 

impact of RTBTs is contingent on 

prescribers actually receiving the 

patient-specific information in the 

response from the payer. CMS 

appreciates that this is relatively new 

technology and that there are multiple 

factors that contribute to the overall 

impact of RTBTs in real-world 

settings.30 31 32 Nevertheless, we seek 

comment on the issue raised by the 

commenter. We ask interested parties 

for their perspective on whether 

requiring the NCPDP RTPB standard 

version 13 would limit the ability to 

send more than one drug or pharmacy 

per RTBT transaction, and if so, whether 

the benefit of adopting a standard for 

prescriber RTBTs in order to enable 

widespread integration across EHRs and 

payers outweighs such limitation. 

The NCPDP RTPB standard version 13 

standard is designed for prescriber, not 

beneficiary (that is, consumer), RTBTs. 

CMS emphasizes that we are not 

proposing a required standard for 

beneficiary RTBTs. Beneficiary RTBTs 

are made available directly to Part D 

plan enrollees by the Part D sponsor; 

therefore, beneficiary RTBT applications 

do not necessarily interface with an 

electronic prescribing system or EHR, as 

prescriber RTBTs must. Consequently, 

CMS believes that Part D sponsors can 

retain the flexibility to use beneficiary 

RTBTs that are based on an available 

standard or a custom application, as 

long as the information presented to 

enrollees meets CMS’s requirements 

codified at § 423.128(d)(4). The 

requirements for the beneficiary RTBT 

are discussed in the final rule titled 

‘‘Medicare and Medicaid Programs; 

Contract Year 2022 Policy and 

Technical Changes to the Medicare 

Advantage Program, Medicare 

Prescription Drug Benefit Program, 

Medicaid Program, Medicare Cost Plan 

Program, and Programs of All-Inclusive 

Care for the Elderly,’’ which appeared in 

the January 19, 2021 Federal Register 

(86 FR 5864). We decline to propose a 

standard for beneficiary RTBTs at this 

time, however we welcome comments 

on this topic which we may consider for 

future rulemaking. 

As discussed in section III.C.8.b. of 

this proposed rule, ONC proposes to 

adopt the NCPDP RTPB standard 

version 13 at 45 CFR 170.205(c)(1). We 

therefore propose at § 423.160(b)(5) to 

require that beginning January 1, 2027, 

Part D sponsors’ prescriber RTBT must 

comply with a standard in 45 CFR 

170.205(c). 

We solicit comment on these 

proposals and the related issues raised. 

6. Requiring NCPDP Formulary and 

Benefit Standard Version 60 and 

Retirement of NCPDP Formulary and 

Benefit Standard Version 3.0 

The NCPDP Formulary and Benefit 

(F&B) standard provides a uniform 

means for prescription drug plan 

sponsors to communicate plan-level 

formulary and benefit information to 

prescribers through electronic 

prescribing/EHR systems. The NCPDP 

F&B standard transmits, on a batch 

basis, data on the formulary status of 

drugs, preferred alternatives, coverage 

restrictions (that is, utilization 

management requirements), and cost 

sharing consistent with the benefit 

design (for example, cost sharing for 

drugs on a particular tier). The NCPDP 


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78496 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

33Babbrah P, Solomon MR, Stember LA, Hill JW, 

Weiker M. Formulary & benefit and real-time 

pharmacy Benefit: Electronic standards delivering 

value to prescribers and pharmacists. J Am Pharm 

Assoc (2003). 2023 May–Jun;63(3):725–730. doi: 

10.1016/j.japh.2023.01.016. 

34https://standards.ncpdp.org/Standards/media/ 

pdf/Correspondence/2023/20230404-to-CMSFormulary-and-Benefit-V60-Request.pdf. 

35https://standards.ncpdp.org/Standards/media/ 

pdf/Correspondence/2021/20210820_To_CMS_

RTPBandFandBStandardsAdoptionRequest.pdf. 

36https://standards.ncpdp.org/Standards/media/ 

pdf/Correspondence/2022/202201NCPDPSCRIPTNextVersionLetter.pdf. 

F&B standard serves as a foundation for 

other electronic prescribing functions 

including ePA, real-time benefit check, 

and specialty medication eligibility 

when used in conjunction with other 

standards.33 NCPDP F&B standard 

version 3.0 is required for transmitting 

formulary and benefits information 

between prescribers and Medicare Part 

D sponsors, consistent with the existing 

text of § 423.160(b)(1)(v) and (b)(5)(iii). 

In an April 4, 2023 letter to CMS, 

NCPDP requested that CMS adopt 

NCPDP F&B standard version 60 to 

replace NCPDP F&B standard version 

3.0.34 A detailed change log was 

attached to the letter and is available at 

the link in the footnote. As described in 

the letter, compared with NCPDP F&B 

standard version 3.0, NCPDP F&B 

standard version 60 includes all of the 

following major enhancements: 

• Normalization of all files (lists), 

which allows for smaller files and 

reusability. 

• All files have expiration dates. 

• Redesigned alternative and step 

medication files to reduce file sizes and 

to include support for reason for use 

(that is, diagnosis). 

• Step medication files support a 

more complex step medication program. 

• Updated coverage files to include 

support for electronic prior 

authorization and specialty drugs. 

• Updated copay files to allow a 

minimum and maximum copay range 

without a percent copay and to support 

deductibles and pharmacy networks. 

In its letter to CMS, NCPDP requested 

mandatory use of NCPDP F&B version 

60 24 months after the effective date of 

a final rule adopting the standard. 

NCPDP F&B standard version 60 is 

backwards compatible with NCPDP F&B 

standard version 3.0, permitting a 

transition period where both versions of 

the NCPDP F&B standard may be used 

simultaneously without the need for 

entities involved to utilize a translator 

program. 

Following an approach similar to 

those proposed in sections III.B.4. and 

III.B.5. of this proposed rule, CMS 

proposes at § 423.160(b)(3) that 

transmitting formulary and benefit 

information between prescribers and 

Medicare Part D sponsors must either 

utilize NCPDP F&B standard version 3.0 

or comply with a standard in 45 CFR 

170.205(u), where ONC proposes to 

adopt, at 45 CFR 170.205(u)(1), NCPDP 

F&B standard version 60 as described in 

section III.C.8.c. of this proposed rule. 

After January 1, 2027, entities 

transmitting formulary and benefit 

information would be required to 

comply with a standard in 45 CFR 

170.205(u) exclusively, if finalized as 

proposed. Since ONC did not previously 

adopt NCPDP F&B standard version 3.0, 

we are maintaining the incorporation by 

reference of that version in the Part D 

regulation at § 423.160(c)(1)(i) to permit 

a transition period where either NCPDP 

F&B standard version 3.0 or NCPDP F&B 

version 60 could be used until January 

1, 2027. 

We solicit comment on these 

proposals. 

7. Date for Required Use of NCPDP 

SCRIPT Standard Version 2023011, 

NCPDP RTPB Standard Version 13, and 

NCPDP F&B Standard Version 60 

CMS has received feedback on a 

number of practical considerations for 

determining a realistic timeframe to 

implement new or update existing 

electronic prescribing standards. We 

have been informed that organizations 

generally do not budget for new 

requirements until a final rule has been 

published establishing a particular new 

requirement and, therefore, the timing 

of when a final rule is finalized relative 

to budget approval cycles can determine 

if a requirement can be accounted for in 

the organization’s next annual budget. 

The health IT industry has indicated to 

CMS that it requires at least 2 years to 

design, develop, test, and certify 

software with trading partners; perform 

DEA audits for EPCS compliance; and 

roll out updated software to provider 

organizations and partners who then 

must train end users before a transition 

to a new or updated version of a 

standard is complete. This account is 

consistent with NCPDP’s requests for up 

to 24-month implementation timeframes 

for new standards.35 36 A commenter on 

the December 2022 proposed rule 

requested that CMS either permit 3 

years from a final rule before requiring 

use of a new or updated version of a 

standard, or use enforcement discretion 

if requiring use of a new or updated 

version of a standard less than 3 years 

from a final rule. CMS will generally 

aim to provide entities with at least 2 

years from when a final rule is finalized; 

however, we qualify that in some cases 

less time may be provided if determined 

to be necessary. 

CMS routinely receives feedback 

requesting that we do not require the 

use of new or updated electronic 

prescribing standards starting on 

January 1 due to end-of-year ‘‘code 

freezes,’’ which prohibit updates to 

internal systems and plan enrollment 

changes that contribute to a general high 

workload at the start of a new plan year. 

CMS reminds entities impacted by the 

proposed regulatory changes that, 

consistent with § 423.516, CMS is 

prohibited from imposing new, 

significant regulatory requirements on 

Part D sponsors midyear. If the 

approach proposed in this proposed 

rule to align CMS’s requirements for 

certain Part D electronic prescribing 

standards by cross-referencing standards 

adopted in ONC regulations is finalized, 

CMS and ONC will coordinate to 

establish appropriate timeframes for 

updating adopted standards and 

expiration dates for prior versions of 

adopted standards. CMS, working with 

ONC, will consider transition periods 

longer than 24 months following 

publication of a final rule to permit a 

sufficient transition period prior to 

January 1. Since a new, significant 

requirement must be effective January 1, 

a new or updated version of a standard 

could be required January 1 of the year 

following 24 months after a final rule is 

effective. For example, if a final rule 

containing a provision to update an 

electronic prescribing standard to a new 

version were effective May 30, 2024, 

then CMS would anticipate requiring 

the new version of the standard by 

January 1, 2027. This would allow for a 

31-month transition period during 

which either version of a required 

standard could be used. Part D sponsors 

would need to plan accordingly to 

completely transition to the updated 

version of the standard ahead of the 

January 1 date to meet their internal 

production calendars. Using the prior 

example, we would assume that to 

avoid implementing the updated 

version of a standard on January 1, 

2027, Part D sponsors would transition 

to the updated version of the standard 

by approximately May 30, 2026. 

ONC is proposing January 1, 2027, as 

the date NCPDP SCRIPT standard 

version 2023011 would be the required 

version of this standard, as a product of 

the proposed expiration for NCPDP 

SCRIPT standard version 2017071 and 

our proposed cross-reference, in 

§ 423.160(b)(1), to a standard in 45 CFR 

170.205(b). We are proposing the 

required use of NCPDP F&B standard 

version 60 and NCPDP RTPB standard 

version 13 by January 1, 2027, in the 


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text of § 423.160(b)(3) and (5), 

respectively, as previously discussed. 

We are also aware that Part D sponsors 

and the health IT industry are awaiting 

HHS’ final rule on the proposals to 

update the NCPDP Telecommunication 

standard from version D.0 to version F6 

(87 FR 67638), update the equivalent 

NCPDP Batch Standard version 15 (87 

FR 67639), and implement the NCPDP 

Batch Standard Pharmacy Subrogation 

version 10 (87 FR 67640) proposed in 

the November 2022 Administrative 

Simplification proposed rule. 

Taking all of these proposals into 

consideration, we ask interested parties 

to comment on the proposed January 1, 

2027, date for the required use of 

NCPDP SCRIPT standard version 

2023011, NCPDP RTPB standard version 

13, and NCPDP F&B standard version 

60. It is expressly outside the scope of 

this proposed rule, and we do not seek 

comment on, the compliance date for 

the proposals in HHS’ November 2022 

Administrative Simplification proposed 

rule; however, we ask for comments on 

the feasibility of updating multiple 

standards simultaneously. 

8. Standards for Eligibility Transactions 

We propose to revise the Part D 

requirements to indicate that eligibility 

transactions must comply with 45 CFR 

162.1202. The requirements for 

eligibility transactions currently 

codified at § 423.160(b)(3)(i) and (ii) 

name the Accredited Standards 

Committee X12N 270/271-Health Care 

Eligibility Benefit Inquiry and Response, 

Version 5010, April 2008, ASC X12N/ 

005010x279 and the NCPDP 

Telecommunication Standard 

Specification, Version D, Release 0 

(Version D.0), August 2007, and 

equivalent NCPDP Batch Standard 

Batch Implementation Guide, Version 1, 

Release 2 (Version 1.2), January 2006 

supporting Telecommunications 

Standard Implementation Guide, 

Version D, Release 0 (Version D.0), 

August 2007. We adopted these 

standards to align with those adopted at 

45 CFR 162.1202, pursuant to the final 

rule titled ‘‘Health Insurance Reform; 

Modifications to the Health Insurance 

Portability and Accountability Act 

(HIPAA) Electronic Transaction 

Standards,’’ which appeared in the 

January 16, 2009, Federal Register (74 

FR 3326). 

The November 2022 Administrative 

Simplification proposed rule proposes 

to update the HIPAA standards used for 

eligibility transactions (87 FR 67638). 

We therefore propose to update the Part 

D regulation by proposing, at 

§ 423.160(b)(2), that eligibility inquiries 

and responses between the Part D 

sponsor and prescribers and between 

the Part D sponsor and dispensers must 

comply with the applicable HIPAA 

regulation in 45 CFR 162.1202, as 

opposed to naming standards 

independently, which would ensure, 

should the HIPAA standards for 

eligibility transactions be updated as a 

result of HHS rulemaking or in the 

future, that the Part D regulation would 

be synchronized with the required 

HIPAA standards. We foresee no 

immediate impact of this proposed 

change since the HIPAA regulation at 45 

CFR 162.1202 currently identifies the 

same standards as those named in the 

Part D regulation at § 423.160(b)(3)(i) 

and (ii), but we believe establishing a 

cross-reference would help avoid 

potential future conflicts and mitigate 

potential compliance challenges for the 

healthcare industry and enforcement 

challenges for HHS. 

Thus, we propose to delete existing 

§ 423.160(b)(3)(i) and (ii) and modify 

§ 423.160(b)(2) (as renumbered per the 

technical proposals in section III.B.9. of 

this proposed rule) to require that 

eligibility transactions must comply 

with 45 CFR 162.1202. 

We solicit comment on these 

proposals. 

9. Technical Changes Throughout 

§ 423.160 

In the spirit of alignment with ONC’s 

approach to adopting standards, we 

reviewed § 423.160 in its entirety and 

identified areas where we can 

reorganize text throughout this section. 

We do not believe we should continue 

to list historical requirements that are 

no longer relevant and have resulted in 

repetitive content being added to the 

regulation. We propose removing 

reference to old effective dates (for 

example, ‘‘After January 1, 2009 . . .’’ at 

§ 423.160(a)(3)(ii)). Additionally, certain 

exemptions have long since expired. For 

example, at § 423.160(a)(3)(iv), entities 

transmitting prescriptions or 

prescription-related information where 

the prescriber is required by law to issue 

a prescription for a patient to a nonprescribing provider (such as a nursing 

facility) that in turn forwards the 

prescription to a dispenser have not 

been exempt from using the SCRIPT 

standard since November 1, 2014. 

We are proposing a correction at 

§ 423.160(a)(3)(iii), where regulation 

text refers to prescriptions and 

prescription-related information 

transmitted ‘‘internally when the sender 

and the beneficiary are part of the same 

legal entity.’’ The exemption currently 

at § 423.160(a)(3)(iii) was previously 

codified at § 423.160(a)(3)(ii) as 

‘‘Entities may use either HL7 messages 

or the NCPDP SCRIPT Standard to 

transmit prescriptions or prescriptionrelated information internally when the 

sender and the recipient are part of the 

same legal entity . . .’’ as finalized in 

the November 2005 final rule, which 

codified the foundation standards for 

Medicare Part D electronic prescription 

drug programs (70 FR 67594). Section 

423.160(a)(3)(ii) was redesignated as 

§ 423.160(a)(3)(iii) subsequent to 

changes made in the final rule titled 

‘‘Medicare Program; Revisions to 

Payment Policies Under the Physician 

Fee Schedule, and Other Part B Payment 

Policies for CY 2008; Revisions to the 

Payment Policies of Ambulance 

Services Under the Ambulance Fee 

Schedule for CY 2008; and the 

Amendment of the E-Prescribing 

Exemption for Computer Generated 

Facsimile Transmissions,’’ (hereinafter 

referred to as ‘‘the November 2007 final 

rule’’) which appeared in the November 

27, 2007 Federal Register (72 FR 

66222). There is no indication of intent 

in the November 2007 final rule to 

change the wording in 

§ 423.160(a)(3)(iii) when it was 

redesignated, nor can we find evidence 

of when this paragraph may have been 

altered in subsequent rules. Therefore, 

we believe the word ‘‘recipient’’ was 

inadvertently changed to ‘‘beneficiary’’ 

in the distant past and we are proposing 

to change this back to ‘‘recipient.’’ 

Section 423.160(a)(1) and (2) already 

indicate that the entities listed must 

comply with the applicable standards in 

§ 423.160(b); therefore, the language 

currently at § 423.160(b)(1), ‘‘Entities 

described in paragraph (a) of this 

section must comply with the following 

adopted standards for transactions 

under this section,’’ is redundant. We 

propose to remove it from the text of 

§ 423.160(b)(1). Moreover, 

§ 423.160(b)(1)(i) through (iv) and 

(b)(2)(i) through (iii) contain longoutdated requirements going back to the 

start of the electronic prescribing 

program in Medicare Part D. We 

propose to delete references to outdated 

requirements so that the regulation text 

will include only relevant and 

applicable requirements. Transition 

periods would no longer be specifically 

spelled out as starting at a particular 

date (historically, 6 months after the 

effective date of a final rule). Rather, the 

transition period would begin as of the 

effective date of a final rule effectuating 

a change from one version of a standard 

to a new version and would last until 

the prior version of the standard is 

expired, as proposed to be codified in 

ONC regulation, or until the date 

specified in Part D regulation. For 


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versions of standards adopted by ONC, 

CMS would consider the necessary 

transition period when working with 

ONC to establish the appropriate 

expiration date for prior versions of 

standards in rulemaking. This would 

align the Part D approach with the 

approach that ONC has used in its own 

regulations. 

As currently organized, separate 

sections for ‘‘Prescription’’ at 

§ 423.160(b)(2), ‘‘Medication history’’ at 

§ 423.160(b)(4), and ‘‘Electronic prior 

authorization’’ at § 423.160(b)(8) has 

resulted in multiple versions of the 

NCPDP SCRIPT standard, and relevant 

transactions, being repeated in these 

sections. Because § 423.160(a)(1) and (2) 

state that the entities listed must comply 

‘‘with the applicable standards in 

paragraph (b),’’ we believe that we can 

group the functions in paragraph (b) 

according to the standard used for those 

functions to avoid repetition. Therefore, 

we propose to combine ‘‘Prescriptions, 

electronic prior authorization, and 

medication history’’ at § 423.160(b)(1), 

which will require the use of the NCPDP 

SCRIPT standard version or versions as 

proposed via cross-reference to ONC 

regulations. We propose to delete 

§ 423.160(b)(4) and (8). The ePA 

transactions previously listed at 

§ 423.160(b)(8)(i)(A) through (D) are 

proposed at § 423.160(b)(1)(i)(V) 

through (Y). We are proposing to delete 

reference to versions of the NCPDP F&B 

standard, currently codified at 

§ 423.160(b)(5) introductory text and 

(b)(5)(i) and (ii), that are no longer 

applicable. The remaining paragraphs in 

§ 423.160(b) are renumbered such that 

§ 423.160(b)(2) refers to eligibility, 

§ 423.160(b)(3) refers to formulary and 

benefits, § 423.160(b)(4) refers to 

provider identifier, and § 423.160(b)(5) 

refers to real-time benefit tools. 

We are proposing to delete standards 

incorporated by reference at § 423.160(c) 

that are: no longer applicable (that is, 

were associated with outdated 

requirements that we have proposed to 

delete); are being proposed for 

incorporation by reference by ONC at 45 

CFR 170.299; or are already 

incorporated by reference by HHS at 45 

CFR 162.920. The standards 

incorporated by reference at 

§ 423.160(c)(1)(i), (ii), and (v) are no 

longer applicable, and we propose to 

delete them. The standards for 

eligibility transactions currently 

incorporated by reference at 

§ 423.160(c)(1)(iii) and (c)(2)(i) and (ii) 

have already been incorporated by 

reference by HHS at 45 CFR 162.920. 

We propose to delete these specified 

§ 423.160(c)(1) and (2) incorporations by 

reference in light of our proposals in 

section III.B.8. of this proposed rule to 

indicate that entities must comply with 

45 CFR 162.1202 for eligibility 

transactions. In section III.B.11. of this 

proposed rule, we discuss how we 

propose to renumber the applicable 

standards currently incorporated by 

reference and where we propose to 

incorporate by reference the proposed 

new versions of standards as discussed 

in sections III.B.4., III.B.5., and III.B.6. of 

this proposed rule. 

We believe these changes improve the 

overall readability of the section. With 

the exception of proposed changes 

described in sections III.B.4., III.B.5., 

III.B.6., and III.B.8., we do not intend for 

technical changes to alter current 

requirements. 

We solicit comment on these 

proposals. 

10. Summary of Standards for Electronic 

Prescribing Proposals 

Sections III.B.4. though III.B.9. of this 

proposed rule include the following 

proposals: 

• Requiring, via cross-reference to a 

standard in 45 CFR 170.205(b), use of 

NCPDP SCRIPT standard version 

2023011, which ONC proposes for 

adoption at 45 CFR 170.205(b)(2), and 

retiring use of NCPDP SCRIPT standard 

version 2017071, via the same proposed 

cross-reference, for communication of a 

prescription or prescription-related 

information supported by Part D 

sponsors. This proposal includes a 

transition period beginning on the 

effective date of the final rule when 

either version of the NCPDP SCRIPT 

standard may be used. The transition 

period would end on January 1, 2027, 

which is the date that ONC has 

proposed that NCPDP SCRIPT standard 

version 2017071 would expire for the 

purposes of HHS use, as described in 

section III.C.8.a. of this proposed rule. If 

finalized as proposed, starting January 

1, 2027, NCPDP SCRIPT standard 

version 2023011 would be the only 

version of the NCPDP SCRIPT standard 

available for HHS use and for purposes 

of the Medicare Part D electronic 

prescribing program; 

• Requiring, beginning January 1, 

2027, prescriber RTBTs implemented by 

Part D sponsors to comply with a 

standard in 45 CFR 170.205(c), where 

ONC proposes to adopt NCPDP RTPB 

standard version 13; 

• Requiring transmission of formulary 

and benefit information between 

prescribers and Medicare Part D 

sponsors to comply with a standard in 

45 CFR 170.205(u), where ONC 

proposes to adopt NCPDP F&B standard 

version 60, and retiring use of NCPDP 

F&B version 3.0 for transmitting 

formulary and benefit information 

between prescribers and Part D 

sponsors. This proposal includes a 

transition period beginning on the 

effective date of the final rule and 

ending January 1, 2027, where entities 

would be permitted to use either NCPDP 

F&B version 3.0 (currently named in 

regulation at § 423.160(b)(5)(iii) and 

proposed to be named at § 423.160(b)(3) 

consistent with the proposed technical 

changes in this rule) or NCPDP F&B 

standard version 60, proposed for 

adoption at 45 CFR 170.205(u). If 

finalized as proposed, starting January 

1, 2027, only a version of the standard 

adopted for HHS use at 45 CFR 

170.205(u) would be permitted for use 

in Part D electronic prescription drug 

program, which would be NCPDP F&B 

standard version 60 if the proposal in 

section III.C.8.c. of this rule is finalized 

as proposed; 

• Cross-referencing standards 

adopted for eligibility transactions in 

HIPAA regulations at 45 CFR 162.1202 

for requirements related to eligibility 

inquiries; and 

• Making multiple technical changes 

to the regulation text throughout 

§ 423.160 for clarity by removing 

requirements and incorporations by 

reference that are no longer applicable 

or redundant, re-organizing existing 

requirements, and correcting a technical 

error. CMS invites comment on all 

aspects of these proposals, including the 

proposed date of January 1, 2027, for 

required use of NCPDP SCRIPT standard 

version 2023011, NCPDP RTPB standard 

version 13, and NCPDP F&B standard 

version 60. 

11. Incorporation by Reference and 

Availability of Incorporation by 

Reference Materials 

The Office of the Federal Register 

(OFR) has regulations concerning 

incorporation by reference (IBR) at 1 

CFR part 51. If the regulations reference 

a standard, either in general or by name, 

in another section, IBR approval is 

required. In order for CMS to require 

use of standards in § 423.160 by cross 

citation to 45 CFR 170.205(b), those 

standards must be published in full in 

the Federal Register or CFR. Therefore, 

CMS must incorporate by reference the 

materials referenced in the proposals in 

sections III.B.4., III.B.5., and III.B.6. of 

this proposed rule which cross cite 

standards in ONC regulations. 

For a proposed rule, agencies must 

discuss in the preamble to the proposed 

rule ways that the materials the agency 

proposes to incorporate by reference are 

reasonably available to interested 

parties or how the agency worked to 

make the materials reasonably available. 


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Additionally, the preamble to the 

proposed rule must summarize the 

materials. See also section III.C.10. of 

this proposed rule for summaries of the 

standards proposed for incorporation by 

reference by ONC. 

Consistent with those requirements 

CMS has established procedures to 

ensure that interested parties can review 

and inspect relevant materials. The 

proposals related to the Part D 

electronic prescribing standards have 

relied on the following materials which 

we propose to incorporate by reference 

where specified: 

• NCPDP SCRIPT Standard, 

Implementation Guide Version 2017071, 

approved July 28, 2017, which is 

currently incorporated by reference at 

§ 423.160(c)(1)(vii). We propose to 

renumber this incorporation by 

reference as § 423.160(c)(2); 

• NCPDP SCRIPT Standard, 

Implementation Guide Version 2023011, 

published April 2023, (Approval Date 

for American National Standards 

Institute [ANSI]: January 17, 2023). We 

propose to incorporate by reference at 

§ 423.160(c)(3); 

• NCPDP Real-Time Prescription 

Benefit Standard, Implementation Guide 

Version 13, published July 2023 

(Approval Date for ANSI: May 19, 2022). 

We propose to incorporate by reference 

at § 423.160(c); 

• NCPDP Formulary and Benefits 

Standard, Implementation Guide, 

Version 3, Release 0 (Version 3.0), 

published April 2012, which is 

currently incorporated by reference at 

§ 423.160(c)(1)(vi). We propose to 

renumber this incorporation by 

reference at § 423.160(c)(1); and 

• NCPDP Formulary and Benefit 

Standard, Implementation Guide 

Version 60, published April 2023 

(Approval Date for ANSI: April 12, 

2023). We propose to incorporate by 

reference at § 423.160(c)(5). 

NCPDP members may access these 

materials through the member portal at 

www.ncpdp.org. Non-NCPDP members 

may obtain these materials for 

information purposes by contacting the 

CMS at 7500 Security Boulevard, 

Baltimore, Maryland 21244 by calling 

(410) 786–4132 or (877) 267–2323 (toll 

free), or emailing PartDPolicy@

cms.hhs.gov. 

C. Adoption of Health IT Standards and 

Incorporation by Reference (45 CFR 

170.205 and 170.299) 

1. Overview 

In this section, ONC proposes to 

adopt standards for electronic 

prescribing and related activities on 

behalf of HHS under the authority in 

section 3004 of the Public Health 

Service Act (42 U.S.C. 300jj–14). ONC is 

proposing these standards for adoption 

by HHS as part of a nationwide health 

information technology infrastructure 

that supports reducing burden and 

health care costs and improving patient 

care. ONC proposes to adopt these 

standards on behalf of HHS in one 

location within the Code of Federal 

Regulations for HHS use, including by 

the Part D Program as proposed in 

section III.B. of this proposed rule. 

These proposals reflect a unified 

approach across the Department to 

adopt standards for electronic 

prescribing (e-prescribing) activities that 

have previously been adopted 

separately by CMS and ONC under 

independent authorities. This approach 

is intended to increase alignment across 

HHS and reduce regulatory burden for 

interested parties subject to program 

requirements that incorporate these 

standards. 

In the Medicare Program; Contract 

Year 2024 Policy and Technical 

Changes to the Medicare Advantage 

Program, Medicare Prescription Drug 

Benefit Program, Medicare Cost Plan 

Program, Medicare Parts A, B, C, and D 

Overpayment Provisions of the 

Affordable Care Act and Programs of 

All-Inclusive Care for the Elderly; 

Health Information Technology 

Standards and Implementation 

Specifications’’ (December 2022 

proposed rule), which appeared in the 

Federal Register December 27, 2022 (87 

FR 79552 through 79557), we proposed 

the adoption of NCPDP SCRIPT 

standard version 2022011 and NCPDP 

Real-Time Prescription Benefit standard 

version 13, as well as related proposals. 

We considered whether to issue a final 

rule based on that proposed rule, but 

considering the concerns raised by the 

commenters regarding which version of 

the standards to use, we have opted not 

to do so. Specifically, some commenters 

recommended adoption of NCPDP 

SCRIPT standard version 2023011, 

rather than the proposed NCPDP 

SCRIPT standard version 2022011. 

Other commenters recommended 

adoption of NCPDP RTPB standard 

version 13, rather than the proposed 

NCPDP RTPB standard version 12. See 

additional discussion in section III.B.5. 

of this rule. Therefore, we are 

withdrawing the proposals in sections 

III.T. and III.U. of the December 2022 

proposed rule (87 FR 79552 through 

79557). We are issuing a series of new 

proposals in this proposed rule that take 

into consideration the feedback we 

received from commenters on the 

December 2022 proposed rule and 

further build on these proposals. 

Additionally, summaries of the 

standards we propose to adopt and 

subsequently incorporate by reference 

in the Code of Federal Regulations can 

be found below in section III.C.10. of 

this rule. 

2. Statutory Authority 

The Health Information Technology 

for Economic and Clinical Health Act 

(HITECH Act), Title XIII of Division A 

and Title IV of Division B of the 

American Recovery and Reinvestment 

Act of 2009 (the Recovery Act) (Pub. L. 

111–5), was enacted on February 17, 

2009. The HITECH Act amended the 

Public Health Service Act (PHSA) and 

created ‘‘Title XXX—Health Information 

Technology and Quality’’ (Title XXX) to 

improve health care quality, safety, and 

efficiency through the promotion of 

health IT and exchange of electronic 

health information (EHI). Subsequently, 

Title IV of the 21st Century Cures Act 

(Pub. L. 114–255) (Cures Act) amended 

portions of the HITECH Act by 

modifying or adding certain provisions 

to the PHSA relating to health IT. 

3. Adoption of Standards and 

Implementation Specifications 

Section 3001 of the PHSA directs the 

National Coordinator for Health 

Information Technology (National 

Coordinator) to perform duties in a 

manner consistent with the 

development of a nationwide health 

information technology infrastructure 

that allows for the electronic use and 

exchange of information. Section 

3001(b) of the PHSA establishes a series 

of core goals for development of a 

nationwide health information 

technology infrastructure that— 

• Ensures that each patient’s health 

information is secure and protected, in 

accordance with applicable law; 

• Improves health care quality, 

reduces medical errors, reduces health 

disparities, and advances the delivery of 

patient-centered medical care; 

• Reduces health care costs resulting 

from inefficiency, medical errors, 

inappropriate care, duplicative care, and 

incomplete information; 

• Provides appropriate information to 

help guide medical decisions at the time 

and place of care; 

• Ensures the inclusion of meaningful 

public input in such development of 

such infrastructure; 

• Improves the coordination of care 

and information among hospitals, 

laboratories, physician offices, and other 

entities through an effective 

infrastructure for the secure and 

authorized exchange of health care 

information; 


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37HITAC Policy Framework Recommendations, 

February 21, 2018: https://www.healthit.gov/sites/ 

default/files/page/2019-07/2018-02-21_HITAC_

Policy-Framework_FINAL_508-signed.pdf. 

38Health Information Technology Advisory 

Committee (HITAC) Annual Report for Fiscal Year 

2019 published March 2, 2020: https://

www.healthit.gov/sites/default/files/page/2020-03/ 

HITAC%20Annual%20Report%20for%20FY19_

508.pdf. 

39HITAC recommendations on priority target 

areas, October 16, 2019: https://www.healthit.gov/ 

sites/default/files/page/2019-12/2019-10-16_ISP_

TF_Final_Report_signed_508.pdf. 

• Improves public health activities 

and facilitates the early identification 

and rapid response to public health 

threats and emergencies, including 

bioterror events and infectious disease 

outbreaks; 

• Facilitates health and clinical 

research and health care quality; 

• Promotes early detection, 

prevention, and management of chronic 

diseases; 

• Promotes a more effective 

marketplace, greater competition, 

greater systems analysis, increased 

consumer choice, and improved 

outcomes in health care services; and 

• Improves efforts to reduce health 

disparities. 

Section 3004 of the PHSA identifies a 

process for the adoption of health IT 

standards, implementation 

specifications, and certification criteria, 

and authorizes the Secretary to adopt 

such standards, implementation 

specifications, and certification criteria. 

As specified in section 3004(a)(1) of the 

PHSA, the Secretary is required, in 

consultation with representatives of 

other relevant Federal agencies, to 

jointly review standards, 

implementation specifications, and 

certification criteria endorsed by the 

National Coordinator under section 

3001(c) of the PHSA and subsequently 

determine whether to propose the 

adoption of any grouping of such 

standards, implementation 

specifications, or certification criteria. 

The Secretary is required to publish all 

determinations in the Federal Register. 

Section 3004(b)(3) of the PHSA, 

which is titled ‘‘Subsequent Standards 

Activity,’’ provides that the Secretary 

shall adopt additional standards, 

implementation specifications, and 

certification criteria as necessary and 

consistent with the schedule published 

by the Health IT Advisory Committee 

(HITAC). As noted in the final rule, 

‘‘2015 Edition Health Information 

Technology (Health IT) Certification 

Criteria, 2015 Edition Base Electronic 

Health Record (EHR) Definition, and 

ONC Health IT Certification Program 

Modifications,’’ which appeared in the 

October 16, 2015 Federal Register, we 

consider this provision in the broader 

context of the HITECH Act and the 

Cures Act to grant the Secretary the 

authority and discretion to adopt 

standards, implementation 

specifications, and certification criteria 

that have been recommended by the 

HITAC and endorsed by the National 

Coordinator, as well as other 

appropriate and necessary health IT 

standards, implementation 

specifications, and certification criteria 

(80 FR 62606). 

Under the authority outlined in 

section 3004(b)(3) of the PHSA, the 

Secretary may adopt standards, 

implementation specifications, and 

certification criteria as necessary even if 

those standards have not been 

recommended and endorsed through the 

process established for the HITAC under 

section 3002(b)(2) and (3) of the PHSA. 

Moreover, while HHS has traditionally 

adopted standards and implementation 

specifications at the same time as 

adopting certification criteria that 

reference those standards, the 

Secretary’s authority under section 

3004(b)(3) of the PHSA is not limited to 

adopting standards or implementation 

specifications at the same time 

certification criteria are adopted. 

Finally, the Cures Act amended the 

PHSA by adding section 3004(c), which 

specifies that in adopting and 

implementing standards under section 

3004, the Secretary shall give deference 

to standards published by standards 

development organizations and 

voluntary consensus-based standards 

bodies. 

4. Alignment With Federal Advisory 

Committee Activities 

The HITECH Act established two 

Federal advisory committees, the HIT 

Policy Committee (HITPC) and the HIT 

Standards Committee (HITSC). Each 

was responsible for advising the 

National Coordinator on different 

aspects of health IT policy, standards, 

implementation specifications, and 

certification criteria. 

Section 4003(e) of the Cures Act 

amended section 3002 of the PHSA and 

replaced the HITPC and HITSC with one 

committee, the HITAC. After that 

change, section 3002(a) of the PHSA 

establishes that the HITAC advises and 

recommends to the National 

Coordinator standards, implementation 

specifications, and certification criteria 

relating to the implementation of a 

health IT infrastructure, nationally and 

locally, that advances the electronic 

access, exchange, and use of health 

information. The Cures Act specifically 

directed the HITAC to advise on two 

areas: (1) A policy framework to 

advance an interoperable health 

information technology infrastructure 

(section 3002(b)(1) of the PHSA); and (2) 

priority target areas for standards, 

implementation specifications, and 

certification criteria (section 3002(b)(2) 

of the PHSA). 

For the policy framework, as 

described in section 3002(b)(1)(A) of the 

PHSA, the Cures Act tasked the HITAC 

with providing recommendations to the 

National Coordinator on a policy 

framework for adoption by the Secretary 

consistent with the Federal Health IT 

Strategic Plan under section 3001(c)(3) 

of the PHSA. In February of 2018, the 

HITAC made recommendations to the 

National Coordinator for the initial 

policy framework 37 and subsequently 

published a schedule in the Federal 

Register and an annual report on the 

work of the HITAC and ONC to 

implement and evolve that 

framework.38 For the priority target 

areas for standards, implementation 

specifications, and certification criteria, 

section 3002(b)(2)(A) of the PHSA 

identified that in general, the HITAC 

would recommend to the National 

Coordinator, for purposes of adoption 

under section 3004 of the PHSA, 

standards, implementation 

specifications, and certification criteria 

and an order of priority for the 

development, harmonization, and 

recognition of such standards, 

specifications, and certification criteria. 

In October of 2019, the HITAC finalized 

recommendations on priority target 

areas for standards, implementation 

specifications, and certification 

criteria.39

5. Aligned Approach to Standards 

Adoption 

Historically, the ONC Health IT 

Certification Program and the Part D 

Program have maintained 

complementary policies of aligning 

health IT certification criteria and 

associated standards related to 

electronic prescribing, medication 

history, and electronic prior 

authorization for prescriptions. While 

CMS and ONC have worked closely 

together to ensure consistent adoption 

of standards through regulatory actions, 

we recognize that the practice of 

different HHS components conducting 

parallel adoption of the same standards 

may result in additional regulatory 

burden and confusion for interested 

parties. For instance, due to 

discrepancies between regulatory 

timelines, adoption of the NCPDP 

SCRIPT standard version 2017071 in 

different rules (respectively, 21st 

Century Cures Act: Interoperability, 

Information Blocking, and the ONC 


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40See the archived version of the Certification 

Companion Guide for the ‘‘electronic prescribing’’ 

certification criterion in 45 CFR 170.315(b)(3): 

https://www.healthit.gov/sites/default/files/page/ 

2020-12/b3_ccg.pdf. 

41See https://www.healthit.gov/isa. 

42See https://www.healthit.gov/isa/section/ 

pharmacyinteroperability. 

43See https://www.healthit.gov/isa/section/ 

administrative-transactions-non-claims. 

44See https://standards.ncpdp.org/Standards/ 

media/pdf/Correspondence/2023/20230213_To_

CMS_CMS_4201_P_NPRM.pdf. 

Health IT Certification Program final 

rule (85 FR 25642) and the Medicare 

Program; Contract Year 2019 Policy and 

Technical Changes to the Medicare 

Advantage, Medicare Cost Plan, 

Medicare Fee-for-Service, the Medicare 

Prescription Drug Benefit Programs, and 

the PACE Program final rule which 

appeared in the April 16, 2018 Federal 

Register (83 FR 16440)) led to a period 

where ONC had to exercise special 

enforcement discretion in the ONC 

Health IT Certification Program.40 Given 

these concerns, ONC and CMS 

proposals in the December 2022 

proposed rule (87 FR 79552 through 

79557) reflected a new approach to 

alignment of standards under which 

ONC proposed to adopt and incorporate 

by reference, on behalf of HHS, the 

NCPDP SCRIPT standard version 

2022011 and the NCPDP RTPB standard 

version 12 in a single Code of Federal 

Regulations location at 45 CFR 170.205, 

where CMS proposed to cross-reference 

these standards for requirements in the 

Part D program. 

For additional discussion of this 

approach see the December 2022 

proposed rule (87 FR 79552 through 

79557) and CMS’s discussion in 

sections III.B.3 through III.B.7. of this 

proposed rule. We note that the 

proposals in this rule continue to reflect 

an aligned approach with CMS to 

adoption of health IT standards for eprescribing and related purposes. We 

believe our proposed adoption of these 

standards in a single CFR location for 

HHS use will help to address concerns 

around alignment across HHS programs. 

6. Regulatory History 

For a summary of past standards 

adoption activities under section 3004 

of the PHSA intended to ensure 

alignment for electronic prescribing and 

related activities across the ONC Health 

IT Certification Program and the Part D 

Program, we refer readers to the 

December 2022 proposed rule (87 FR 

79553). In this proposed rule, we also 

propose to adopt the NCPDP Formulary 

and Benefit (F&B) standard version 60, 

which was not previously discussed in 

the December 2022 proposed rule (87 

FR 79553). For a summary of previous 

notice-and-comment rulemaking related 

to formulary and benefit management 

capabilities in the ONC Health IT 

Certification Program, we refer readers 

to the ‘‘Health Data, Technology, and 

Interoperability: Certification Program 

Updates, Algorithm Transparency, and 

Information Sharing’’ proposed rule 

(HTI–1 Proposed Rule) (88 FR 23853 

through 23854). 

7. Interoperability Standards Advisory 

ONC’s Interoperability Standards 

Advisory (ISA) supports the 

identification, assessment, and public 

awareness of interoperability standards 

and implementation specifications that 

can be used by the health care industry 

to address specific interoperability 

needs.41 The ISA is updated on an 

annual basis based on recommendations 

received from public comments and 

subject matter expert feedback. This 

public comment process reflects 

ongoing dialogue, debate, and 

consensus among industry interested 

parties when more than one standard or 

implementation specification could be 

used to address a specific 

interoperability need. 

ONC currently identifies the 

standards proposed for adoption in this 

section within the ISA as available 

standards for a variety of potential use 

cases. The NCPDP SCRIPT standard 

version 2023011, the NCPDP Real-Time 

Prescription Benefit standard version 

13, and the NCPDP Formulary and 

Benefits standard version 60 are 

currently identified in sections of the 

ISA including the ‘‘Pharmacy 

Interoperability’’ 42 and ‘‘Administrative 

Transactions—Non-Claims.’’ 43 We 

encourage interested parties to review 

the ISA to better understand key 

applications for the implementation 

specifications proposed for adoption in 

this proposed rule. 

8. Proposal To Adopt Standards for Use 

by HHS 

Consistent with section 3004(b)(3) of 

the PHSA and the efforts, as previously 

described, to evaluate and identify 

standards for adoption, we propose to 

adopt the following implementation 

specifications in 45 CFR 170.205(b)(2), 

(c)(1), and (u)(1), on behalf of the 

Secretary, to support the continued 

development of a nationwide health 

information technology infrastructure as 

described under section 3001(b) of the 

PHSA, and to support Federal alignment 

of standards for interoperability and 

health information exchange. 

Specifically, we propose to adopt the 

following standards: 

• NCPDP SCRIPT Standard, 

Implementation Guide, Version 

2023011. 

• NCPDP Real-Time Prescription 

Benefit (RTPB) Standard, 

Implementation Guide, Version 13. 

• NCPDP Formulary and Benefits 

(F&B) Standard, Implementation Guide, 

Version 60. 

In addition to comments on the 

individual proposals below, we invite 

comments on whether there are 

alternative versions, including any 

newer versions, of these or other 

standards that we should consider for 

adoption for HHS use. In particular, we 

would be interested in, and would 

consider for adoption in a final rule, any 

newer version of the proposed 

standard(s) that may correct any 

unidentified errors or clarify 

ambiguities that would support 

successful implementation of the 

standard(s) and the interoperability of 

health IT. 

a. NCPDP SCRIPT Standard Version 

2023011 (45 CFR 170.205(b)) 

ONC has previously adopted three 

versions of the NCPDP SCRIPT standard 

in 45 CFR 170.205. Most recently, we 

adopted NCPDP SCRIPT standard 

version 2017071 in the ONC 21st 

Century Cures Act final rule to facilitate 

the transfer of prescription data among 

pharmacies, prescribers, and payers (85 

FR 25678). 

The updated NCPDP SCRIPT standard 

version 2023011 includes important 

enhancements relative to NCPDP 

SCRIPT standard version 2017071. 

Enhancements have been added to 

support electronic prior authorization 

functions as well as electronic transfer 

of prescriptions between pharmacies. 

NCPDP SCRIPT standard version 

2023011 also includes functionality that 

supports a 3-way transaction among 

prescriber, facility, and pharmacy, 

which will enable electronic prescribing 

of controlled substances in the longterm care (LTC) setting.44

We propose to adopt NCPDP SCRIPT 

standard version 2023011 in 45 CFR 

170.205(b)(2), replacing NCPDP SCRIPT 

standard version 10.6 which is currently 

in 170.205(b)(2). We propose to 

incorporate NCPDP SCRIPT standard 

version 2023011 by reference in 45 CFR 

170.299. Regarding NCPDP SCRIPT 

standard version 2017071, we propose 

to revise the regulatory text in 45 CFR 

170.205(b)(1) to specify that adoption of 

this standard will expire on January 1, 

2027. If these proposals are finalized, 

this would mean that both the 2017071 

and 2023011 versions of the NCPDP 

SCRIPT standard would be available for 


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45See https://standards.ncpdp.org/Access-toStandards.aspx. 

46See https://standards.ncpdp.org/Access-toStandards.aspx. 

HHS use from the effective date of a 

final rule until January 1, 2027. On and 

after January 1, 2027, only the 2023011 

version of the NCPDP SCRIPT standard 

would be available for HHS use, for 

instance, where use of a standard in 45 

CFR 170.205(b) is required. We refer 

readers to section III.B.4. of this 

proposed rule, where CMS discusses its 

proposal at § 423.160(b)(1) to require 

use of a standard in 45 CFR 170.205(b) 

for communication of a prescription or 

prescription-related information to 

fulfill the requirements for 

prescriptions, electronic prior 

authorization, and medication history. 

We request comment on these 

proposals. 

b. NCPDP Real-Time Prescription 

Benefit (RTPB) Standard Version 13 (45 

CFR 170.205(c)) 

The NCPDP Real-Time Prescription 

Benefit standard version 13 enables the 

exchange of coverage status and 

estimated patient financial 

responsibility for a submitted product 

and pharmacy, and identifies coverage 

restrictions and alternatives when they 

exist. See section III.B.5. of this 

proposed rule for a description of RealTime Prescription Benefit standard 

functionality and enhancements of 

NCPDP Real-Time Prescription Benefit 

standard version 13 relative to NCPDP 

Real-Time Prescription Benefit standard 

version 12. 

Our proposal to adopt this standard 

supports the requirements of Division 

CC, Title I, Subtitle B, section 119 of the 

Consolidated Appropriations Act, 2021 

(CAA), Public Law 116–260, which 

required sponsors of Medicare 

prescription drug plans to implement a 

real-time benefit tool that meets 

technical standards named by the 

Secretary, in consultation with ONC. In 

addition, section 119(b) of the CAA 

amended the definition of a ‘‘qualified 

electronic health record’’ in section 

3000(13) of the PHSA to specify that a 

‘‘qualified electronic health record’’ 

must include or be capable of including 

a real-time benefit tool. ONC intends to 

address this provision in future 

rulemaking for the ONC Health IT 

Certification Program and will ensure 

alignment with the proposed NCPDP 

Real-Time Prescription Benefit standard 

version 13, if finalized, and related 

proposals in the Part D program where 

appropriate. 

We also note that the HITAC has 

previously addressed real-time 

prescription benefit standards, 

consistent with its statutory role to 

recommend standards. In 2019, the 

HITAC accepted the recommendations 

included in the 2018 report of the 

Interoperability Priorities Task Force, 

including recommendations to continue 

to monitor standards then being 

developed for real-time prescription 

benefit transactions, and, when the 

standards are sufficiently validated, to 

require EHR vendors to provide 

functionality that integrates real time 

patient-specific prescription benefit 

checking into the prescribing 

workflow.9 In early 2020, the National 

Committee on Vital and Health 

Statistics (NCVHS) and HITAC 

convened another task force, the 

Intersection of Clinical and 

Administrative Data (ICAD) Task Force, 

which was charged with convening 

industry experts and producing 

recommendations related to electronic 

prior authorizations. The task force 

report was presented to HITAC in 

November 2020 10 and discussed the 

NCPDP Real-Time Prescription Benefit 

standard as an important tool for 

addressing administrative transactions 

around prescribing. 

We are proposing in 45 CFR 

170.205(c) to add a new section heading 

‘‘Real-Time Prescription Benefit.’’ We 

are also proposing to adopt the NCPDP 

Real-Time Prescription Benefit standard 

version 13 45 in 45 CFR 170.205(c)(1) 

and to incorporate this standard by 

reference in 45 CFR 170.299. We refer 

readers to section III.B.5. of this rule, 

where CMS proposes at § 423.160(b)(5) 

to require Part D sponsors’ RTBTs to 

comply with a standard in 45 CFR 

170.205(c) by January 1, 2027, to fulfill 

the requirements for real-time benefit 

tools. As previously noted, ONC will 

consider proposals to require use of this 

standard to support real-time benefit 

tool functionality in the ONC Health IT 

Certification Program, consistent with 

section 119 of the CAA, in future 

rulemaking. 

We request comment on these 

proposals. 

c. NCPDP Formulary and Benefit (F&B) 

Standard Version 60 (45 CFR 

170.205(u)) 

The NCPDP Formulary and Benefit 

(F&B) standard version 60 46 provides a 

uniform means for prescription drug 

plan sponsors to communicate planlevel formulary and benefit information 

to prescribers through electronic 

prescribing/EHR systems. The NCPDP 

F&B standard transmits, on a batch 

basis, data on the formulary status of 

drugs, preferred alternatives, coverage 

restrictions (that is., utilization 

management requirements), and cost 

sharing consistent with the benefit 

design for example, cost sharing for 

drugs on a particular tier). The NCPDP 

F&B standard serves as a foundation for 

other electronic prescribing transactions 

including ePA, real-time benefit check, 

and specialty medication eligibility 

when used in conjunction with other 

standards. 

We propose to add a new paragraph 

heading at 45 CFR 170.205(u), 

‘‘Formulary and benefit.’’ We propose to 

adopt the NCPDP Formulary and Benefit 

standard version 60 at 45 CFR 

170.205(u)(1) and to incorporate this 

standard by reference in 45 CFR 

170.299. We refer readers to section 

III.B.6. of this proposed rule, where 

CMS proposes at § 423.160(b)(3) to 

require, by January 1, 2027, use of a 

standard in 45 CFR 170.205(u) by Part 

D plan sponsors to fulfill the 

requirements for exchange of formulary 

and benefit information with 

prescribers. 

9. ONC Health IT Certification Program 

We are not proposing new or revised 

certification criteria based on the 

proposed adoption of standards within 

this rulemaking. We note that section 

119 of the CAA does not require ONC 

to adopt certification criteria for realtime prescription benefit capabilities at 

the same time as a standard is adopted 

by HHS. We are therefore proposing to 

adopt the standard for HHS use and, as 

previously discussed, ONC would 

address new or revised certification 

criteria referencing the standard, if 

finalized, in separate rulemaking. ONC 

recently published a Request for 

Information in the HTI–1 Proposed Rule 

seeking information related to a realtime prescription benefit criterion (88 

FR 23853 through 23854). ONC will 

continue to collaborate with CMS to 

ensure that any future proposals in the 

ONC Health IT Certification Program 

continue to advance alignment with 

program requirements under the Part D 

Program. 

We believe the approach reflected in 

the standards proposals in this proposed 

rule will support Federal alignment and 

coordination of Federal activities with 

adopted standards and implementation 

specifications for a wide range of 

systems, use cases, and data types 

within the broad scope of health 

information exchange. Historically, 

State, Federal, and local partners have 

leveraged the standards adopted by 

ONC on behalf of HHS to inform 

program requirements, technical 

requirements for grants and funding 

opportunities, and systems 

implementation for health information 


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exchange. We believe the adoption of 

these standards will support HHS 

partners in setting technical 

requirements and advancing the use of 

innovative health IT solutions for 

electronic prescribing and related 

activities. 

10. Incorporation by Reference (45 CFR 

170.299) 

The Office of the Federal Register has 

established requirements for materials 

(for example, standards and 

implementation specifications) that 

agencies propose to incorporate by 

reference in the Code of Federal 

Regulations (79 FR 66267; 1 CFR 

51.5(a)). Specifically, 1 CFR 51.5(a) 

requires agencies to discuss, in the 

preamble of a proposed rule, the ways 

that the materials it proposes to 

incorporate by reference are reasonably 

available to interested parties or how it 

worked to make those materials 

reasonably available to interested 

parties; and summarize, in the preamble 

of the proposed rule, the material it 

proposes to incorporate by reference. 

To make the materials we intend to 

incorporate by reference reasonably 

available, we provide a uniform 

resource locator (URL) for the standards 

and implementation specifications. In 

many cases, these standards and 

implementation specifications are 

directly accessible through the URLs 

provided. In instances where they are 

not directly available, we note the steps 

and requirements necessary to gain 

access to the standard or 

implementation specification. In most of 

these instances, access to the standard 

or implementation specification can be 

gained through no-cost (monetary) 

participation, subscription, or 

membership with the applicable 

standards developing organization 

(SDO) or custodial organization. In 

certain instances, where noted, access 

requires a fee or paid membership. As 

an alternative, a copy of the standards 

may be viewed for free at the U.S. 

Department of Health and Human 

Services, Office of the National 

Coordinator for Health Information 

Technology, 330 C Street SW, 

Washington, DC 20201. Please call (202) 

690–7171 in advance to arrange 

inspection. 

The National Technology Transfer 

and Advancement Act (NTTAA) of 1995 

(15 U.S.C. 3701 et seq.) and the Office 

of Management and Budget (OMB) 

Circular A–119 require the use of, 

wherever practical, technical standards 

that are developed or adopted by 

voluntary consensus standards bodies to 

carry out policy objectives or activities, 

with certain exceptions. The NTTAA 

and OMB Circular A–119 provide 

exceptions to selecting only standards 

developed or adopted by voluntary 

consensus standards bodies, namely 

when doing so would be inconsistent 

with applicable law or otherwise 

impractical. We have followed the 

NTTAA and OMB Circular A–119 in 

proposing standards and 

implementation specifications for 

adoption, and note that the technical 

standards proposed for adoption in 45 

CFR 170.205 in this proposed rule were 

developed by NCPDP, which is an 

ANSI-accredited, not-for-profit 

membership organization using a 

consensus-based process for standards 

development. 

As required by 1 CFR 51.5(a), we 

provide summaries of the standards we 

propose to adopt and subsequently 

incorporate by reference in the Code of 

Federal Regulations. We also provide 

relevant information about these 

standards and implementation 

specifications in the preamble where 

these standards are proposed for 

adoption. We propose to revise 

§ 170.299(k) with the following updated 

standards: 

• National Council for Prescription 

Drug Programs (NCPDP) SCRIPT 

Standard, Implementation Guide, 

Version 2023011, April 2023 (Approval 

Date for ANSI: January 17, 2023) 

URL: https://standards.ncpdp.org/ 

Access-to-Standards.aspx. 

Access requires registration, a 

membership fee, a user account, and a 

license agreement to obtain a copy of 

the standard. 

Summary: SCRIPT is a standard 

created to facilitate the transfer of 

prescription data between pharmacies, 

prescribers, and payers. The current 

standard supports transactions 

regarding new prescriptions, 

prescription changes, renewal requests, 

prescription fill status notification, and 

prescription cancellation. 

Enhancements have been added for drug 

utilization review/use (DUR/DUE) alerts 

and formulary information as well as 

transactions to relay medication history 

and for a facility to notify a pharmacy 

of resident information. Enhancements 

have been added to support electronic 

prior authorization functions as well as 

electronic transfer of prescriptions 

between pharmacies. 

• National Council for Prescription 

Drug Programs (NCPDP) Real-Time 

Prescription Benefit Standard, 

Implementation Guide, Version 13, July 

2023 (Approval Date for ANSI: May 19, 

2022) 

URL: https://standards.ncpdp.org/ 

Access-to-Standards.aspx. 

Access requires registration, a 

membership fee, a user account, and a 

license agreement to obtain a copy of 

the standard. 

Summary: The NCPDP Real-Time 

Prescription Benefit Standard 

Implementation Guide is intended to 

meet the industry need within the 

pharmacy services sector to facilitate the 

ability for pharmacy benefit payers/ 

processors to communicate to providers 

and to ensure a consistent 

implementation of the standard 

throughout the industry. The Real-Time 

Prescription Benefit (RTPB) Standard 

enables the exchange of patient 

eligibility, product coverage, and benefit 

financials for a chosen product and 

pharmacy, and identifies coverage 

restrictions, and alternatives when they 

exist. 

• National Council for Prescription 

Drug Programs (NCPDP) Formulary and 

Benefit Standard, Implementation 

Guide, Version 60, April 2023 

(Approval Date for ANSI: April 12, 

2023) 

URL: https://standards.ncpdp.org/ 

Access-to-Standards.aspx. 

Access requires registration, a 

membership fee, a user account, and a 

license agreement to obtain a copy of 

the standard. 

Summary: The NCPDP Formulary and 

Benefit Standard Implementation Guide 

is intended to provide a standard means 

for pharmacy benefit payers (including 

health plans and Pharmacy Benefit 

Managers) to communicate formulary 

and benefit information to prescribers 

via technology vendor systems. 

D. Improvements to Drug Management 

Programs (§§ 423.100 and 423.153) 

Section 1860D–4(c)(5)(A) of the Social 

Security Act (the Act) requires that Part 

D sponsors have a drug management 

program (DMP) for beneficiaries at risk 

of abuse or misuse of frequently abused 

drugs (FADs), currently defined by CMS 

as opioids and benzodiazepines. CMS 

codified the framework for DMPs at 

§ 423.153(f) in the April 16, 2018 final 

rule ‘‘Medicare Program; Contract Year 

2019 Policy and Technical Changes to 

the Medicare Advantage, Medicare Cost 

Plan, Medicare Fee-for-Service, the 

Medicare Prescription Drug Programs, 

and the PACE Program’’ (83 FR 16440), 


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47https://www.cdc.gov/mmwr/volumes/65/rr/ 

rr6501e1.htm. 

48https://www.cdc.gov/mmwr/volumes/71/rr/ 

rr7103a1.htm. 

hereafter referred to as the April 2018 

final rule. 

Under current DMP policy, CMS 

identifies potential at-risk beneficiaries 

(PARBs) who meet the clinical 

guidelines described at § 423.153(f)(16), 

which CMS refers to as the minimum 

Overutilization Monitoring System 

(OMS) criteria. CMS, through the OMS, 

reports such beneficiaries to their Part D 

plans for case management under their 

DMP. There are also supplemental 

clinical guidelines, or supplemental 

OMS criteria, which Part D sponsors can 

apply themselves to identify additional 

PARBs. Under § 423.153(f)(2), sponsors 

are required to conduct case 

management for PARBs, which must 

include informing the beneficiary’s 

prescribers of their potential risk for 

misuse or abuse of FADs and requesting 

information from the prescribers 

relevant to evaluating the beneficiary’s 

risk, including whether they meet the 

regulatory definition of exempted 

beneficiary. 

If the sponsor determines through 

case management that the enrollee is an 

at-risk beneficiary (ARB), after notifying 

the beneficiary in writing, the sponsor 

may limit their access to opioids and/or 

benzodiazepines to a selected prescriber 

and/or network pharmacy(ies) and/or 

through a beneficiary-specific point-ofsale claim edit, in accordance with the 

requirements at § 423.153(f)(3). CMS 

regulations at § 423.100 define 

exempted beneficiary, at-risk 

beneficiary, potential at-risk beneficiary, 

and frequently abused drug. 

1. Definition of Exempted Beneficiary 

§ 423.100 

Section 1860D–4(c)(5)(C)(ii) of the Act 

defines an exempted individual as one 

who receives hospice care, who is a 

resident of a long-term care facility for 

which frequently abused drugs are 

dispensed for residents through a 

contract with a single pharmacy, or who 

the Secretary elects to treat as an 

exempted individual. At § 423.100 CMS 

defines an exempted beneficiary as an 

enrollee being treated for active cancerrelated pain, or has sickle-cell disease, 

residing in a long-term care facility, has 

elected to receive hospice care, or is 

receiving palliative or end-of-life care. 

The OMS criteria finalized in the 

April 2018 final rule were developed to 

align with available information and 

guidelines, such as the Centers for 

Disease Control and Prevention (CDC) 

Guideline for Prescribing Opioids for 

Chronic Pain (2016 CDC Guideline) 

issued in March 2016.47 The current 

policy to exempt beneficiaries with 

cancer from DMPs was developed 

through feedback from interested parties 

and alignment with the 2016 CDC 

Guideline’s active cancer treatment 

exclusion. Patients within the scope of 

the 2016 CDC Guideline included 

cancer survivors with chronic pain who 

have completed cancer treatment, were 

in clinical remission, and were under 

cancer surveillance only. The 2022 CDC 

Clinical Practice Guideline for 

Prescribing Opioids for Pain (2022 CDC 

Guideline) 48 expands and updates the 

2016 CDC Guideline to provide 

evidence-based recommendations for 

prescribing opioid pain medication for 

acute, subacute, and chronic pain for 

outpatients aged ≥18 years, excluding 

pain management related to sickle cell 

disease, cancer-related pain treatment, 

palliative care, and end-of-life care. 

In the interest of alignment with the 

2022 CDC Guideline regarding 

applicability in individuals with cancer, 

we are proposing to amend the 

regulatory definition of ‘‘exempted 

beneficiary’’ at § 423.100 by replacing 

the reference to ‘‘active cancer-related 

pain’’ with ‘‘cancer-related pain.’’ With 

this proposal we expand the definition 

of exempted beneficiary to more broadly 

refer to enrollees being treated for 

cancer-related pain to include 

beneficiaries undergoing active cancer 

treatment, as well as cancer survivors 

with chronic pain who have completed 

cancer treatment, are in clinical 

remission, or are under cancer 

surveillance only. 

2. Drug Management Program Notices: 

Timing and Exceptions § 423.153(f)(8) 

As discussed above, sponsors must 

provide case management for any PARB 

that meets the OMS criteria to 

determine whether the individual is an 

ARB and whether to implement a 

limitation on their access to FADs. 

Under section 1860D–4(c)(5)(B)(i)(I) of 

the Act, a sponsor must send an initial 

and second notice to such beneficiary 

prior to imposing such limitation. In the 

April 2018 final rule (83 FR 16440), 

CMS adopted requirements for the 

initial and second notices at 

§ 423.153(f)(5) and (6). The initial notice 

must inform the beneficiary that they 

have been identified as a PARB and 

must include information outlined in 

§ 423.153(f)(5)(ii). The second notice 

must inform the beneficiary that they 

have been identified as an ARB and of 

the limitations on the beneficiary’s 

coverage of FADs, as specified in 

§ 423.153(f)(6)(ii). In the event that, after 

sending an initial notice, a sponsor 

determines that a PARB is not an ARB, 

a second notice would not be sent; 

instead, an alternate second notice 

would be sent. Though not required by 

the Act, CMS codified a requirement at 

§ 423.153(f)(7) to provide an alternate 

second notice for the purpose of 

informing the beneficiary that they are 

not an ARB and that no limitation on 

their coverage of FADs will be 

implemented under the DMP. 

Section 1860D–4(c)(5)(B)(iv) of the 

Act establishes that sponsors must send 

a second notice on a date that is not less 

than 30 days after the initial notice. The 

30 days allow sufficient time for the 

beneficiary to provide information 

relevant to the sponsor’s determination, 

including their preferred prescribers 

and pharmacies. CMS codified at 

§ 423.153(f)(8) the timing for providing 

both the second notice and alternate 

second notice. Currently, CMS requires 

sponsors to send either the second or 

alternate second notice on a date not 

less than 30 days from the date of the 

initial notice and not more than the 

earlier of the date the sponsor makes the 

determination or 60 days after the date 

of the initial notice. 

Based on program experience during 

the first several years of DMPs, we 

propose to change the timeframe within 

which a sponsor must provide an 

alternate second notice to a beneficiary 

who is determined to be exempt from 

the DMP subsequent to receiving an 

initial notice. Specifically, we propose 

to redesignate existing § 423.153(f)(8)(ii) 

as § 423.153(f)(8)(iii), and to revise the 

text at § 423.153(f)(8)(ii) to specify that, 

for such exempted beneficiaries, the 

sponsor must provide the alternate 

second notice within 3 days of 

determining the beneficiary is exempt, 

even if that occurs less than 30 days 

from the date of the initial notice. In 

other words, we propose to remove the 

requirement that sponsors wait at least 

30 days from the date of the initial 

notice to send the alternate second 

notice to exempted beneficiaries. 

Through program oversight, including 

audits of Part D sponsors, CMS has 

observed that initial notices are 

sometimes sent to Part D enrollees who 

meet the definition of an exempted 

beneficiary at § 423.100, often because 

the sponsor does not have the necessary 

information—for example, that the 

enrollee has a cancer diagnosis or is 

receiving palliative care or end-of-life 

care—at the time the sponsor sends the 

initial notice. However, this information 

may be provided later by the enrollee or 

their prescriber in response to the initial 

notice. In some cases, sponsors identify 

exemptions very quickly after issuing 


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Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78505 

49https://www.cms.gov/files/zip/cy-2023-part-ddmp-guidance-april-20-2023.zip. 

50April 20, 2023 HPMS memorandum, 

CORRECTION—Contact Year 2023 Drug 

Management Program Guidance available at: 

https://www.cms.gov/medicare/prescription-drugcoverage/prescriptiondrugcovcontra/rxutilization. 

51Referred to as medication-assisted treatment 

(MAT) in past guidance. 

the initial notice, prior to 30 days 

elapsing. Under current CMS 

regulations, if a beneficiary meets the 

definition of an exempted beneficiary, 

the beneficiary does not meet the 

definition of a PARB. For this reason, 

exempted beneficiaries cannot be placed 

in a Part D sponsor’s DMP. Therefore, as 

stated in the preamble to the April 2018 

final rule (83 FR 16455), a sponsor must 

remove an exempted beneficiary from a 

DMP as soon as it reliably learns that 

the beneficiary is exempt (whether that 

be via the beneficiary, their 

representative, the facility, a pharmacy, 

a prescriber, or an internal or external 

data source, including an internal 

claims system). CMS understands that 

sponsors may have already been 

sending alternate second notices after 

determining that a beneficiary is 

exempt, without waiting for 30 days to 

elapse. This proposed change would 

specify that it is required to send such 

notices to exempted beneficiaries sooner 

than 30 days after the provision of the 

initial notice. 

CMS reminds Part D sponsors that, 

during their review and during case 

management, they are expected to use 

all available information to identify 

whether a PARB is exempt in advance 

of sending an initial notice to protect 

these vulnerable beneficiaries from 

unnecessary burden, anxiety, and 

disruptions in medically necessary drug 

therapy. Thorough review of plan 

records and robust outreach efforts to 

prescribers during case management 

help to minimize the risk that an 

exempted beneficiary would receive an 

initial notice. 

On April 20, 2023, CMS released 

updated DMP guidance.49 Sections 8.1 

and 8.2.2 of the guidance state that if a 

sponsor learns that a beneficiary is 

exempt after sending an initial notice, 

the sponsor should inform the 

beneficiary that the initial notice is 

rescinded. If less than 30 days have 

passed since the initial notice, a sponsor 

should send a Part D Drug Management 

Program Retraction Notice for Exempted 

Beneficiaries. The model retraction 

notice addresses the required 30-day 

timing issue in the current regulation. If 

this proposal to require sponsors to 

provide an alternate second notice to a 

beneficiary who is determined to be 

exempt from the DMP prior to the 

required 30 days elapsing since the 

initial notice is finalized, the Part D 

Drug Management Program Retraction 

Notice for Exempted Beneficiaries 

would no longer be used because 

sponsors would instead send the 

alternate second notice. We are not 

estimating any reduction of burden for 

sponsors no longer using the Retraction 

Notice. The Retraction Notice was 

implemented as a temporary solution 

for Part D sponsors to use for exempted 

beneficiaries in place of the alternate 

second notice, which had been 

accounted for in the latest version of 

CMS–10141 (OMB control number 

0938–0964). 

We note that sponsors may determine 

that a PARB is not an ARB prior to 30 

days elapsing for reasons other than the 

beneficiary being exempted. However, 

we believe the current 30-day 

requirement before a sponsor may send 

an alternate second notice in such 

situations is important to maintain 

because it allows the beneficiary and 

other prescribers enough time to 

provide the sponsor with information 

that may influence the sponsor’s 

determination. 

We propose an additional technical 

change related to the timeframe for 

providing second and alternate second 

notices. The current regulation at 

§ 423.153(f)(8)(i) requires that a sponsor 

provide a second or alternate second 

notice not more than the earlier of the 

date the sponsor makes the relevant 

determination or 60 days after the date 

of the initial notice. It is critical that 

beneficiaries receive timely written 

notice about changes to their access to 

Part D drugs, as well as information 

about appeal rights, and the second and 

alternate second notices are tied to the 

date of the plan’s determination. 

However, CMS understands that 

sponsors may not always be able to 

issue printed notices on the exact day 

they make a determination for a variety 

of reasons, such as they made the 

determination on a day when there is no 

USPS mail service, or later in the day 

after files have been sent to a print 

vendor. 

Specifically, we propose to add at 

§ 423.153(f)(8)(i)(A) a window of up to 

3 days to allow for printing and mailing 

the second notice or alternate second 

notice. We note a 3-day window would 

align with requirements for providing 

written notice of a standard or 

expedited Part D coverage 

determination after initial oral notice, as 

described at §§ 423.568(d) and (f) and 

423.572(b), respectively, and is therefore 

familiar to sponsors. However, unlike 

the circumstances covered by those 

regulatory provisions, sponsors would 

not be providing an initial oral notice, 

as it would be impracticable to verbally 

convey the details of a second notice or 

alternate second notice to an enrollee. 

This proposed change would provide 

sponsors sufficient time to print and 

mail the notices while ensuring that 

beneficiaries receive timely information 

about DMP limitations. Sponsors must 

continue to issue these notices as soon 

as possible when a determination is 

made, and CMS does not expect that 

sponsors will routinely take the 

maximum amount of time. 

We are not proposing to change the 

requirement in § 423.153(f)(8)(i)(B) that 

the second notice or alternate second 

notice must be provided no later than 60 

days from the date of the initial notice. 

This is because sponsors have ample 

time to account in advance for the days 

needed to print and mail these notices. 

3. OMS Criteria Request for Feedback 

CMS regulations at § 423.153(f)(16) 

specify that PARBs and ARBs are 

identified using clinical guidelines that 

are developed with stakeholder 

consultation, derived from expert 

opinion backed by analysis of Medicare 

data, and include a program size 

estimate. In addition, the clinical 

guidelines (also referred to as the ‘‘OMS 

criteria’’) are based on the acquisition of 

FADs from multiple prescribers, 

multiple pharmacies, the level of FADs 

used, or any combination of these 

factors, or a history of opioid-related 

overdose. 

PARBs are the Part D beneficiaries 

whom CMS believes are potentially at 

the highest risk of opioid-related 

adverse events or overdose. The current 

minimum OMS criteria 50 identifies 

PARBs who (1) use opioids with an 

average daily morphine milligram 

equivalents (MME) of greater or equal to 

90 mg for any duration during the most 

recent six months, who have received 

opioids from 3 or more opioid 

prescribers and 3 or more opioid 

dispensing pharmacies, or from 5 or 

more opioid prescribers regardless of 

the number of dispensing pharmacies 

(also referred to as ‘‘MIN1’’ minimum 

OMS criteria), or (2) have a history of 

opioid-related overdose, with a medical 

claim with a primary diagnosis of 

opioid-related overdose within the most 

recent 12 months and a Part D opioid 

prescription (not including Medication 

for Opioid Use Disorder 51 (MOUD)) 

within the most recent 6 months (also 

referred to as ‘‘MIN2’’ minimum OMS 

criteria). The current supplemental 

OMS criteria are for sponsors to address 

plan members who are receiving opioids 

from a large number of prescribers or 


ddrumheller on DSK120RN23PROD with PROPOSALS2
78506 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

52Spencer, Merianne R. et al. (2022). Drug 

Overdose Deaths in the United States, 2001–2021. 

(457). 53https://www.cdc.gov/drugoverdose/deaths/ 

synthetic/index.html. 54CMS used a modified version of the Chronic 

Condition Warehouse (CCW) definition that 

excludes undiagnosed OUD beneficiaries such as 

those with an opioid OD event and also limits 

analysis to the particular measurement period 

instead of the prior two years. 

55Bohnert K.M., Ilgen M.A., Louzon S., McCarthy 

J.F., Katz I.R., Substance use disorders and the risk 

of suicide mortality among men and women in the 

U.S. Veterans Health Administration. Addiction. 

2017 Jul;112(7):1193–1201. doi: 10.1111/add.13774. 

56Over 30,000 Part D enrollees met the minimum 

OMS criteria and were reported to sponsors through 

OMS reports in 2022 (18 percent met the level of 

opioid use though multiple provider criteria, and 82 

percent met the history of history of opioid-related 

overdose criteria). 

57Lo-Ciganic WH, Huang J.L., Zhang H.H., Weiss 

J.C., Wu Y., Kwoh C.K., Donohue J.M., Cochran G., 

Gordon A.J., Malone D.C., Kuza C.C., Gellad W.F. 

Evaluation of Machine-Learning Algorithms for 

Predicting Opioid Overdose Risk Among Medicare 

Beneficiaries With Opioid Prescriptions. JAMA 

Netw Open. 2019 Mar 1;2(3):e190968. doi: 10.1001/ 

jamanetworkopen.2019.0968. Erratum in: JAMA 

Netw Open. 2019 Jul 3;2(7):e197610. PMID: 

30901048; PMCID: PMC6583312. 

58Extreme Gradient Boosting (XGBoost) model— 

data mining technique that is similar to Random 

Forest that combines multiple decision trees into a 

single strong prediction model, but it differs in 

doing so in an iterative manner by building one tree 

at a time and optimizing a differentiable loss 

function. 

pharmacies, but who do not meet a 

particular MME threshold. These are (1) 

use of opioids (regardless of average 

daily MME) during the most recent 6 

months; AND (2) 7 or more opioid 

prescribers OR 7 or more opioid 

dispensing pharmacies. 

In 2019, CMS assigned the Health 

Federally Funded Research and 

Development Center (FFRDC) to 

develop evidence-based 

recommendations for improving the 

OMS criteria for the future. The Health 

FFRDC conducted a literature review, 

facilitated a Technical Expert Panel 

(TEP), and performed data analyses. All 

three activities served as inputs into the 

evidence-based recommendations. The 

Health FFRDC recommended that the 

results of the literature review and data 

analysis support the continued 

inclusion of average MME, number of 

opioid dispensing pharmacies, and 

number of opioids prescribers as 

indicators for PARBs. In addition, they 

recommended that further data analysis 

would be necessary to determine which 

additional criteria would be appropriate 

to potentially adopt. CMS conducted 

subsequent literature reviews and 

analysis. 

In recent years, there has been a 

marked decrease in Medicare Part D 

prescription opioid overutilization, but 

opioid-related overdose deaths continue 

to be a growing problem throughout the 

United States.52 While the CDC found 

synthetic opioids (other than 

methadone) to be the main driver of 

opioid overdose deaths, accounting for 

82 percent of all opioid-involved deaths 

in 2020,53 we must remain vigilant 

regarding the risks of prescription 

opioids including misuse, opioid use 

disorder (OUD), overdoses, and death. 

CMS tracks prevalence rates for 

Medicare Part D beneficiaries with an 

OUD 54 diagnosis and beneficiaries with 

an opioid poisoning (overdose). While 

overall opioid-related overdose 

prevalence rates among Medicare Part D 

enrollees have declined over the period 

from contract year 2017 through 2021 at 

about 6.5 percent per annum, overall 

opioid-related overdose prevalence rates 

increased by 1.0 percent between 2020 

and 2021. Furthermore, about 1.6 

percent of all Part D enrollees had a 

provider diagnosed OUD in contract 

year 2021 and the OUD prevalence rate 

has grown by 3.2 percent per annum 

since contract year 2017. 

A past overdose is the risk factor most 

predictive for another overdose or 

suicide-related event.55 CMS finalized 

regulations to implement section 2004 

of the Substance Use-Disorder 

Prevention that Promotes Opioid 

Recovery and Treatment for Patients 

and Communities (SUPPORT) Act to 

include beneficiaries with a history of 

opioid-related overdose as PARBs in 

DMPs. While the implementation of the 

SUPPORT ACT enables identification of 

beneficiaries with a history of opioidrelated overdose and continues to 

identify PARBs who receive high levels 

of opioids through multiple providers 

who may be more likely to misuse 

prescription opioids,56 CMS is working 

on models that can identify 

beneficiaries potentially at risk before 

their risk level is diagnosed as an OUD 

or the person experiences an opioidrelated overdose. 

A recently published article that 

evaluated the use of machine learning 

algorithms for predicting opioid 

overdose risk among Medicare 

beneficiaries taking at least one opioid 

prescription concluded that the 

machine learning algorithms appear to 

perform well for risk prediction and 

stratification of opioid overdose 

especially in identifying low-risk groups 

having minimal risk of overdose.57

Machine learning is a method of data 

analysis that automates analytical model 

building, based on the idea that systems 

can learn from data, identify patterns 

and make decisions with minimal 

human intervention. 

While we are not proposing changes 

to the clinical guidelines or OMS 

criteria in this proposed rule, we 

provide information on our data 

analysis to date and welcome feedback 

for future changes. Using predictor 

variables identified through the 

literature reviews, CMS performed a 

data analysis to determine the top risk 

factors for Part D enrollees at high-risk 

for one of two outcomes: (1) having a 

new opioid poisoning (overdose) or (2) 

developing newly diagnosed OUD. 

Since Part D enrollees with a known 

opioid-related overdose are already 

identified in OMS, CMS focused on 

individuals at high risk for a new 

opioid-related overdose or OUD. We 

anticipate no burden since, as indicated, 

we are not proposing regulatory changes 

and are soliciting feedback. 

In this analysis, we utilize Medicare 

data and traditional logistic regression 

as well as machine learning models like 

Random Forest, Least Absolute 

Shrinkage and Selection Operator 

(LASSO), and Extreme Gradient 

Boosting (XGBoost) 58 Cross Validation 

(CV) to examine and evaluate 

performance in predicting risk of opioid 

overdose and OUD. The models were 

compared based on the following 

criteria: Area Under the Curve (AUC), 

sensitivity, specificity, positive 

predictive value (PPV), negative 

predictive value (NPV), and number 

needed to examine (NNE). An XGBoost 

model with CV performed best 

according to the specified criteria and 

was selected as the model of choice for 

predicting a beneficiary with a new 

opioid overdose or OUD diagnosis. 

The model population included 

6,756,152 Medicare beneficiaries 

contemporaneously enrolled in Part D 

and Parts A, B, or C during the period 

from January to June 2019, who were 

prescribed at least one non-MOUD 

prescription opioid during the 

measurement period and did not have a 

DMP exemption (that is, cancer, sickle 

cell disease, hospice, LTC facility 

resident, palliative care, or end-of-life 

care). We excluded beneficiaries with a 

prior opioid-related overdose or an OUD 

diagnosis in the year prior to the 

prediction period. The training dataset 

used to build the model consisted of a 

random 75 percent sample of the study 

population (5,067,114). The remaining 

25 percent of the population (1,689,038) 

was used for validating the prediction 

performance of the model. The 

measurement period to obtain 

information for the predictor variables 

(for example, opioid use patterns, 

demographics, comorbidities, etc.) was 

from January 1 to June 30, 2019, and the 

prediction period we used to identify 

beneficiaries with a new opioid 


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59Multicollinearity tests were undertaken in 

order to ensure that there was no collinearity among 

the explanatory variables used in the model. 

60The Generic Product Identifier (GPI) designates 

any or all of a drug’s group, class, sub-class, name, 

dosage form, and strength. 

overdose event or new OUD diagnosis 

was from July 1 to December 31, 2019. 

The following risk factors 59 were 

incorporated into the XGBoost model: 

BILLING CODE 4120–01–P 


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Risk Factor Fla~ Description 

A~e Beneficiary age in years 

Sex Female or Male sex 

Race White, Black, Asian, Hispanic, 

Native American, Other or 

Unknown race/ethnicity 

LIS Beneficiary low-income 

subsidy status 

Dual Beneficiary dual-eligibility 

status 

Current Medicare Entitlement Beneficiary current Medicare 

entitlement: ESRD (1) / nonESRD (2) 

MME Average daily morphine 

milligram equivalents (MME) 

Number of Opioid Pharmacies Number of different pharmacies 

with an opioid prescription drug 

event (PDE) claim 

Number of Opioid Prescribers Number of different opioid 

prescribers 

Number of Short-Acting Number of short-acting opioid 

Opioid Fills PDEs 

Number of Long-Acting Opioid Number of long-acting opioid 

Fills PDEs 

Number of Different Number of different opioids 

Prescription Opioids prescribed (GPI-1460) 

Number ofMOUD Days Number of Medication-Assisted 

Treatment (MOUD) days 

Hepatitis Hepatitis diagnosis 

Cervical nerve injury Cervical nerve iniurv diagnosis 
78508 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

We evaluated the performance of the 

model using the confusion matrix 

generated by applying the prediction model to the validation dataset to 

calculate various metrics. 


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Risk Factor Flae Descriotion 

Lumbar nerve iniury Lumbar nerve iniurv diagnosis 

Thoracic nerve injury Thoracic nerve injury diagnosis 

Neuropathy Neuropathv diagnosis 

Other chronic pain Other chronic pain diagnosis 

Number of Mental Health Number of mental health 

Conditions conditions (ADHD, anxiety, 

bipolar, depression, PTSD, 

personality disorder, 

schizophrenia) diagnosed 

Number of Substance Use Number of substance use 

Disorders disorders (alcohol, cannabis, 

hallucinogen, inhalant, nonpsychoactive, psychoactive, 

sedative, stimulant) diagnosed 

Antianxiety Dru~ Fill PDE claim for antianxiety drug 

Antipsychotic Drug Fill PDE claim for antipsychotic 

drug 

Anticonvulsant Drug Fill PDE claim for anticonvulsant 

drug 

Concurrent use of opioid and Concurrent PDE for opioid and 

benzodiazepine (1 or more benzodiazepine (1 + day 

days) overlap) 

Concurrent use of opioid and Concurrent PDE for opioid and 

benzodiazepine (30 or more benzodiazepine (30+ day 

days) overlap) 

Codeine Fill PDE opioid claim for codeine 

(GPI-10) 

Fentanyl Fill PDE opioid claim for fentanyl 

(GPI-10) 

Methadone Fill PDE opioid claim for 

methadone (GPI-10) 

Morphine Fill PDE opioid claim for morphine 

(GPI-10) 

Oxycodone Fill PDE opioid claim for 

oxvcodone (GPI-10) 

Oxymorphone Fill PDE opioid claim for 

oxvmorphone (GPI-10) 

Tramadol Fill PDE opioid claim for tramadol 

(GPI-10) 

Hydrocodone Fill PDE opioid claim for 

hvdrocodone (GPI-10) 

Hydromorphone Fill PDE opioid claim for 

hydromorphone (GPI-10) 

Other Opioid Fill PDE opioid claim for other 

opioid (GPI-10) 
Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78509 

Confusion Matrix and Performance 

Metrics for the XGBoost model: 

The top 15 risk factors that were 

highly associated with a new OUD or 

opioid-related overdose diagnosis were: 


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Actual New OUD Predicted New Predicted New Total 

or Opioid-Related OUD or Opioid- OUD or OpioidOverdose Related Related 

Diagnosis: Overdose Overdose 

Diagnosis: No Diagnosis: 

Yes 

No 1,154,395 513,551 1,667,946 

Yes 3,920 17,172 21,092 

Total 1,158,315 530,732 1,689,038 

Criteria Result 

AUC 0.8253 

Sensitivity 81.41 Percent 

Specificity 69.21 Percent 

PPV 3 .24 Percent 

NPV 99.66 Percent 

NNE 31 

Probability Threshold 0.474 
78510 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

The number of short-acting 

prescription opioid fills and the average 

daily MME were found to contribute 

most to XGBoost model predictions of a 

new OUD or opioid-related overdose 

diagnosis. Risk was present across a 

range of MME levels and increased with 

higher MME levels. The risk of 

developing a new OUD or opioid-related 

overdose diagnosis also increased with 

the number of diagnosed mental health 

or substance use disorders. Utilization 

of opioids with other high-risk 

medications like anticonvulsants, 

benzodiazepines, anti-psychotics, and 

anti-anxiety medications were 

positively associated with higher risk. 

Also, utilization of opioids like 

oxycodone and morphine were 

positively associated with higher risk, 

while utilization of codeine, tramadol, 

and opioids in the other category were 

positively associated with lower risk. 

Lastly, we applied our finalized 

model to data from October 1, 2021, 

through March 31, 2022, to predict 

future new opioid-related overdose 

events and OUD diagnoses during the 

period from April 1, 2022, to September 

30, 2022, to understand program size 

estimates and NNE values. 


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Rank Risk Factor Variable Gain 

1 Number of Short-Acting Opioid Fills 0.3853 

2 MME* 0.1256 

3 Age 0.0882 

4 Number of Long-Acting Opioid Fills 0.0729 

5 Number of Mental Health Conditions 0.0539 

6 Number of Substance Use Disorders 0.0298 

7 Anticonvulsant Drug Fill 0.0294 

8 Number of Different Prescription Opioids 0.0234 

9 Oxycodone Fill 0.0230 

10 Other Opioid Fill 0.0227 

11 Dual 0.0200 

12 Number of Opioid Prescribers* 0.0148 

13 Concurrent use of opioid and benzodiazepine (30 or more 0.0134 

days) 

14 Morphine Fill 0.0112 

15 LIS 0.0102 

*Part of current minimum OMS criteria. 
Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78511 

61CMS also notes that historically, only about 1.6 

percent of the beneficiaries meeting the history of 

opioid-related overdose (MIN2) OMS criteria also 

meet the (MIN1) minimum OMS criteria. 

BILLING CODE 4120–01–C 

Between 9 percent and 15 percent of 

the beneficiaries with a predicted new 

opioid-related overdose/OUD actually 

experienced a new overdose or OUD 

diagnosis during the evaluation period 

(April 1, 2022, through September 30, 

2022) depending on the Risk Probability 

Threshold. The Top 1 percent threshold 

(n = 62,571) reported the lowest 

precision score, while the Top 1,000 

threshold showed the highest precision. 

Among those who had a new opioidrelated overdose/OUD in the evaluation 

period, about 92 percent developed a 

new OUD; the proportion with a new 

opioid overdose increased from 10 

percent to 17 percent as the risk 

probability threshold increased from the 

Top 1 percent to the Top 1,000; and, as 

the risk probability threshold increased, 

about 2 percent to 8 percent had both 

a new opioid overdose and were 

identified as having a newly diagnosed 

OUD. Among the different Risk 

Probability Thresholds, between 93 to 

98 percent of the correctly predicted 

new overdoses/OUDs do not meet the 

current OMS criteria. The percentage 

that meets the current OMS criteria 

decreases as the Risk Probability 

Threshold becomes more restrictive. 

Thus, our analysis shows that there is 

very little overlap between the 

population identified through this 

model and beneficiaries already 

identified through the OMS.61

Furthermore, our analysis confirms that 

machine learning models can analyze 

large datasets and identify complex 

patterns that are not easily discernible 

by current non-statistical approaches. 

This makes them a powerful tool for 

identifying new opioid-related overdose 

or OUD risk and capturing an additional 

population of potential at-risk 

beneficiaries who have not been 

identified through our current OMS 

criteria. 

CMS next plans to assess risk in the 

model, validate the stability of the 

model as new data become available, 

and develop guidelines on how to 

feasibly implement the model into the 

existing DMP and OMS processes. We 

solicit feedback on the following: 

• Potentially using such a model to 

enhance the minimum or supplemental 

OMS criteria in the future (either in 

addition to the current criteria or as a 

replacement). 

• How to avoid the stigma and/or 

misapplication of identification of a 

PARB at high risk for a new opioidrelated overdose or OUD using the 

variables in the model. 

• Implementation considerations, 

such as effectively conducting case 

management, as described in 

§ 423.153(f)(2), with prescribers of 

PARBs identified by the model; 

opportunities to promote MOUD, coprescribing of naloxone, or care 

coordination; or potential unintended 

consequences for access to needed 

medications. 


ddrumheller on DSK120RN23PROD with PROPOSALS2EP15NO23.018</GPH>

Risk Probability Number of Beneficiaries Number of PPV NNE 

Threshold with Predicted New OUD True (Percent) 

or Opioid-Related Positives* 

Overdose Diaswosis 

Top 1 percent** 16,862 1,860 11.01 9 

(Validation Data) 

Top 1 percent 62,571 5,445 8.70 11 

Top 50,000 50,000 4,562 9.12 11 

Top 40,000 40,000 3,792 9.48 11 

Top 30,000 30,000 2,996 9.99 10 

Top 20,000 20,000 2,168 10.84 9 

Top 10,000 10,000 1,219 12.19 8 

Top 5,000 5,000 679 13.58 7 

Top 1,000 1,000 150 15.00 7 

*True Positives are beneficiaries that were categorized into the given risk probability threshold group based on data 

from the October l, 2021, to March 31, 2022, measurement period, then were subsequently found to have 

experienced a new opioid OD/OUD during the April l, 2022, to September 30, 2022, prediction period. 

**Validation data: random 25 percent sample of total population: January l, 2019, to June 30, 2019, measurement 

period, and July l, 2019, to December 31, 2019, prediction period. 
78512 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

62Available at https://www.hhs.gov/guidance/ 

sites/default/files/hhs-guidance-documents/ 

ctm%20plan%20sop%20eff053019.pdf. 

63Available at https://www.cms.gov/medicare/ 

prescription-drug-coverage/prescriptiondrug

covcontra/downloads/dwnlds/chapter7pdf. 

• Other factors to consider. 

E. Codification of Complaints 

Resolution Timelines and Other 

Requirements Related to the Complaints 

Tracking Module (CTM) (42 CFR 

417.472(l), 422.125, 423.129, and 

460.119) 

CMS maintains the CTM in the Health 

Plan Management System (HPMS) as the 

central repository for complaints 

received by CMS from various sources, 

including, but not limited to the 

Medicare Ombudsman, CMS 

contractors, 1–800–MEDICARE, and 

CMS websites. The CTM was developed 

in 2006 and is the system used to 

comply with the requirement of section 

3311 of the Affordable Care Act for the 

Secretary to develop and maintain a 

system for tracking complaints about 

MA and Part D plans received by CMS, 

CMS contractors, the Medicare 

Ombudsman, and others. Complaints 

from beneficiaries, providers, and their 

representatives regarding their Medicare 

Advantage (MA) organizations, Cost 

plans, Programs of All-inclusive Care for 

the Elderly (PACE) organizations, and 

Part D sponsors are recorded in the CTM 

and assigned to the appropriate MA 

organization, Cost plan, PACE 

organization, and Part D sponsor if CMS 

determines the plan, organization, or 

sponsor is responsible for resolving the 

complaint. Unless otherwise noted, 

‘‘plans’’ applies to Medicare Advantage 

(MA) organizations, Part D sponsors, 

Cost plans, and PACE organizations for 

purposes of this proposal. 

We are proposing to codify existing 

guidance for the timeliness of complaint 

resolution by plans in the CTM. 

Currently, §§ 422.504(a)(15) and 

423.505(b)(22) require MA organizations 

and Part D sponsors to address and 

resolve complaints received by CMS 

against the MA organization and Part D 

sponsor through the CTM; we are 

proposing to codify the expectation in 

guidance that Cost plans and PACE 

organizations also address and resolve 

complaints in the CTM. We are 

proposing to codify the existing priority 

levels for complaints based on how 

quickly a beneficiary needs to access 

care or services and to codify a new 

requirement for plans to make first 

contact with individuals filing nonimmediate need complaints within 

three (3) calendar days. This time frame 

would not apply to immediate need 

complaints because those complaints 

need to be resolved within two calendar 

days. 

CMS codified the requirement for MA 

organizations and Part D sponsors to 

address and resolve complaints in the 

CTM at §§ 422.504(a)(15) and 

423.505(b)(22) in the ‘‘Medicare 

Program; Changes to the Medicare 

Advantage and the Medicare 

Prescription Drug Benefit Programs for 

Contract Year 2012 and Other Changes’’ 

(76 FR 21431), which appeared in the 

April 15, 2011 Federal Register 

(hereafter referred to as the ‘‘April 2011 

final rule’’). As described in the April 

2011 final rule, the regulation requires 

that MA organizations and Part D 

sponsors provide a summary of the 

resolution in the CTM when a 

complaint is resolved. (76 FR 21470) 

As Part D sponsors, Cost plans and 

PACE organizations that offer Part D 

coverage have been required to comply 

with § 423.505(b)(22). We are proposing 

to add language to §§ 417.472(l) and 

460.119 to codify in the Cost plan 

regulations and PACE regulations, 

respectively, the requirement that Cost 

plans and PACE organizations address 

and resolve complaints in the CTM. 

This proposed new requirement would 

apply to all complaints in the CTM for 

Cost plans and PACE organizations, not 

just complaints about Part D. 

In addition, CMS has issued guidance 

describing our expectations for how 

complaints should be handled. In the 

Complaints Tracking Module Plan 

Standard Operational Procedures (CTM 

SOP), the most recent version of which 

was released on May 10, 2019, via 

HPMS memo,62 CMS provides detailed 

procedures for plans to use when 

accessing and using the CTM to resolve 

complaints. This includes describing 

the criteria CMS uses in designating 

certain complaints as ‘‘immediate need’’ 

or ‘‘urgent’’ (all other complaints are 

categorized ‘‘No Issue Level’’ in the 

CTM), setting forth our expectation that 

plans should review all complaints at 

intake, and documentation requirements 

for entering complaint resolutions in the 

CTM. The CTM SOP defines an 

‘‘immediate need complaint’’ for MA 

organizations, Cost plans, and PACE 

organizations as ‘‘a complaint where a 

beneficiary has no access to care and an 

immediate need exists.’’ For Part D 

sponsors, ‘‘an immediate need 

complaint is defined as a complaint that 

is related to a beneficiary’s need for 

medication where the beneficiary has 

two or less days of medication 

remaining.’’ The CTM SOP defines an 

‘‘urgent complaint’’ for MA 

organizations, Cost plans, and PACE 

organizations as a complaint that 

‘‘involves a situation where the 

beneficiary has no access to care, but no 

immediate need exists.’’ For Part D 

sponsors, ‘‘an urgent complaint is 

defined as a complaint that is related to 

the beneficiary’s need for medication 

where the beneficiary has 3 to 14 days 

of medication left.’’ 

In chapter 7, section 70.1 of the 

Prescription Drug Benefit Manual, 

‘‘Medication Therapy Management and 

Quality Improvement Program,’’ 63 CMS 

requires Part D sponsors to resolve any 

‘‘immediate need’’ complaints within 

two (2) calendar days of receipt into the 

CTM and any ‘‘urgent’’ complaints 

within seven (7) calendar days of receipt 

into the CTM. Chapter 7, section 70.1 

also sets forth CMS’s expectation that 

Part D sponsors promptly review CTM 

complaints and notify the enrollee of 

the plan’s action as expeditiously as the 

case requires based on the enrollee’s 

health status. 

Requirements for resolution of 

complaints received in the CTM do not 

override requirements related to the 

handling of appeals and grievances set 

forth in 42 CFR part 422, subpart M 

(which apply to cost plans as well as 

MA organizations per § 417.600), part 

423, subpart M, for Part D sponsors, and 

§§ 460.120 through 460.124 for PACE 

organizations. Rather, CTM 

requirements supplement the appeals 

and grievance requirements by 

specifying how organizations must 

handle complaints received by CMS in 

the CTM and passed along to the plan. 

The requirement for organizations to 

enter information on the resolution of 

complaints in the CTM within specified 

time periods allows CMS to track and 

ensure accountability for complaints 

CMS itself received, either directly from 

beneficiaries or via entries in the CTM 

from the Medicare ombudsman, CMS 

contractors, or others. A beneficiary 

who filed a complaint directly with 

CMS may later contact CMS to find out 

the status of the complaint and the 

plan’s use of the system would allow 

CMS to answer the beneficiaries 

inquires more expeditiously. In order to 

comply with the applicable regulations, 

plans must handle any CTM complaint 

that is also an appeal or grievance 

within the meaning of the regulation in 

such a way that complies with the 

notice, timeliness, procedural, and other 

requirements of the regulations 

governing appeals and grievances. 

We are proposing to codify the 

timeliness requirements for MA 

organizations and Part D plans at new 

§§ 422.125 and 423.129, both titled 

‘‘Resolution of Complaints in 

Complaints Tracking Module.’’ We are 


ddrumheller on DSK120RN23PROD with PROPOSALS2
Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78513 

proposing to codify these requirements 

for Cost plans and PACE organizations 

at §§ 417.472(l) and 460.119 by 

incorporating §§ 422.504(a)(15) and 

422.125 by reference into the 

requirements for Cost plans and PACE 

organizations, respectively. 

Specifically, we propose to codify at 

§§ 422.125(a) and 423.129(a) the 

definitions of ‘‘immediate need’’ and 

‘‘urgent’’ complaints in substantially the 

same way as they are currently defined 

in guidance for MA and Part D-related 

complaints. However, we propose to 

specify that immediate need and urgent 

complaints for MA plans (as well as 

Cost plans, and PACE) also include 

situations where a beneficiary has 

access to enough of a drug or supply to 

last fewer than 2 days or from 3 to 14 

days, respectively, as part of the 

definition that these complaints are 

about situations that prevent the 

beneficiary from accessing care or a 

service. This proposed change 

recognizes that some complaints to an 

MA organization (or Cost plan or PACE 

organization) may overlap with Part D 

access, such as when a beneficiary 

reports a problem with their enrollment 

in an MA–PD plan that is blocking 

access to Part D coverage. The change 

also recognizes that non-Part D MA, 

Cost plan, and PACE complaints relate 

not just to access to physician services 

but to drugs and supplies that may be 

covered by the MA plan, Cost plan, or 

PACE organization’s non-Part D benefit 

(for example, Part B drugs or diabetic 

test strips covered under the medical 

benefit of an MA plan). Further, MA 

plans, Cost plans, and PACE also cover 

Part B drugs. 

We also propose to codify at 

§§ 422.125(b) and 423.129(b) the current 

timeframes reflected in section 70.2 of 

chapter 7 of the Prescription Drug 

Benefit Manual for resolving immediate 

need and urgent complaints. A two (2) 

calendar day deadline for resolving 

plan-related immediate need complaints 

is both consistent with current practice 

by plans and logically follows from the 

definition of an ‘‘immediate need’’ 

complaint. By its nature, an immediate 

need complaint requires swift action. 

Because we define immediate need, in 

part, as a situation where a beneficiary 

has access to two or fewer days’ worth 

of a drug or supply they need, a timeline 

greater than two calendar days for 

resolving a complaint would represent 

an unacceptable risk to beneficiaries. 

Similarly, a seven (7) calendar day 

deadline for ‘‘urgent’’ complaints 

reflects the importance of not delaying 

resolution of a situation that is 

preventing access to care or services a 

beneficiary needs. Because we define 

‘‘urgent’’ in part as a situation where a 

beneficiary has 3 to 14 days’ worth of 

a drug or supply they need, allowing 

more than a week to elapse before 

resolving the complaint would put 

beneficiaries at unacceptable risk of not 

receiving replacement drugs or supplies 

timely. 

For all other Part D and non-Part D 

complaints in the CTM, we propose 

requiring resolution within 30 days of 

receipt. This is consistent with current 

practice and the guidance in section 

70.2 of chapter 7 of the Prescription 

Drug Benefit Manual, and we believe 

would prevent complaints from 

lingering for months without resolution 

in the CTM. Further, a 30-day timeframe 

for resolving complaints in the CTM 

aligns with the 30-day period provided 

in §§ 422.564(e) and 423.564(e) for 

resolution of grievances. Although those 

regulations permit an extension of up to 

14 days for resolving the grievance if the 

enrollee requests the extension or if the 

organization justifies a need for 

additional information and documents 

how the delay is in the interest of the 

enrollee, we do not believe that 

including the authority to extend the 

deadline to resolve complaints in the 

CTM is appropriate because complaints 

received into the CTM are often the 

result of failed attempts to resolve issues 

directly with the plan. Allowing plans 

to further extend the time to resolve the 

complaint only allows further delays in 

addressing beneficiary concerns. 

Moreover, recent evidence indicates that 

the vast majority of non-immediate need 

or urgent complaints are resolved 

within 30 days—98% of such 

complaints were resolved by plans 

within 30 days in 2022. 

All timeframes for resolution would 

continue to be measured from the date 

a complaint is assigned to a plan in the 

CTM, rather than the date the plan 

retrieves the complaint from the CTM. 

This is consistent with current guidance 

and practice. Measuring the timeframe 

in this manner is the best way to protect 

beneficiaries from delayed resolution of 

complaints and encourages 

organizations to continue retrieving 

CTM complaints in a timely manner so 

that they have sufficient time to resolve 

complaints. 

We do not anticipate that plans will 

have difficulty meeting these 

timeframes. The vast majority of 

complaints are currently resolved in the 

timelines specified for the priority level 

of the complaint. For example, in 2022, 

plans resolved 97 percent of complaints 

within the required time frames for the 

level of complaint. Plans resolved 94 

percent of immediate need complaints 

within 2 calendar days, 97 percent of 

urgent complaints within 7 calendar 

days, and 98 percent of complaints with 

no issue level designated within 30 

calendar days. Codifying the timeframes 

as proposed merely formalizes CMS’s 

current expectations and the level of 

responsiveness currently practiced by 

plans. 

We are also proposing to create a new 

requirement for plans to contact 

individuals filing non-immediate need 

complaints. At §§ 422.125(c) and 

423.129(c), we propose to require plans 

to contact the individual filing a 

complaint within three (3) calendar 

days of the complaint being assigned to 

a plan. While current guidance 

generally includes the expectation that 

organizations inform individuals of the 

progress of their complaint, CMS has 

never specified a timeframe for reaching 

out to a complainant. CMS has observed 

that, particularly for complaints that are 

not assigned a priority level, plans 

sometimes wait until the timeframe for 

resolution has almost elapsed to contact 

the complainant. Because the timeframe 

for resolving uncategorized complaints 

is 30 days, an individual who files a 

complaint may wait weeks to hear back 

from the plan responsible for resolving 

it. We believe that such delays cause 

unnecessary frustration for beneficiaries 

and are inconsistent with the customer 

service we expect from plans. 

We acknowledge that our proposed 

timeframe for reaching out to the 

complainant concerning a CTM 

complaint is more specific than our 

requirement at §§ 422.564(b) and 

423.564(b) for plans to ‘‘promptly 

inform the enrollee whether the 

complaint is subject to its grievance 

procedures or its appeals procedures.’’ 

We are proposing a specific timeframe 

for contacting the beneficiary regarding 

a CTM complaint because, unlike with 

complaints received by the plans 

outside the CTM, the complainant has 

not reached out directly to the plan and 

may not know that their complaint has 

been passed on to the plan by CMS via 

the CTM. Moreover, as previously 

noted, CMS monitors the handling of 

complaints it receives through the CTM 

in real time. Part of handling CTM 

complaints through the CTM, as 

required by §§ 422.504(a)(15) and 

423.505(b)(22), is entering information 

into the CTM when the plan reaches out 

to the complainant. CMS would 

therefore be able to monitor whether a 

plan has reached out to a beneficiary 

within the required timeframe and 

follow up with the plan well before 

timeframe for resolving the complaint 

has elapsed. 

We are proposing a 3 calendar day 

timeframe for reaching out to the 


ddrumheller on DSK120RN23PROD with PROPOSALS2
78514 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

64We note the distinction between formulary 

substitutions made by a plan sponsor and product 

substitutions made by a pharmacist at the point-ofdispensing. As we describe in section III.F.2.a.(2) of 

this proposed rule, State laws govern the ability of 

pharmacists to substitute biological products at the 

point-of-dispensing. By contrast, the Secretary’s 

statutory authority under section 1860D–11(e)(2) of 

the Act governs approval of, and by extension any 

changes to, Part D formularies. The provisions we 

describe throughout section III.F of this proposed 

rule strictly apply to changes to Part D formularies 

made by plan sponsors, and do not apply to 

substitutions made by pharmacists at the point-ofdispensing. 

individual filing the complaint because 

it would provide a timely update to 

individuals filing both urgent and 

uncategorized complaints without 

delaying resolution of immediate need 

complaints. We expect that a plan 

would indicate in this communication 

that the plan has received and is 

working on the complaint, and that they 

provide contact information that the 

individual filing the complaint could 

use to follow up with the plan regarding 

the complaint. We solicit comment on 

whether this timeframe is appropriate 

and whether a longer or shorter 

timeframe would better balance the 

needs of beneficiaries with the capacity 

of plans to respond to complaints. 

We are also proposing conforming 

changes to §§ 422.504(a)(15) and 

423.505(b)(22) to incorporate the 

proposed new requirements into the 

existing contractual requirements for 

MA organizations and Part D sponsors. 

The proposed revisions to §§ 417.472(l) 

and 460.119 incorporate both the 

requirements in proposed § 422.125 and 

the requirement for a contract term for 

resolving complaints received by CMS 

through the CTM for Cost plans and 

PACE organizations and their contracts 

with CMS. 

F. Additional Changes to an Approved 

Formulary—Biosimilar Biological 

Product Maintenance Changes and 

Timing of Substitutions (§§ 423.4, 

423.100, and 423.120(e)(2)) 

1. Introduction 

Section 1860D–11(e)(2) of the Act 

provides that the Secretary may only 

approve Part D plans if certain 

requirements are met, including the 

provision of qualified prescription drug 

coverage. Section 1860D–11(e)(2)(D) of 

the Act specifically permits approval 

only if the Secretary does not find that 

the design of the plan and its benefits, 

including any formulary and tiered 

formulary structure, are likely to 

substantially discourage enrollment by 

certain Part D eligible individuals. 

Section 1860D–4(c)(1)(A) of the Act 

requires ‘‘a cost-effective drug 

utilization management program, 

including incentives to reduce costs 

when medically appropriate.’’ Lastly, 

section 1860D–4(b)(3)(E) of the Act 

requires Part D sponsors to provide 

‘‘appropriate notice’’ to the Secretary, 

affected enrollees, physicians, 

pharmacies, and pharmacists before 

removing a covered Part D drug from a 

formulary or changing the preferred or 

tiered cost-sharing status of such a drug. 

In section III.Q., Changes to an 

Approved Formulary, of the proposed 

rule titled ‘‘Medicare Program; Contract 

Year 2024 Policy and Technical 

Changes to the Medicare Advantage 

Program, Medicare Prescription Drug 

Benefit Program, Medicare Cost Plan 

Program, Medicare Parts A, B, C, and D 

Overpayment Provisions of the 

Affordable Care Act and Programs of 

All-Inclusive Care for the Elderly; 

Health Information Technology 

Standards and Implementation 

Specifications,’’ which appeared in the 

December 27, 2022 Federal Register 

(hereinafter referred to as the December 

2022 proposed rule), we proposed 

regulations related to (1) Part D sponsors 

obtaining approval to make changes to 

a formulary already approved by CMS, 

including extending the scope of 

immediate formulary substitutions (also 

generally referred to as immediate 

substitutions herein); 64 and (2) Part D 

sponsors providing notice of such 

changes. 

The December 2022 proposed rule 

proposed to reorganize current 

regulatory text to incorporate and as 

necessary conform with longstanding 

sub-regulatory guidance and operations 

with respect to changes to an approved 

formulary and associated notice 

provisions. For example, 

§ 423.120(b)(5)(iv) currently permits a 

plan sponsor to immediately remove a 

brand name drug from its formulary 

when adding a therapeutically 

equivalent generic drug, subject to 

certain requirements. If finalized, the 

December 2022 proposed rule would 

expand immediate substitutions in a 

new § 423.120(e)(2)(i) to allow plan 

sponsors to substitute an authorized 

generic for a brand name drug, an 

interchangeable biological product for a 

reference product, or an unbranded 

biological product for its corresponding 

brand name biological product under 

the same biologics license application 

(BLA). 

These and other proposals discussed 

in section III.Q., Changes to an 

Approved Formulary, of the December 

2022 proposed rule have not been 

finalized and remain under 

consideration. As we noted in the April 

2023 final rule, CMS intends to address 

remaining proposals from the December 

2022 proposed rule in subsequent 

rulemaking, which would be effective 

no earlier than January 1, 2025. As we 

continue to consider comments we 

received in response to the December 

2022 proposed rule, we identified a 

limited number of changes that we 

would like to make to the proposed 

regulatory text relating to section III.Q. 

of the December 2022 proposed rule. 

Accordingly, this proposed rule reflects 

our intent to consider section III.Q. of 

the December 2022 proposed rule, as 

updated by the limited proposed 

changes discussed herein, for inclusion 

in future rulemaking. While we discuss 

below certain comments regarding the 

December 2022 proposed rule that 

informed the limited proposed changes 

herein, we will respond to comments 

received in response to section III.Q. of 

the December 2022 proposed rule, as 

well as comments received in response 

to the changes proposed below, if we 

decide to move forward with such 

proposals in future rulemaking. 

Commenters on section III.Q. of the 

December 2022 proposed rule did not 

agree on the requirements that should 

apply to formularies substituting Food 

and Drug Administration (FDA) 

approved and licensed biosimilar 

biological products. Different 

commenters submitted divergent 

requests that substitutions of biosimilar 

biological products other than 

interchangeable biological products be 

treated as immediate substitutions, be 

treated as maintenance changes, or not 

be permitted whatsoever. Our proposed 

regulatory text in the December 2022 

proposed rule only addressed 

substitution of interchangeable 

biological products and did not specify 

how Part D sponsors could treat 

substitution of biosimilar biological 

products other than interchangeable 

biological products, and we believe, in 

part because of the interest in the topic, 

that it would be appropriate to propose 

to do so now in order to solicit comment 

directly on the subject. 

Accordingly, we are proposing to 

update the regulatory text we proposed 

in the December 2022 proposed rule to 

the extent necessary to permit Part D 

sponsors to treat substitutions of 

biosimilar biological products other 

than interchangeable biological 

products as ‘‘maintenance changes,’’ as 

defined in the December 2022 proposed 

rule, for the reasons discussed below. 

We are also proposing to define a new 

term, ‘‘biosimilar biological product,’’ 

distinct from our previously proposed 

term ‘‘interchangeable biological 

products.’’ (We propose some technical 

changes to the latter term as well.) 


ddrumheller on DSK120RN23PROD with PROPOSALS2
Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78515 

We propose to define biosimilar 

biological products consistent with 

sections 351(i) and (k) of the Public 

Health Service Act to include 

interchangeable biological products. In 

section III.Q (87 FR 79536) of the 

December 2022 proposed rule, we 

proposed to permit maintenance 

changes and immediate substitutions 

involving interchangeable biological 

products, and that proposal is still 

under consideration. In this proposed 

rule, we are also proposing to allow 

substitution of biosimilar biological 

products other than interchangeable 

biological products for reference 

products as a maintenance change. To 

ensure clarity, we are proposing to 

address the application of these policies 

to interchangeable biological products 

and to biosimilar biological products 

other than interchangeable biological 

products in separate paragraphs of the 

proposed definition of maintenance 

change in § 423.100. 

Further, in considering a comment on 

immediate formulary substitutions, we 

also determined it would be appropriate 

to propose providing Part D sponsors 

with additional flexibility with respect 

to maintenance changes and immediate 

substitutions than as originally 

proposed in the December 2022 

proposed rule. Rather than requiring a 

Part D sponsor to add a ‘‘corresponding 

drug’’ and make a ‘‘negative formulary 

change’’ (as both such terms are defined 

in the December 2022 proposed rule) to 

its related drug ‘‘at the same time,’’ we 

are proposing additional flexibility. 

Specifically, we propose to allow Part D 

sponsors to make a negative formulary 

change to the related drug within a 

certain period of time following the 

addition of the corresponding drug— 

rather than at the same time they add 

the corresponding drug. 

Additionally, we propose a technical 

change to our proposed definition of 

‘‘corresponding drug’’ in § 423.100 

included in the December 2022 

proposed rule to specify that the 

reference to an ‘‘unbranded biological 

product of a biological product’’ is 

intended to be a reference to ‘‘an 

unbranded biological product marketed 

under the same BLA as a brand name 

biological product.’’ 

Lastly, we are taking this opportunity 

to address a technical change to the 

regulatory text proposed in the 

December 2022 proposed rule to specify 

in introductory language to the 

§ 423.100 proposed definition of 

‘‘maintenance change’’ that changes 

apply with respect to ‘‘a covered Part D 

drug.’’ 

Our goal in this proposed rule is to 

focus only on these specific changes to 

the original proposals in the December 

2022 proposed rule that remain under 

consideration, but as updated below. 

We are re-proposing in this proposed 

rule only the regulatory text in the 

December 2022 proposed rule necessary 

to address new policy considerations 

and, therefore, we include only the 

updated parts of the three following 

sections of proposed regulatory text in 

the December 2022 proposed rule: 

§§ 423.4; 423.100; and 423.120(e)(2). 

Section III.F.2.a. of tis proposed rule 

includes both language and synopses of 

the preamble to the December 2022 

proposed rule as necessary to provide 

context for the updates we are 

proposing in this proposed rule. Except 

as specified in this proposed rule, 

stakeholders should assume, as does the 

discussion in this proposed rule, that 

the proposals for regulatory text 

regarding changes to approved 

formularies otherwise remain under 

consideration as proposed in the 

December 2022 proposed rule. If any 

provisions regarding this topic are 

finalized, the final rule would include 

the provisions proposed in the 

December 2022 proposed rule, as 

revised by the proposed changes in this 

proposed rule and taking into 

consideration any potential changes in 

response to comments. 

We received numerous comments on 

section III.Q. of the December 2022 

proposed rule on changes to an 

approved formulary, comments which 

we have carefully reviewed and 

continue to consider (and some of 

which are discussed in this proposed 

rule). We solicit comments on any 

aspects regarding the changes we are 

proposing in this rule to the December 

2022 proposed rule’s provisions. 

2. Substituting Biosimilar Biological 

Products for Their Reference Products 

as Maintenance Changes 

a. Previously Proposed Provisions 

(1) Certain Previously Proposed 

Provisions Related to Maintenance and 

Non-Maintenance Changes 

In section III.Q.2.b., Proposed 

Provisions for Approval of Formulary 

Changes, of the December 2022 

proposed rule, we proposed to define 

terms such as ‘‘negative formulary 

change’’ and ‘‘affected enrollee.’’ In 

categorizing negative formulary 

changes, we discussed the fact that 

chapter 6 of the Prescription Drug 

Benefit Manual also classifies negative 

formulary changes as either 

maintenance or non-maintenance 

changes. Maintenance changes are 

changes generally expected to pose a 

minimal risk of disrupting drug therapy 

or are warranted to address safety 

concerns or administrative needs (for 

example, drug availability due to 

shortages and determining appropriate 

payment such as coverage under Part B 

or Part D). We noted that in our 

experience the vast majority of negative 

formulary changes are ‘‘maintenance’’ 

changes that CMS routinely approves, 

and the vast majority of maintenance 

changes are generic substitutions, in 

which the Part D sponsor removes a 

brand name drug and adds its generic 

equivalent. 

We then noted that consistent with 

our current manual policy and 

operations, we were proposing at 

§ 423.100 to define ‘‘maintenance 

changes’’ to mean the following negative 

formulary changes: (1) making any 

negative formulary changes to a drug 

and at the same time adding a 

corresponding drug at the same or lower 

cost-sharing tier and with the same or 

less restrictive prior authorization (PA), 

step therapy (ST), or quantity limits 

(QL) requirements (other than those 

meeting the requirements of immediate 

substitutions currently permitted and 

that we proposed to permit in the 

December 2022 proposed rule); (2) 

removing a non-Part D drug; (3) adding 

or making more restrictive PA, ST, or 

QL requirements based upon a new 

FDA-mandated boxed warning; (4) 

removing a drug deemed unsafe by FDA 

or withdrawn from sale by the 

manufacturer if the Part D sponsor 

chooses not to treat it as an immediate 

negative formulary change; (5) removing 

a drug based on long-term shortage and 

market availability; (6) making negative 

formulary changes based upon new 

clinical guidelines or information or to 

promote safe utilization; or (7) adding 

PA to help determine Part B versus Part 

D coverage. We additionally stated that 

we intended through the use of the 

plural tense to clarify that Part D 

sponsors may request to apply more 

than one negative formulary change 

simultaneously to that drug. 

We noted that non-maintenance 

changes, which are infrequently 

warranted, are negative formulary 

changes that limit access to a specific 

drug without implementing a 

corresponding offset (such as adding an 

equivalent drug) or addressing safety or 

administrative needs. We proposed to 

define ‘‘non-maintenance change’’ at 

§ 423.100 to mean a negative formulary 

change that is not a maintenance change 

or (as discussed in the next paragraph) 

an immediate negative formulary 

change. 

We also introduced a third category of 

negative formulary changes in § 423.100 

to capture negative formulary changes 


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65The December 2022 proposed rule cited 

Semglee® (insulin glargine-yfgn). Other 

interchangeable biological products now available 

include Cyltezo® (adalimumab-adbm) and 

RezvoglarTM (insulin glargine-aglr). 

that fall within certain parameters and 

that may be made immediately. We 

proposed to define ‘‘immediate negative 

formulary changes’’ as those which meet 

the requirements as either an immediate 

substitution or market withdrawal 

under § 423.120(e)(2)(i) or (ii) 

respectively. We noted, however, that 

while such changes may be made 

immediately, Part D sponsors retain the 

option to implement such changes as 

maintenance changes. This means that 

those Part D sponsors that can meet all 

applicable requirements would have a 

choice as to whether to make such 

changes immediately and thereafter 

provide notice of specific changes or 

submit a negative change request and 

provide specific notice of such changes 

to affected enrollees at least 30 days 

before they occur. 

We also proposed to define 

‘‘corresponding drug’’ in § 423.100 to 

mean, respectively, a generic or 

authorized generic of a brand name 

drug, an interchangeable biological 

product of a reference product, or an 

unbranded biological product of a 

biological product and to move and 

retain our current regulatory description 

of ‘‘other specified entities’’ currently in 

§ 423.120(b)(5)(i) to be a standalone 

definition of the term in § 423.100. 

We proposed in § 423.120(e) that Part 

D sponsors may not make any negative 

formulary changes to the CMS-approved 

formulary except as specified in the 

regulation. 

We proposed to codify our existing 

policy with respect to maintenance 

changes, which would, at proposed 

§ 423.120(e)(3)(i), permit Part D 

sponsors that have submitted a 

maintenance change request to assume 

that CMS has approved their negative 

change request if they do not hear back 

from CMS within 30 days of 

submission. We proposed to codify our 

existing policy with respect to nonmaintenance changes as well, which 

would specify at § 423.120(e)(3)(ii) that 

Part D sponsors must not implement 

non-maintenance changes until they 

receive notice of approval from CMS. 

We also proposed to codify our 

longstanding policy that affected 

enrollees are exempt from approved 

non-maintenance changes for the 

remainder of the contract year at 

§ 423.120(e)(3)(ii). 

In section III.Q.3.b., Alignment of 

Approval and Notice Policy, of the 

December 2022 proposed rule, we noted 

in relevant part that: we first proposed 

in § 423.120(f)(1) to specify that only 

maintenance and non-maintenance 

negative formulary changes would 

require 30 days’ advance notice to CMS 

and other specified entities, and in 

writing to affected enrollees. We also 

proposed to retain at § 423.120(f)(1) an 

alternative option for Part D sponsors to 

provide an affected enrollee who 

requests a refill of an approved month’s 

supply of the Part D drug under the 

same terms as previously allowed, as 

well as written notice of the change. We 

further proposed in § 423.120(f)(5)(i) to 

require Part D sponsors to provide 

advance general notice of other 

formulary changes to all current and 

prospective enrollees and other 

specified entities, in formulary and 

other applicable beneficiary 

communication materials, advising that 

the formulary may change subject to 

CMS requirements; providing 

information about how to access the 

plan’s online formulary and contact the 

plan; and stating that the written notice 

of any change made when provided 

would describe the specific drugs 

involved. For immediate substitutions, 

we indicated we would require 

information on the steps that enrollees 

may take to request coverage 

determinations and exceptions. We 

noted that our current model documents 

already largely provide advance general 

notice of such changes. Section 

423.120(f)(5)(ii) as proposed in the 

December 2022 proposed rule would 

further require that Part D sponsors 

provide enrollees and other specified 

entities notice of specific formulary 

changes by complying with 

§ 423.128(d)(2) and provide CMS with 

notice of specific changes through 

formulary updates. 

We proposed to revise and renumber 

the existing regulation to specify that, 

except for immediate negative formulary 

changes, negative formulary changes 

require at least 30 days advance notice. 

Consistent with our proposal for 

approval of maintenance changes, we 

proposed that a Part D sponsor could 

submit the negative change request, 

which would constitute its notice to 

CMS, and notice to other specified 

entities at the same time. We explained 

this would permit the Part D sponsor to 

implement the maintenance change 

once it is deemed approved under 

proposed § 423.120(e)(3)(i)—although 

facing the risk of sending notice of a 

change that is subsequently disapproved 

by CMS. 

We also noted that Part D sponsors 

currently submit negative change 

requests to CMS via HPMS that specify 

the negative change’s intended effective 

date, which under our proposed 

approach, would have to be at least 30 

days after submission for a maintenance 

change. However, consistent with our 

previous proposal under 

§ 423.120(f)(3)(ii) to prohibit Part D 

sponsors from implementing nonmaintenance changes until they receive 

notice of approval from CMS, Part D 

sponsors would not be permitted to 

provide notice to other specified entities 

or affected enrollees, or to otherwise 

update formularies or other materials, 

until CMS has approved the nonmaintenance change. We also discussed 

updating online notice of negative 

formulary changes at § 423.128(d)(2)(iii). 

(2) Certain Previously Proposed 

Provisions Related to Interchangeable 

Biological Products as Immediate 

Negative Formulary Changes 

In section III.Q.2.b.(3), Immediate 

Negative Formulary Changes, of the 

December 2022 proposed rule, we 

proposed to permit immediate 

substitutions of interchangeable 

biological products for their reference 

products. In our preamble, we reviewed 

how, under the current 

§ 423.120(b)(5)(iv), we permit 

immediately substituting new generic 

drugs for brand name drugs, and that 

current § 423.120(b)(5)(iii) permits the 

immediate removal of drugs deemed 

unsafe by FDA or withdrawn from sale 

by their manufacturers. We then 

discussed our proposal to broaden the 

scope of permitted immediate 

substitutions at § 423.120(e)(2)(i) to 

include authorized generics as defined 

at § 423.4. 

We noted that when we first adopted 

the immediate substitution policy, we 

stated that the regulation would not 

apply to biological products, but that we 

would reconsider the issue when 

interchangeable biological products 

became available in Part D. In the 

December 2022 proposed rule, we noted 

there was at least one interchangeable 

biological product and also an 

unbranded biological product marketed 

under the same license, and that other 

licensed interchangeable biological 

products may become available in Part 

D in the future.65 Accordingly, we stated 

we believed it appropriate to expand 

our policy to include interchangeable 

biological products and unbranded 

biological products marketed under the 

same license as the brand name 

biological products when immediate 

substitution would not disrupt existing 

therapy. We noted that as discussed in 

the preamble to the proposed rule titled, 

‘‘Medicare Program; Contract Year 2019 

Policy and Technical Changes to the 

Medicare Advantage, Medicare Cost 

Plan, Medicare Fee-for-Service, the 


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Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78517 

66Public Health Service Act section 351(i)(3) (42 

U.S.C. 262(i)(3)). 

67 ‘‘Biosimilar and Interchangeable Biologics: 

More Treatment Choices’’ at the following FDA 

website: https://www.fda.gov/consumers/consumerupdates/biosimilar-and-interchangeable-biologicsmore-treatment-choices. Accessed April 26, 2022. 

68Cardinal Health. Biosimilar Interchangeability 

Laws by State. Updated July 2021. Available from: 

https://www.cardinalhealth.com/content/dam/ 

corp/web/documents/publication/Cardinal-HealthBiosimilar-Interchangeability-Laws-by-State.pdf. 

69See section 351(k)(4) of the PHSA (42 U.S.C. 

262(k)(4)). We cited as current at the time, 

‘‘Considerations in Demonstrating 

Interchangeability With a Reference Product 

Guidance for Industry’’ at the following FDA 

website: https://www.fda.gov/regulatoryinformation/search-fda-guidance-documents/ 

considerations-demonstrating-interchangeabilityreference-product-guidance-industry. Accessed 

September 2, 2022. See also section 351(i)(3) of the 

PHSA (42 U.S.C. 262(i)(3)) for the statutory 

definition of the term ‘‘interchangeable’’ or 

‘‘interchangeability.’’ 

70We note that in the December 2022 proposed 

rule, the actual statement read: ‘‘Biosimilar 

products have not met additional requirements to 

support a demonstration of interchangeability based 

on further evaluation and testing of the product, as 

outlined by the Biologics Price Competition and 

Innovation (BPCI) Act.’’ This statement failed to 

capture the nuances that the definition of a 

biosimilar biological product includes 

interchangeable biological products, and that a 

determination of interchangeability may not require 

additional testing. 

71We propose a definition of ‘‘biosimilar 

biological product’’ later in this section. 

Medicare Prescription Drug Benefit 

Programs, and the PACE Program,’’ 

which appeared in the November 28, 

2017 Federal Register (82 FR 56413), in 

deciding to permit immediate generic 

substitutions without advance direct 

notice of specific changes to affected 

enrollees, CMS, or other specified 

entities, we weighed the need to 

maintain the continuity of a plan’s 

formulary for beneficiaries who enroll 

in plans based on the drugs offered at 

the time of enrollment against the need 

to provide Part D sponsors more 

flexibility to facilitate the use of new 

generics. We stated that key to our 

decision to permit such substitutions 

was the fact that the rule would apply 

only to therapeutically equivalent 

generics of the affected brand name drug 

because such generics are the same as 

an existing approved brand name drug 

in dosage form, safety, strength, route of 

administration, and quality. Congress, 

we noted, defined ‘‘interchangeable’’ in 

reference to biological products, stating 

that interchangeable biological products 

‘‘may be substituted for the reference 

product without the intervention of the 

health care professional who prescribed 

the reference product.’’ 66 We also 

explained that FDA reports that this is 

similar to how generic drugs are 

routinely substituted for brand name 

drugs.67

We then noted that all 50 States now 

permit or require pharmacists to 

substitute interchangeable biological 

products when available, for prescribed 

reference products at the point-ofdispensing, subject to varying 

requirements regarding patient and 

prescriber notice, documentation of the 

substitution, and patient savings as a 

result of the substitution, among other 

safeguards.68 In the context of a growing 

market for interchangeable biological 

products, to follow the lead of FDA in 

encouraging uptake of these products, 

and to provide flexibility that could lead 

to better management of the Part D 

benefit that does not impede State 

pharmacy practices, we proposed at 

§ 423.120(e)(2)(i) to permit Part D 

sponsors meeting the applicable 

requirements to immediately substitute 

an interchangeable biological product 

for the reference product on its 

formulary. In support of that proposal, 

we also proposed the following 

definitions at § 423.4: An 

‘‘interchangeable biological product’’ 

would mean a product licensed under 

section 351(k) of the Public Health 

Service Act (PHSA) (42 U.S.C. 262(k)) 

that FDA has determined to be 

interchangeable with a reference 

product in accordance with sections 

351(i)(3) and 351(k)(4) of the PHSA (42 

U.S.C. 262(i)(3) and 262(k)(4)).69 We 

stated that a ‘‘biological product’’ would 

mean a product licensed under section 

351 of the PHSA, and a ‘‘reference 

biological product’’ would mean a 

product as defined in section 351(i)(4) 

of the PHSA. 

We also noted that in addition to 

interchangeable biological products, 

unbranded biological products have 

recently been marketed. We explained 

that in the frequently asked questions of 

FDA’s ‘‘Purple Book Database of 

Licensed Biological Products,’’ available 

at https://purplebooksearch.fda.gov/ 

faqs#11, FDA describes an ‘‘unbranded 

biologic’’ or ‘‘unbranded biological 

product’’ as an approved brand name 

biological product that is marketed 

under its approved BLA without its 

brand name on its label. Thus, like an 

authorized generic, an unbranded 

biological product is the same product 

as the brand name biological product. 

Accordingly, since we proposed in the 

December 2022 proposed rule to permit 

Part D sponsors to immediately 

substitute an authorized generic for a 

brand name drug, we similarly proposed 

at § 423.120(e)(2)(i) in that proposed 

rule to permit immediately substituting, 

as specified, unbranded biological 

products for corresponding brand name 

biological products. We further 

proposed at § 423.4 to define ‘‘brand 

name biological products’’ to mean 

biological products licensed under 

section 351(a) or 351(k) of the PHSA 

and marketed under a brand name. We 

also proposed at § 423.4 to define 

‘‘unbranded biological products’’ as 

biological products licensed under a 

BLA under section 351(a) or 351(k) of 

the PHSA and marketed without a brand 

name. 

We also noted we were not proposing 

to permit Part D sponsors to 

immediately substitute all ‘‘biosimilar 

products’’ (87 FR 79539) because not all 

biosimilar biological products have met 

additional requirements to support a 

demonstration of interchangeability, as 

outlined by the Biologics Price 

Competition and Innovation (BPCI) Act 

of 2009.70 Nevertheless, we encouraged 

Part D plan sponsors to offer such 

products on their formularies. 

The remainder of the section covered 

a variety of topics including proposed 

changes to terminology; use of plural 

tense for negative formulary changes to 

reflect the possibility of concurrent 

changes; exemption of immediate 

negative formulary changes from 

negative change request and approval 

processes and inclusion in formulary 

updates; market withdrawals including 

renumbering; and exemption of all 

immediate negative formulary changes 

from transition requirements. 

In section III.Q.3.c., Notice of 

Negative Immediate Changes, of the 

December 2022 proposed rule, we noted 

that, consistent with our existing 

requirements for immediate generic 

substitutions (which we proposed to 

broaden to include other corresponding 

drugs), we were proposing to require 

advance general notice of immediate 

substitutions and market withdrawals at 

§ 423.120(f)(2), followed by written 

notice to affected enrollees as soon as 

possible under § 423.120(f)(3), but by no 

later than the end of the month 

following any month in which a change 

takes effect. We provided details on the 

content of the direct written notice at 

§ 423.120(f)(4), noted it could be 

provided for both maintenance and nonmaintenance changes, and noted that we 

were renumbering some current 

regulatory requirements. 

b. Current Proposals 

(1) Substituting Biosimilar Biological 

Products for Their Reference Products 

as Maintenance Changes 

In the December 2022 proposed rule, 

we indicated that biosimilar biological 

products 71 other than interchangeable 


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78518 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

72FDA. Overview of Biosimilar Products. 

Available from: https://www.fda.gov/media/ 

151058/download?attachment. 

73We would note that in our December 2022 

proposed rule, we already proposed the option for 

Part D sponsors to treat substitution of 

interchangeable biological products for their 

reference products as maintenance changes: We 

proposed in paragraph (1) of the proposed 

definition of ‘‘maintenance change’’ in § 423.100 to 

mean, in part, making any negative formulary 

changes to a drug and at the same time adding a 

corresponding drug as specified. In turn, we 

proposed to define ‘‘corresponding drug’’ in 

§ 423.100 to include an interchangeable biological 

product of a reference product. In this proposed 

rule, we are proposing to add a new paragraph (2) 

to the proposed definition of ‘‘maintenance change’’ 

in § 423.100 to treat substitution of biosimilar 

biological products other than interchangeable 

biological products for their reference products as 

maintenance changes. 

74https://www.fda.gov/drugs/pharmaceuticalquality-resources/current-good-manufacturingpractice-cgmp-regulations. Accessed October 18, 

2023. 

75See FDA website entitled ‘‘Biosimilar and 

Interchangeable Biologics: More Treatment 

Choices’’ at: https://www.fda.gov/consumers/ 

consumer-updates/biosimilar-and-interchangeablebiologics-more-treatmentchoices#:∼:text=Biosimilars%20

are%20a%20type%20of,macular%20

degeneration%2C%20and%20some%20cancers. 

Accessed October 18, 2023. 

76See 42 U.S.C. 262(i)(3) and (k)(4). 

biological products did not qualify for 

immediate substitutions but nonetheless 

encouraged their inclusion on 

formularies. However, neither the 

preamble at section III.Q., Changes to an 

Approved Formulary, in the December 

2022 proposed rule, nor the 

accompanying proposed regulatory text, 

explicitly discussed whether we would 

treat the substitution of biosimilar 

biological products other than 

interchangeable biological products for 

their reference products as nonmaintenance changes or as maintenance 

changes, as respectively proposed to be 

defined in section § 423.100 in the 

December 2022 proposed rule. Our 

current guidance treats such 

substitutions as non-maintenance 

changes. 

Nevertheless, we received multiple 

comments regarding this issue with a 

range of views. Commenters asking CMS 

to treat substitutions of reference 

products with biosimilar biological 

products, including interchangeable 

biological products, as immediate 

formulary changes or maintenance 

changes noted, for example, that FDA 

states that biosimilar biological 

products, including interchangeable 

biological products, are as safe and 

effective as the reference product they 

were compared to,72 and that 

beneficiaries could benefit from 

additional treatment options and the 

potential for savings. Commenters 

asking CMS to restrict immediate 

substitutions to interchangeable 

biological products noted, among other 

things, that the PHSA distinguishes 

between biosimilar biological products 

based on interchangeability. 

Commenters asking us not to permit 

immediate substitutions, or even any 

substitutions, of biosimilar biological 

products, including interchangeable 

biological products, for reference 

products noted, for instance, that 

established drug therapies should not be 

changed for non-clinical reasons to 

avoid risk to patient safety and that 

prescribers need to be consulted before 

changing medications. 

We appreciate all the comments we 

received. In response thereto, and after 

further consideration of these issues, we 

have revisited our current policy, which 

treats substitutions of biosimilar 

biological products for reference 

products as non-maintenance changes, 

as well as our proposal in the December 

2022 proposed rule. Upon further 

consideration, we are now proposing in 

this rule to include substitutions of 

biosimilar biological products other 

than interchangeable biological 

products 73 for their reference products 

as maintenance changes. All FDAlicensed biosimilar biological products, 

including FDA-licensed interchangeable 

biological products, must be highly 

similar to and have no clinically 

meaningful differences from the 

reference product in terms of safety and 

effectiveness notwithstanding minor 

differences in clinically inactive 

components. Thus, based on FDA’s 

standards for approval, health care 

providers and patients can be confident 

in the safety and effectiveness of all 

biosimilar biological products, just as 

they would be for their reference 

products. The FDA has noted that all 

biosimilar biological products are as 

safe and effective as their reference 

product: 

Both are rigorously and thoroughly 

evaluated by the FDA before approval. 

For [biosimilar biological products] to 

be approved by the FDA, manufacturers 

must show that patients taking 

[biosimilar biological products] do not 

have any new or worsening side effects 

as compared to people taking the 

[reference products]. 

As it does with all medication 

approvals, the FDA carefully reviews 

the data provided by manufacturers and 

takes several steps to ensure that all 

[biosimilar biologic products] meet 

standards for patient use. The FDA’s 

thorough evaluation makes sure that all 

[biosimilar biological products] are as 

safe and effective as their [reference 

products] and meet the FDA’s high 

standards for approval. This means 

[consumers] can expect the same safety 

and effectiveness from the [biosimilar 

biological product] over the course of 

treatment as [they] would from the 

original product. 

In addition, the FDA closely regulates 

the manufacturing of [biosimilar 

biological products]. The same quality 

manufacturing standards that apply to 

the [reference product] also apply to the 

[biosimilar biological product]. It must 

be manufactured in accordance with 

Current Good Manufacturing 

Practice[74] requirements, which cover: 

Methods, Facilities, and Controls for the 

manufacturing, processing, packaging, 

or holding of a medication. This helps 

to prevent manufacturing mistakes or 

unacceptable impurities, and to ensure 

consistent product quality. 

* * * * * 

[All biosimilar biological products, 

not just interchangeable biological 

products,] are as safe and effective as 

the [reference product] they were 

compared to, and they can both be used 

in its place. This means that health care 

professionals can prescribe either a 

biosimilar [biological product] or 

interchangeable [biological] product 

instead of the [reference product].75

However, we note that under the 

PHSA an FDA determination that a 

biological product is interchangeable 

with the reference product means that 

the interchangeable biological product 

may be substituted without the 

intervention of the health care provider 

who prescribed the reference product. A 

manufacturer of a proposed 

interchangeable biological product must 

show that the product is biosimilar to its 

reference product and that it can be 

expected to produce the same clinical 

results as the reference product in any 

given patient and there are no greater 

risks in terms of safety or diminished 

efficacy with alternating or switching 

between the reference product and the 

interchangeable biological product.76

We appreciate the importance of 

provider and patient education to 

advance uptake and acceptance as the 

development and market for biosimilar 

biological products, including 

interchangeable biological products, 

continues to grow. 

We believe that including 

substitutions of biosimilar biological 

products other than interchangeable 

biological products for their reference 

products as maintenance changes would 

strike the right balance between 

promoting utilization of more biosimilar 

biological products and providing 

enrollees with sufficient advance notice 


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77See proposed § 423.120(e)(3)(ii), of the 

December 2022 proposed rule, which would codify 

longstanding policy regarding non-maintenance 

changes. 

78See § 423.120(b)(5)(iv). 

of such changes. This proposal would 

provide Part D sponsors with more 

flexibility than the current policy of 

treating such changes as nonmaintenance changes (which do not 

apply to enrollees who are currently 

taking a reference product when the 

change takes effect 77) but would not 

extend the flexibility to what is 

permitted for immediate substitutions 

(which apply to all enrollees, including 

those currently taking a reference 

product, but only require direct notice 

of specific changes made to affected 

enrollees after the fact 78). We realize 

now that not addressing in the 

December 2022 proposed rule the 

treatment of biosimilar biological 

products other than interchangeable 

biological products suggested that we 

wanted to continue our sub-regulatory 

policy of treating substitution of 

reference products by biosimilar 

biological products other than 

interchangeable biological products as 

non-maintenance changes. However, 

continuing to treat such changes as nonmaintenance would not support our 

goal to encourage greater use of 

biosimilar biological products. 

At the same time, we are not 

convinced that it is appropriate at this 

time to propose to permit immediate 

substitutions of reference products for 

biosimilar biological products other 

than interchangeable biological 

products without 30 days advance 

notice. In this regard, we would note 

that, pharmacists generally cannot 

substitute a biosimilar biological 

product other than an interchangeable 

biological product for its reference 

product without first consulting the 

prescribing health care provider, subject 

to State pharmacy laws. If a biosimilar 

biological product other than an 

interchangeable biological product were 

able to be immediately substituted, the 

result is that any enrollee seeking a refill 

on their prescription for a reference 

product after a Part D sponsor has 

substituted a biosimilar biological 

product for that reference product 

(regardless of whether such a formulary 

change were permitted to take place as 

an immediate substitution or a 

maintenance change) would be told that 

their plan no longer covers the reference 

product. And, subject to State pharmacy 

laws, a pharmacist in most cases would 

not be able to provide the corresponding 

biosimilar biological product to the 

enrollee unless they receive a new 

prescription from a prescriber. 

The above would mean that, were we 

to treat substitutions of biosimilar 

biological products other than 

interchangeable biological products as 

immediate substitutions, enrollees 

currently taking a reference product 

would receive no direct advance notice 

of specific changes made and would 

likely find themselves at the pharmacy 

counter unable to obtain coverage for 

their reference product and needing to 

either request an exception or obtain a 

new prescription for the biosimilar 

biological product. Such enrollees 

would receive a notice at the point of 

sale telling them what they or their 

prescriber would need to do to request 

an exception to stay on the reference 

product and that they can call their plan 

for more information. To avoid a 

situation in which the enrollee might 

not have medication on hand and need 

to take quick action, but at the same 

time still encourage the use of all 

biosimilar biological products, we are 

proposing to treat such substitutions as 

maintenance changes. Given that 

maintenance changes would apply to all 

enrollees under proposed 

§ 423.120(e)(3) in the December 2022 

proposed rule, permitting Part D 

sponsors to substitute such biosimilar 

biological products for their reference 

products as maintenance changes would 

presumably result in more widespread 

use of such products than continuing 

our current sub-regulatory policy that 

treats such substitutions as nonmaintenance changes. Further, under 

current sub-regulatory policy and 

proposed § 423.120(e)(3)(i) in the 

December 2022 proposed rule, Part D 

sponsors that submit a maintenance 

change request are able to assume that 

CMS has approved their negative 

change request if they do not hear back 

from CMS within 30 days of 

submission, which could result in 

changes that take place more quickly. 

Additionally, we believe that the 30- 

day notice period is appropriate for a 

variety of reasons. We have applied the 

30-day time frame in other contexts 

(such as notice of changes required 

under current § 423.120(b)(5)(i)(A) and 

for changes proposed in our December 

2022 proposed rule) and are hesitant to 

create more confusion by carving out 

certain biosimilar biological products. 

We understand the nature of the change 

is different from, for instance, 

substituting generic drugs for brand 

name drugs, in that in most states the 

enrollees that are prescribed reference 

products must at this time obtain new 

prescriptions for biosimilar biological 

products other than interchangeable 

biological products. However, this 

would not be the only time an enrollee 

has 30 days’ notice within which to 

obtain a new prescription. For instance, 

in the final rule titled ‘‘Medicare 

Program; Contract Year 2019 Policy and 

Technical Changes to the Medicare 

Advantage, Medicare Cost Plan, 

Medicare Fee-for-Service, the Medicare 

Prescription Drug Benefit Programs, and 

the PACE Program,’’ which appeared in 

the April 16, 2018 Federal Register, we 

reduced the time for advance direct 

notice of certain formulary changes from 

60 to 30 days and since its effective 

date, § 423.120(b)(5)(i)(A) has required 

only 30 days’ notice of changes to the 

formulary that are not immediate. A 

similar period applies to the transition 

process for enrollees prescribed Part D 

drugs that are not on the Part D plan’s 

formulary: under § 423.120(b)(3)(iii), 

enrollees receive a month’s supply of a 

drug after which they must obtain a new 

prescription for an alternate drug or 

apply for an exception. If we required 

Part D sponsors to issue notice earlier, 

for instance to provide advance notice 

90 days prior to the formulary change, 

the lengthened notice period would 

provide Part D sponsors less time within 

a year for a change to be effective and 

might unintentionally motivate them to 

wait until the next plan year—which 

would defeat the goal of this proposal to 

encourage uptake of biosimilar 

biological products other than 

interchangeable biological products 

sooner than would otherwise be the 

case. 

If a Part D sponsor were to implement 

a maintenance change for a biosimilar 

biological product other than an 

interchangeable biological product 

under our proposal, then it would work 

as follows: Part D sponsors removing or 

making any negative changes to a 

reference product would be required to 

add a biosimilar biological product 

other than an interchangeable biological 

product at the same or a lower costsharing tier and with the same or less 

restrictive PA, ST, or QL requirements 

as the reference product. Part D 

sponsors adding a biosimilar biological 

product other than an interchangeable 

biological product would also be 

required to provide 30 days’ advance 

written notice before making any 

negative change to the reference 

product. The written notice under 

proposed § 423.120(f)(4) would include 

details regarding the change, including 

the specific biosimilar biological 

product to be added to the formulary; 

whether the sponsor will be removing 

the related reference product, subjecting 

it to a new or more restrictive PA, ST, 


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or QL, or moving it to a higher costsharing tier; and identification of 

whether appropriate alternatives, other 

than the biosimilar biological product 

that is the subject of the notice, are 

available on the formulary at the same 

or lower cost-sharing tier as the 

reference product. The written notice 

would also include the means by which 

the affected enrollee can request a 

coverage determination under § 423.566 

or an exception to a coverage rule under 

§ 423.578. Specifically, under § 423.566, 

the enrollee can always ask for a 

coverage determination, including an 

exception to a coverage rule, and might 

choose to do so after receiving their 

notice of a specific change due to occur 

within 30 days. Furthermore, the 

enrollee can also request an expedited 

determination if their health requires. 

Again, treating the change as a 

maintenance change would mean 

enrollees have 30 days to take action 

before the change becomes effective. 

We would note that the Part D 

transition policy does not apply to 

midyear maintenance changes. An 

enrollee is only entitled to a transition 

supply under § 423.120(b)(3)(i)(A) if the 

enrollee is new to the plan or stayed in 

the plan until the next contract year and 

a drug they are taking is affected by 

formulary changes in the next contract 

year. Formulary changes from one 

contract year to the next do not 

constitute changes to an approved 

formulary since formularies are 

submitted for review and approval 

annually as part of the Part D bid 

submission process. Rather, the advance 

direct notice of changes currently 

required under § 423.120(b)(5)(i), and 

which we proposed to require in the 

December 2022 proposed rule at the 

proposed § 423.120(f)(1), provides an 

affected enrollee with time to obtain a 

new prescription for that biosimilar 

biological product other than an 

interchangeable biological product or to 

seek an exception, before the reference 

product comes off the formulary. 

We assume that in most cases, 

substituting a biosimilar biological 

product other than an interchangeable 

biological product for the reference 

product on the formulary will be more 

financially favorable to enrollees since 

biosimilar biological products are 

generally lower cost than reference 

products and must be added to the same 

or lower cost-sharing tier as the 

reference product. However, differences 

in plan benefit designs make it 

challenging to predict the degree of 

savings an enrollee may experience. For 

example, if a Part D sponsor removes a 

reference product from the formulary 

and adds a biosimilar biological product 

other than an interchangeable biological 

product to the formulary on the same 

tier, the affected enrollee likely would 

experience savings if the cost sharing for 

the tier is based on a percent 

coinsurance, but not if the cost sharing 

for the tier is a fixed copay. If an 

affected enrollee pursues a formulary 

exception to continue to take the nonformulary reference product, these 

enrollees may be faced with higher outof-pocket costs, depending on the tier 

that the Part D sponsor designates for 

Part D drugs obtained through formulary 

exceptions and the tier that the 

reference product was originally on. If 

the reference product was on a preferred 

tier, but the formulary exception tier 

designated in the plan benefit package 

is the non-preferred tier, then affected 

enrollees who obtain a formulary 

exception may be subject to higher cost 

sharing than previously. 

For the reasons discussed above, we 

are now proposing to update the 

proposed definition of ‘‘maintenance 

changes’’ at § 423.100 in the December 

2022 proposed rule to include a new 

paragraph (2) on making any negative 

formulary changes to a reference 

product when adding a biosimilar 

biological product other than an 

interchangeable biological product to 

the same or a lower cost-sharing tier and 

with the same or less restrictive PA, ST, 

or QL requirements. We would 

renumber the remaining maintenance 

changes listed in the proposed 

definition in the December 2022 

proposed rule. 

We are also proposing in this 

proposed rule at § 423.4 to define 

‘‘biosimilar biological product’’ to mean 

a biological product licensed under 

section 351(k) of the PHSA that, in 

accordance with section 351(i)(2) of the 

PHSA, is highly similar to the reference 

product, notwithstanding minor 

differences in clinically inactive 

components, and has no clinically 

meaningful differences between the 

biological product and the reference 

product, in terms of the safety, purity, 

and potency of the product. The 

proposed term, biosimilar biological 

product, includes interchangeable 

biological products as we proposed to 

define them in our December 2022 

proposed rule. We are also proposing a 

technical correction to the proposed 

definition of an interchangeable 

biological product to mean a product 

licensed under section 351(k) of the 

PHSA (42 U.S.C. 262(k)) that FDA has 

determined meets the standards 

described in section 351(k)(4) of the 

PHSA (42 U.S.C. 262(k)(4)). 

We solicit comment on our proposal 

to treat formulary substitutions of 

biosimilar biological products other 

than interchangeable biological 

products for reference products as 

maintenance changes, as well as our 

proposed definition of biosimilar 

biological product. We also would be 

interested in any comments on our 

proposal that enrollees taking a 

reference product would receive 30 

days’ notice before the change is made 

and whether that is sufficient time to 

obtain a new prescription for the 

biosimilar biological product other than 

an interchangeable biological product, 

as well as how that 30-day notice period 

relates to the timing of other notice 

requirements. We also solicit comment 

on our proposal that the biosimilar 

biological product other than the 

interchangeable biological product be 

placed on the same or a lower costsharing tier as the reference product it 

replaces or that is subject to negative 

formulary changes. 

(2) Updated Proposal Related to Timing 

of Substitutions 

In reexamining our proposed 

definition of ‘‘maintenance changes’’ in 

§ 423.100 in the December 2022 

proposed rule to add a new category for 

biosimilar biological products other 

than interchangeable biological 

products in paragraph (2), as discussed 

above, we also revisited paragraph (1) of 

the proposed definition, in which we 

proposed to require Part D sponsors 

making a negative formulary change to 

a drug to ‘‘at the same time’’ add a 

corresponding drug at the same or lower 

cost-sharing tier and with the same or 

less restrictive PA, ST, or QL 

requirements (excluding immediate 

substitutions permitted under the 

proposed § 423.120(e)(2)(i) of the 

December 2022 proposed rule). 

Considering that our current subregulatory guidance does not require 

maintenance substitutions to occur ‘‘at 

the same time,’’ we have reconsidered 

and do not believe it is necessary to 

propose imposing such strict timing 

requirements for a maintenance 

change—whether it be related to plan 

sponsors removing or making negative 

changes (1) to a brand name or reference 

product when adding a corresponding 

drug that is not an immediate 

substitution, or (2) to a reference 

product when adding a biosimilar 

biological product other than an 

interchangeable biological product. We 

would like to encourage plans to offer 

more choices by adding corresponding 

drugs (the proposed definition of which 

in the December 2022 proposed rule 

includes interchangeable biological 

products) and biosimilar biological 

products other than interchangeable 


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biological products to their formularies 

as soon as possible. We are concerned 

that requiring such an addition to occur 

‘‘at the same time’’ as the negative 

formulary change to the brand name 

drug or reference product could cause a 

Part D sponsor to delay adding a 

corresponding drug or biosimilar 

biological product other than an 

interchangeable biological product until 

the Part D sponsor has taken the steps 

it deems necessary to operationalize the 

negative changes that would be made to 

the brand name drug or reference 

product currently on the formulary, 

which in turn would delay enrollee 

access to the corresponding drug or 

biosimilar biological product other than 

an interchangeable biological product. 

Therefore, we propose to remove the 

requirement to have changes take place 

‘‘at the same time’’ in the December 

2022 proposed rule’s definition of 

‘‘maintenance change’’ at proposed 

§ 423.100, and will not add that 

modifier for the change for biosimilar 

biological products other than 

interchangeable biological products that 

we are proposing in this proposed rule, 

with the understanding that the 

addition of the corresponding drug or 

biosimilar biological product other than 

an interchangeable biological product 

would need to come before the negative 

change is applied to the brand name 

drug or reference product. Further, this 

proposed update to the definition of a 

maintenance change does not alter other 

proposed requirements for maintenance 

changes in the December 2022 proposed 

rule, including that CMS must be 

provided a 30-day opportunity to review 

any such changes and in all cases 

enrollees will receive at least 30 days’ 

notice before a drug is removed or 

subject to any other negative formulary 

change. 

At the same time, we are not 

proposing an unlimited window in 

which to make a negative formulary 

change to the related drug after adding 

a corresponding drug under paragraph 

(1) or adding a biosimilar biological 

product other than an interchangeable 

biological product under paragraph (2) 

of the proposed § 423.100 definition of 

a ‘‘maintenance change.’’ We believe 

Part D sponsors should make such 

negative changes within a reasonable 

amount of time after adding 

corresponding drugs and biosimilar 

biological products other than 

interchangeable biological products as 

specified in order to best achieve the 

goal of increasing their utilization. We 

understand that Part D sponsors may be 

eager to add, for example, a newly 

approved generic drug or biosimilar 

biological product to their formularies, 

but may need additional time to 

operationalize the negative formulary 

change to the brand name or reference 

product, respectively; however, we do 

not believe that Part D sponsors should 

have an unlimited amount of time to 

effectuate the negative formulary change 

because this presents challenges for 

CMS to monitor and deviates from the 

idea that such formulary changes are in 

many cases substitutions of one drug for 

another. In other words, the addition of 

a corresponding drug or a biosimilar 

biological product other than an 

interchangeable biological product 

justifies the negative formulary change 

to the brand name or reference product. 

Nevertheless, we do not want to 

establish too short a timeframe 

requirement to make the negative 

change to the brand name drug or 

reference product because it could 

increase the chance that Part D sponsors 

will miss the formulary update 

opportunity, resulting in more 

continued utilization of the brand name 

drug or reference product and less 

utilization of the corresponding drug or 

biosimilar biological product other than 

an interchangeable biological product 

than otherwise could be achieved. To 

strike a balance, we are proposing to 

codify our longstanding operational 

limitation of a 90-day timeframe for a 

Part D sponsor to remove a brand name 

drug from the formulary when a generic 

drug is added. Our experience suggests 

that this timeframe would provide Part 

D sponsors with sufficient time to 

implement the negative formulary 

change for a brand name drug or 

reference product after adding a 

corresponding drug or biosimilar 

biological product other than an 

interchangeable biological product, but 

still ensure the removal of the brand 

name drug or reference product is 

timely enough to help increase 

utilization of the corresponding drug or 

biosimilar biological product other than 

an interchangeable biological product. 

Accordingly, we believe negative 

formulary changes to the brand name 

drug or reference product should have 

to take effect within 90 days after a 

generic or other corresponding drug, or 

biosimilar biological product other than 

an interchangeable biological product, is 

added as specified to the formulary. 

To provide Part D sponsors with more 

flexibility, we propose to remove from 

paragraph (1) of the proposed definition 

of ‘‘maintenance change’’ in § 423.100 of 

the December 2022 proposed rule the 

requirement that the corresponding drug 

be added and the related drug be subject 

to negative formulary changes ‘‘at the 

same time.’’ Rather, we now propose to 

revise paragraph (1) to require Part D 

sponsors to make any negative 

formulary changes ‘‘within 90 days of’’ 

adding a corresponding drug. Similarly, 

the newly proposed paragraph (2) of the 

proposed definition of ‘‘maintenance 

change’’ in § 423.100, as discussed 

above, would require Part D sponsors to 

make negative formulary changes to a 

reference product ‘‘within 90 days of’’ 

adding a biosimilar biological product 

other than an interchangeable biological 

product. 

In this vein, we note that a commenter 

on the December 2022 proposed rule 

requested that we remove the 

requirement in the proposed 

§ 423.120(e)(2)(i) of the December 2022 

proposed rule (currently appearing at 

§ 423.120(b)(5)(iv)(A)) that Part D 

sponsors making immediate 

substitutions remove or make any other 

negative formulary changes to a related 

drug ‘‘at the same time’’ they add its 

corresponding drug. The commenter 

suggested that this requirement might 

discourage them from adding new 

corresponding drugs, which could be 

lower in cost than related drugs, as soon 

as possible because they often need 

more time to implement the changes 

with respect to the related drug. For 

instance, they suggested it takes time to 

evaluate new products; check their 

availability; communicate changes; 

update operations; and assess suitability 

for substitution among interchangeable 

biological products. We appreciate the 

comment and reiterate that we favor 

expeditious access for enrollees to Part 

D drugs that could be lower in cost. The 

purpose of the immediate substitutions 

policy is to encourage quick action with 

respect to immediately placing a 

corresponding drug on the formulary 

after it is released. 

Accordingly, with respect to the 

proposed § 423.120(e)(2)(i) in the 

December 2022 proposed rule, we now 

propose to remove the requirement that 

immediate substitutions occur ‘‘at the 

same time’’ and instead state that 

negative formulary changes may still 

qualify as immediate substitutions if 

made within 30 days of adding a 

corresponding drug to a formulary. As 

proposed in the December 2022 

proposed rule, for immediate 

substitutions, Part D sponsors would be 

required to submit such changes to 

CMS, in a form and manner specified by 

CMS, in their next required or 

scheduled formulary update. 

We note that we are proposing 

different windows of time in which Part 

D sponsors can make negative formulary 

changes to the related drug based on 

whether there is an immediate 

substitution (that is, within 30 days after 


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78522 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

79Regulations in 42 CFR part 422, subpart B, and 

part 423, subpart B, permit enrollees to enroll in a 

plan mid-year during their initial election period or 

special election periods. 

adding the corresponding drug) or a 

maintenance change (that is, within 90 

days after adding the corresponding 

drug). The different requirements reflect 

a distinction in the nature of the 

changes themselves. As noted earlier, 

the entire purpose of immediate 

substitutions is quick action, such that 

Part D sponsors can put a newer 

corresponding drug on the formulary 

and remove the related drug it is 

replacing as soon as possible. For that 

reason, we continue to encourage that 

immediate substitutions take place ‘‘at 

the same time,’’ but propose setting a 

30-day limit. To encourage this, Part D 

sponsors implementing immediate 

substitutions may provide notice to 

affected enrollees of the specific 

changes after they have taken effect. 

For the reasons discussed above, for 

other kinds of maintenance changes that 

are not immediate, we propose that we 

would approve only negative formulary 

changes to the related drug that take 

effect within 90 days after a 

corresponding drug is added to the 

formulary. 

We invite comment on these proposed 

changes, the reasons why Part D 

sponsors would need a period of time 

after adding a corresponding drug or 

biosimilar biological product other than 

an interchangeable biological product in 

which to take action, and any other 

appropriate window of time in which to 

permit maintenance changes or 

immediate substitutions to take place, 

including whether we should maintain 

a distinction between the two. 

(3) Miscellaneous Changes 

In re-examining our proposed 

definition of ‘‘maintenance change’’ in 

the December 2022 proposed rule at 

§ 423.100, we found a technical error, in 

that we did not specify in the 

introductory clause that the changes 

would apply with respect to ‘‘a covered 

Part D drug.’’ We hereby propose to 

make that correction in this proposed 

rule. 

We propose a technical change to our 

proposed definition of ‘‘corresponding 

drug’’ included in the December 2022 

proposed rule in § 423.100 to specify 

that the reference to ‘‘an unbranded 

biological product of a biological 

product’’ is intended to be a reference 

to ‘‘an unbranded biological product 

marketed under the same BLA as a 

brand name biological product.’’ 

3. Summary 

In conclusion, we are proposing the 

changes below to three sections of 

regulatory text originally proposed in 

the December 2022 proposed rule. We 

are currently not proposing updates to 

the other proposed regulatory text in the 

December 2022 proposed rule related to 

section III.Q., Changes to an Approved 

Formulary, which, as noted above, 

remains under consideration. 

• In § 423.4, to add a definition of 

‘‘biosimilar biological product;’’ 

• In § 423.4, to make technical 

corrections to the proposed definition of 

an ‘‘interchangeable biological 

product;’’ 

• In § 423.100, to revise the proposed 

definition of ‘‘maintenance change’’ as 

follows: to add an introductory clause 

noting its application to covered Part D 

drugs; to revise paragraph (1) to require 

changes ‘‘within 90 days of,’’ rather than 

‘‘at the same time as,’’ adding a 

corresponding drug; to add a new 

paragraph (2) to include substitution of 

biosimilar biological products other 

than interchangeable biological 

products as a type of maintenance 

change; and to renumber the remaining 

maintenance changes listed; 

• In § 423.100, to revise the proposed 

definition of ‘‘corresponding drug’’ to 

specify that the reference to ‘‘an 

unbranded biological product of a 

biological product’’ is intended to be a 

reference to ‘‘an unbranded biological 

product marketed under the same BLA 

as a brand name biological product;’’ 

and 

• In proposed § 423.120(e)(2)(i), to 

require changes ‘‘within 30 days of,’’ 

rather than ‘‘at the same time as,’’ 

adding a corresponding drug. 

G. Parallel Marketing and Enrollment 

Sanctions Following a Contract 

Termination (§§ 422.510(e) and 

423.509(f)) 

Sections 1857(c)(2) and 1860D– 

12(b)(3)(B) of the Act provide CMS with 

the ability to terminate MA (including 

MA–PD) and PDP contracts if we 

determine that a contract(s) has met any 

of the following thresholds: 

• Has failed substantially to carry out 

the contract. 

• Is carrying out the contract in a 

manner that is inconsistent with the 

efficient and effective administration of, 

respectively, Part C or Part D of Title 

XVIII of the Act (that is, the Medicare 

statute). 

• No longer substantially meets the 

applicable conditions of the applicable 

part of the statute. 

This termination authority is codified 

at 42 CFR 422.510(a)(1) through (3) and 

423.509(a)(1) through (3), respectively. 

In addition, section 1857(g)(3) of the Act 

(incorporated for Part D sponsors under 

section 1860D–12(b)(3)(F)) specifies that 

intermediate sanctions and civil money 

penalties (CMPs) can be imposed on the 

same grounds upon which a contract 

could be terminated (63 FR 34968 and 

70 FR 4193). CMS codified this 

authority at §§ 422.752(b) and 

423.752(b) with respect to intermediate 

sanctions, and §§ 422.752(c)(1)(i) and 

423.752(c)(1)(i) with respect to CMPs. 

If CMS terminates an MA organization 

or Part D sponsor contract(s) during the 

plan year but the termination is not 

effective until January 1 of the following 

year, the MA organization or Part D 

sponsor could potentially continue to 

market and enroll eligible beneficiaries 

(as described in part 422, subpart B, and 

part 423, subpart B) into plans under the 

terminating contract(s) unless CMS 

imposes separate marketing and 

enrollment sanctions on the terminating 

contract(s).79 A terminating contract 

that continues to market to and enroll 

eligible beneficiaries would cause 

confusion and disruption for 

beneficiaries who enroll in the period of 

time between when the termination 

action is taken and the January 1 

effective date of the termination. 

For these reasons, we propose to add 

paragraph (e) to § 422.510 and 

paragraph (f) to § 423.509 that, effective 

contract year 2025, marketing and 

enrollment sanctions will automatically 

take effect after a termination is 

imposed. At paragraph (e)(1) of 

§ 422.510 and paragraph (f)(1) of 

§ 423.509, we propose to state that the 

marketing and enrollment sanctions will 

go into effect 15 days after CMS issues 

a contract termination notice. This 

timeframe is consistent with the number 

of days CMS often designates as the 

effective date for sanctions after CMS 

issues a sanction notice. 

At paragraph (e)(2) of § 422.510 and 

paragraph (f)(2) of § 423.509, we 

propose that MA organizations and Part 

D sponsors would continue to be 

afforded the same appeals rights and 

procedures specific to contract 

terminations under subpart N of 42 CFR 

parts 422 and 423, however, there 

would not be a separate appeal for the 

sanction (in other words the appeal of 

the termination would include the 

associated marketing and enrollment 

sanctions). In addition, at paragraph 

(e)(3) of § 422.510 and paragraph (f)(3) 

of § 423.509 we propose that if an MA 

organization or Part D sponsor appeals 

the contract termination, the marketing 

and enrollment sanctions would not be 

stayed pending the appeal consistent 

with §§ 422.756(b)(3) and 423.756(b)(3). 

Finally, at paragraph (e)(4) of § 422.510 

and paragraph (f)(4) of § 423.509 we 


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Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78523 

80Espinoza, J. and Derrington, S. ‘‘How Should 

Clinicians Respond to Language Barriers that 

Exacerbate Health Inequity?’’, AMA Journal of 

Ethics (February 2021) E109. Retrieved from https:// 

journalofethics.ama-assn.org/sites/ 

journalofethics.ama-assn.org/files/2021-02/cscm3- 

2102.pdf; Karliner, L., Perez-Stable, and E., 

Gregorich, S. ‘‘Convenient Access to Professional 

Interpreters in the Hospital Decreases Readmission 

Rates and Estimated Hospital Expenditures for 

Patients with Limited English Proficiency’’, Med 

Care (March 2017) 199–206. Retrieved from https:// 

pubmed.ncbi.nlm.nih.gov/27579909/. 

81Wooksoo, K. and Keefe, R. ‘‘Barriers to 

Healthcare Among Asian Americans’’, Social Work 

in Public Health (2010) 286–295. Retrieved from 

https://www.tandfonline.com/doi/pdf/10.1080/ 

19371910903240704?needAccess=true. 

82U.S. Department of Health & Human Services, 

Agency for Healthcare Research & Quality. 

‘‘Executive Summary: Improving Patient Safety 

Systems for Patients with Limited English 

Proficiency’’, (September 2020). Retrieved from 

https://www.ahrq.gov/health-literacy/professionaltraining/lepguide/index.html. 

83Espinoza, J. and Derrington, S. ‘‘How Should 

Clinicians Respond to Language Barriers that 

Exacerbate Health Inequity?’’, AMA Journal of 

Ethics (February 2021) E110. Retrieved from https:// 

journalofethics.ama-assn.org/sites/ 

journalofethics.ama-assn.org/files/2021-02/cscm3- 

2102.pdf. 

84 Glenn Flores et al., Errors of Medical 

Interpretation and Their Potential Clinical 

Consequences: A Comparison of Professional 

Versus Ad Hoc Versus No Interpreters, 5 Annals of 

Emerg. Med. 545 (Nov. 1, 2012), https://

pubmed.ncbi.nlm.nih.gov/22424655/; Ali Labaf et 

al., The Effect of Language Barrier and NonProfessional Interpreters on the Accuracy of 

Patient-Physician Communication in Emergency 

Department, 3 Adv. J. Emerg. Med., June 6, 2019, 

at p. 4, https://www.ncbi.nlm.nih.gov/pmc/articles/ 

PMC6789075/pdf/AJEM-3-e38.pdf. 

85U.S. Department of Health & Human Services, 

Agency for Healthcare Research & Quality. 

‘‘Executive Summary: Improving Patient Safety 

Systems for Patients with Limited English 

Proficiency’’, (September 2020). Retrieved from 

https://www.ahrq.gov/health-literacy/professionaltraining/lepguide/exec-summary.html#what. 

86Lala Tanmoy Das et al., Addressing Barriers to 

Care for Patients with Limited English Proficiency 

During the COVID–19 Pandemic, Health Affairs 

Blog (July 29, 2020), https://www.healthaffairs.org/ 

do/10.1377/hblog20200724.76821/full/. 

87This proposal pertains only to the MLI 

requirements in §§ 422.2267(e)(31) and 

423.2267(e)(33), not §§ 422.2267 and 423.2267 

broadly. 

88Public Law 111–148. 

propose that the sanction would remain 

in effect until the effective date of the 

termination, or if the termination 

decision is overturned on appeal, until 

the final decision to overturn the 

termination is made by the hearing 

officer or Administrator. 

CMS rarely terminates MA 

organization and Part D sponsor 

contracts and, on average, contract 

terminations affect less than one MA 

organization or Part D sponsor a year. 

Therefore, we anticipate that this 

proposal would not result in additional 

costs or additional administrative 

burden for affected MA organizations 

and Part D sponsors. For example, an 

MA organization and Part D sponsor 

would not be required to submit a 

corrective action plan, and if appealed 

there would only be one appeal rather 

than multiple. MA organizations and 

Part D sponsors would continue to be 

required to comply with existing 

regulations that require public and 

beneficiary notice that their contract is 

being terminated under this proposal. 

H. Update to the Multi-Language Insert 

Regulation (§§ 422.2267 and 423.2267) 

Individuals with limited English 

proficiency (LEP) experience obstacles 

to accessing health care in the United 

States. Language barriers negatively 

affect the ability of patients with LEP to 

comprehend their diagnoses and 

understand medical instructions when 

they are delivered in English, and 

impact their comfort with postdischarge care regimens.80 For example, 

Hispanic/Latino individuals with LEP 

report worse access to care and receipt 

of fewer preventive services than 

Hispanic/Latino individuals who speak 

English proficiently. For Asian 

Americans who are not proficient in 

English, language barriers are one of the 

most significant challenges to accessing 

health care, including making an 

appointment, communicating with 

health care professionals, and gaining 

knowledge about an illness; this is even 

more pronounced among older Asian 

Americans, who are more likely to have 

limited English proficiency.81 Studies 

show that patients with LEP experience 

longer hospital stays—leading to a 

greater risk of line infections, surgical 

infections, falls, and pressure ulcers— 

when compared to English-speaking 

patients; because patients with LEP 

have greater difficulty understanding 

medical instructions when those 

instructions are given in English, they 

are at higher risk of surgical delays and 

readmissions.82 Although the use of 

qualified interpreters is effective in 

improving care for patients with LEP, 

some clinicians choose not to use them, 

fail to use them effectively, or rely 

instead on ad hoc interpreters—such as 

family members or untrained bilingual 

staff.83 However, in addition to posing 

legal and ethical concerns, ad hoc 

interpreters are more likely to make 

mistakes than professional 

interpreters.84 Also, clinicians with 

basic or intermediate non-English 

spoken language skills often attempt to 

communicate with the patient on their 

own without using an interpreter, 

increasing patient risk.85 These barriers 

contribute to disparities in health 

outcomes for individuals with LEP, 

which likely worsened during the 

COVID–19 pandemic.86

The multi-language insert (MLI) 

required at §§ 422.2267(e)(31) and 

423.2267(e)(33) is a standardized 

communications material that informs 

enrollees and prospective enrollees that 

interpreter services are available in 

Spanish, Chinese, Tagalog, French, 

Vietnamese, German, Korean, Russian, 

Arabic, Italian, Portuguese, French 

Creole, Polish, Hindi, and Japanese. 

These are the 15 most common nonEnglish languages in the United States. 

Additionally, §§ 422.2267(e)(31)(i) and 

423.2267(e)(33)(i) require plans to 

provide the MLI in any non-English 

language that is the primary language of 

at least five percent of the individuals 

in a plan benefit package (PBP) service 

area but is not already included on the 

MLI. These regulations also provide that 

a plan may opt to include the MLI in 

any additional languages that do not 

meet the five percent threshold, where 

it determines that including the 

language would be appropriate. The 

MLI states, ‘‘We have free interpreter 

services to answer any questions you 

may have about our health or drug plan. 

To get an interpreter, just call us at [1– 

xxx–xxx–xxxx]. Someone who speaks 

[language] can help you. This is a free 

service.’’ The issuance of the MLI is 

independent of the Medicare written 

translation requirements for any nonEnglish language that meets the five 

percent threshold, as currently required 

under §§ 422.2267(a)(2) and 

423.2267(a)(2), and the additional 

written translation requirements for 

fully integrated D–SNPs (FIDE SNPs) 

and highly integrated D–SNPs (HIDE 

SNPs) provided in §§ 422.2267(a)(4) and 

423.3367(a)(4).87 Additionally, we note 

that pursuant to CMS’s authority in 

section 1876(c)(3)(C) to regulate 

marketing and the authority in section 

1876(i)(3)(D) to specify new section 

1876 contract terms, we have also 

established in § 417.428 that most of the 

marketing and communication 

regulations in subpart V of part 422, 

including the MLI requirement in 

§ 422.2267(e)(31), also apply to section 

1876 cost plans. 

On May 18, 2016, the Office for Civil 

Rights (OCR) published a final rule (81 

FR 31375; hereinafter referenced to as 

the section 1557 final rule) 

implementing section 1557 of the 

Patient Protection and Affordable Care 

Act (ACA).88 Section 1557 of the ACA 

provides that an individual shall not be 

excluded from participation in, be 

denied the benefits of, or be subjected 

to discrimination on the grounds 

prohibited under Title VI of the Civil 

Rights Act of 1964, 42 U.S.C. 2000d et 


ddrumheller on DSK120RN23PROD with PROPOSALS2
78524 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

89Specifically, we highlight pages 1899–1900 and 

1926–1927 of the August 2022 proposed rule and 

87 FR 1899 through 1900 of the January 2022 

proposed rule. 

seq. (race, color, national origin), Title 

IX of the Education Amendments of 

1972, 20 U.S.C. 1681 et seq. (sex), the 

Age Discrimination Act of 1975, 42 

U.S.C. 6101 et seq. (age), or section 504 

of the Rehabilitation Act of 1973, 29 

U.S.C. 794 (disability), under any health 

program or activity, any part of which 

is receiving Federal financial assistance; 

any health program or activity 

administered by the Department; or any 

program or activity administered by any 

entity established under Title I of the 

Act. The 2016 regulations implementing 

section 1557 included the requirement 

that all covered entities include taglines 

with all ‘‘significant communications.’’ 

The sample tagline provided by the 

Department consisted of a sentence 

stating, in the 15 most common nonEnglish languages in a State or States, 

‘‘ATTENTION: If you speak [insert 

language], language assistance services, 

free of charge, are available to you. Call 

1–xxx–xxx–xxxx (TTY: 1–xxx–xxx– 

xxxx).’’ Because of the inherent 

duplication with the MLI, CMS issued 

an HPMS email on August 25, 2016, to 

revise the Medicare Marketing 

Guidelines (MMG) at that time to 

remove the then-applicable MLI 

requirements. 

On June 19, 2020, OCR published a 

second section 1557 final rule (2020 

OCR Rule) (85 FR 37160), which is 

currently in effect, that repealed the 

notice and tagline requirements, citing 

costs, confusion, and waste, but stated 

that covered entities are still required 

‘‘to provide taglines whenever such 

taglines are necessary to ensure 

meaningful access by LEP individuals to 

a covered program or activity.’’ In the 

February 2020 proposed rule (85 FR 

9002), we proposed to require plans to 

use a disclaimer tagline about the 

availability of non-English translations 

in all required materials. However, we 

did not finalize that proposal in the 

January 2021 final rule (86 FR 5864). We 

based this decision on our belief that 

future rulemaking regarding nonEnglish disclaimers, if appropriate, 

would be best addressed by OCR, as 

those requirements would be HHS-wide 

instead of limited to CMS. We also 

stated that deferring to OCR’s oversight 

and management of any requirements 

related to non-English disclaimers is in 

the best interest of the Medicare 

program (86 FR 5995). 

It is important to note that none of the 

actions impacting the various 

notifications of interpreter services 

changed the requirement that MA 

organizations, Part D sponsors, or cost 

plans must provide these services under 

applicable law. Plans have long been 

required to provide interpreters when 

necessary to ensure meaningful access 

to individuals with LEP, consistent with 

existing civil rights laws. In 

implementing and carrying out the Part 

C and D programs under sections 

1851(h), 1852(c), 1860–1(b)(1)(B)(vi), 

1860D–4(a), and 1860D–4(l) of the Act, 

CMS considers the materials required 

under §§ 422.2267(e) and 423.2267(e) to 

be vital to the beneficiary decision 

making process; ensuring beneficiaries 

with LEP are aware of and are able to 

access interpreter services provides a 

clear path for this portion of the 

population to properly understand and 

access their benefits. For a more 

detailed discussion of previous 

rulemaking related to section 1557, the 

MLI, and non-English translation and 

interpreter requirements, we direct 

readers to the August 4, 2022 HHS 

notice of proposed rulemaking regarding 

section 1557 of the Affordable Care Act 

(87 FR 47853 through 47856) 

(hereinafter referred to as the August 

2022 proposed rule) and the January 

2022 proposed rule (87 FR 1899 through 

1900).89

In the Medicare Program; Contract 

Year 2023 Policy and Technical 

Changes to the Medicare Advantage and 

Medicare Prescription Drug Benefit 

Programs; Policy and Regulatory 

Revisions in Response to the COVID–19 

Public Health Emergency; Additional 

Policy and Regulatory Revisions in 

Response to the COVID–19 Public 

Health Emergency final rule (87 FR 

27704) (hereafter referred to as the May 

2022 final rule), we reinstituted the 

requirement to use the MLI at 

§§ 422.2267(e)(31) and 423.2267(e)(33). 

We noted that we gained additional 

insight regarding the void created by the 

lack of any notification requirement 

associated with the availability of 

interpreter services for Medicare 

beneficiaries (87 CFR 27821). We stated 

that we consider the materials required 

under §§ 422.2267(e) and 423.2267(e) to 

be vital to the beneficiary decisionmaking process. We also noted that we 

reviewed complaint tracking module 

(CTM) cases in the Health Plan 

Management System (HPMS) related to 

‘‘language’’ and found a pattern of 

beneficiary confusion stemming from 

not fully understanding materials based 

on a language barrier. We noted that 

solely relying on the requirements 

delineated in the 2020 OCR Rule for 

covered entities to convey the 

availability of interpreter services is 

insufficient for the MA, cost plan, and 

Part D programs and is not in the best 

interest of Medicare beneficiaries who 

are evaluating whether to receive their 

Medicare benefits through these plans 

and who are enrolled in these plans. We 

stated that we believed that informing 

Medicare beneficiaries that interpreter 

services are available is essential to 

realizing the value of our regulatory 

requirements for interpreter services. 

On August 4, 2022, OCR published a 

proposed rule (87 FR 47824) that 

proposed to require covered entities to 

notify the public of the availability of 

language assistance services and 

auxiliary aids and services for their 

health programs and activities using a 

‘‘Notice of Availability.’’ Proposed 

§ 92.11(b) would require the Notice of 

Availability to be provided in English 

and at least in the 15 most common 

languages spoken by individuals with 

LEP in the relevant State or States, and 

in alternate formats for individuals with 

disabilities who request auxiliary aids 

and services to ensure effective 

communications. If finalized, these 

proposed provisions would result in 

misalignment with the MLI requirement 

under §§ 422.2267(e)(31) and 

423.2267(e)(33) which require that 

notice be provided in the 15 most 

common non-English languages in the 

United States. At the time this proposed 

rule is published, OCR has not issued a 

final rule on its August 2022 proposed 

rule, and the 2020 OCR Rule remains in 

effect. 

In addition, per § 438.10(d)(2), States 

must require managed care 

organizations (MCOs), prepaid inpatient 

health plans (PIHPs), prepaid 

ambulatory health plans (PAHPs), and 

primary care case management 

programs to include taglines in written 

materials that are critical to obtaining 

services for potential enrollees in the 

prevalent non-English languages in the 

State explaining the availability of oral 

interpretation to understand the 

information provided, information on 

how to request auxiliary aids and 

services, and the toll-free telephone 

number of the entity providing choice 

counseling services in the State. Several 

States that use integrated Medicare and 

Medicaid materials for D–SNPs and 

Medicare-Medicaid Plans have 

contacted CMS and requested that we 

change the MLI to be based on the 15 

most common languages in the State 

rather than the 15 most common 

languages nationally because the most 

common languages in the State are often 

not the same as the most common 15 

languages nationally. For example, 

while French Creole is included in the 

current MLI list for the most common 

languages nationally, it is not a common 


ddrumheller on DSK120RN23PROD with PROPOSALS2
Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78525 

90We expect the 15 most common languages for 

a given State to include any language required by 

the Medicaid program at § 438.10(d)(2). Therefore, 

our proposed rule would reduce burden on fully 

integrated dual eligible special needs plans and 

highly integrated dual eligible special needs plans, 

as defined at § 422.2, and applicable integrated 

plans, as defined at § 422.561, to comply with 

regulations at §§ 422.2267(a)(4) and 423.2267(a)(4). 

91https://www2.census.gov/library/data/tables/ 

2008/demo/language-use/2009-2013-acs-langtables-nation.xls. 

language in Minnesota. In Minnesota, 

Hmong and Somali, which are not 

included in the MLI, are two of the most 

prevalent languages. In fact, Minnesota 

informed CMS that only seven of the 

languages on the national list were 

included in their list of the 15 most 

common languages in their State. 

As a result of this conflict between the 

MLI requirements at §§ 422.2267(e)(31) 

and 423.2267(e)(33) and the Medicaid 

requirement at § 438.10(d)(2), any 

applicable integrated plans (AIPs), as 

defined at § 422.561, that provide 

integrated Medicare and Medicaid 

materials for enrollees must currently 

include the MLI in the 15 most common 

languages nationally as well as the 

Medicaid tagline in the prevalent nonEnglish languages in the State if they 

want to comply with both Medicare and 

Medicaid regulatory requirements. 

Specifically, these plans that provide 

integrated materials must comply with 

the MLI requirements at 

§§ 422.2267(e)(31) and 423.2267(e)(33) 

and the Medicaid requirement at 

§ 438.10(d)(2) to include taglines in 

written materials that are critical to 

obtaining services for potential enrollees 

in the prevalent non-English languages 

in the State. In the enrollee materials, 

this can result in a very long multi-page 

list of statements noting the availability 

of translations services in many 

languages. This lengthy list can be a 

distraction from the main information 

conveyed in the material. As discussed 

in greater detail below, we are 

proposing to update §§ 422.2267(e)(31) 

and 423.2267(e)(33) to instead require 

that notice of availability of language 

assistance services and auxiliary aids 

and services be provided in the 15 most 

common languages in a State; we expect 

that this proposed policy would better 

align with the Medicaid translation 

requirements at § 438.10(d)(2).90

We believe rulemaking regarding a 

non-English notice of the availability of 

language assistance services and 

auxiliary aids and services is needed to 

more closely reflect the actual languages 

spoken in the service area. We also 

believe it is in the best interest of 

enrollees for the requirements to align 

with the Medicaid translation 

requirements because it will allow D– 

SNPs that are AIPs to provide a more 

applicable, concise Notice of 

Availability to enrollees that does not 

distract from the main purpose of the 

document. 

Noting that while OCR has yet to 

finalize the Notice of Availability policy 

described in its August 2022 proposed 

rule, and thus that OCR’s proposed 

policy could be subject to change or not 

be finalized, alignment of Medicare and 

OCR rules would help to prevent 

confusion among MA organizations, 

Part D sponsors, and cost plans 

regarding which requirements they must 

comply with. Should the OCR final rule 

differ from the original August 2022 

proposed rule, we will consider 

modifying our final rule to align with 

OCR’s final rule. 

Therefore, we propose to amend 

§§ 422.2267(e)(31) and 423.2267(e)(33). 

First, we propose to replace references 

to the MLI with references to a Notice 

of Availability. We propose to modify 

the language to reflect CMS’s proposal 

that this notice be a model 

communication material rather than a 

standardized communication material 

and thus that CMS would no longer 

specify the exact text that must be used 

in the required notice. We propose to 

change paragraphs (e)(31) and (33) to 

require MA organizations and Part D 

sponsors to provide enrollees a notice of 

availability of language assistance 

services and auxiliary aids and services 

that, at a minimum, states that MA 

organizations and Part D sponsors 

provide language assistance services 

and appropriate auxiliary aids and 

services free of charge. We are 

proposing, in new paragraphs (e)(31)(i) 

and (e)(33)(i), that the Notice of 

Availability must be provided in 

English and at least the 15 languages 

most commonly spoken by individuals 

with limited English proficiency of the 

relevant State and must be provided in 

alternate formats for individuals with 

disabilities who require auxiliary aids 

and services to ensure effective 

communication. This proposed Statespecific standard would ensure that a 

significant proportion of each State’s 

particular LEP population receives key 

information in the appropriate 

languages. The U.S. Census Bureau’s 

ACS 2009–2013 multi-year data show 

that the top languages spoken in each 

State can vary significantly.91 Statespecific language translations provide 

for flexibility to maximize access to care 

for individuals with LEP. This updated 

notice must also include a statement 

regarding the availability of appropriate 

auxiliary aids and services to reduce 

barriers to access for individuals with 

disabilities. 

We believe this proposal would make 

it easier for individuals to understand 

the full scope of available Medicare 

benefits (as well as Medicaid benefits 

available through the D–SNPs, where 

applicable), increasing their ability to 

make informed health care decisions, 

and promote a more equitable health 

care system by increasing the likelihood 

that MA enrollees have access to 

information and necessary health care. 

As an additional benefit, our proposed 

changes would mitigate the risk that 

§§ 422.2267(e)(31) and 423.2267(e)(33) 

could conflict with § 438.10(d)(2) and 

the forthcoming OCR final rule, if 

finalized, requiring applicable Medicare 

plans to comply with two, disparate sets 

of requirements. Such an outcome adds 

undue burden on plans. Further, 

requiring MA organizations and Part D 

sponsors to provide multiple sets of 

translated statements accompanying 

enrollee materials could lead to enrollee 

confusion and detract from the enrollee 

material message. Notwithstanding 

OCR’s final rule policy, we believe our 

proposed changes are appropriate given 

the benefits of a non-English notice of 

availability of language assistance 

services and auxiliary aids and service 

more closely reflecting the actual 

languages spoken in the service area and 

alignment with the Medicaid translation 

requirements. 

Additionally, we propose in 

§§ 422.2267(e)(31)(ii) and 

423.2267(e)(33)(ii) that if there are 

additional languages in a particular 

service area that meet the 5-percent 

service area threshold, described in 

paragraph §§ 422.2267(a)(2) and 

423.2267(a)(2), beyond the languages 

described in §§ 422.2267(e)(31)(i) and 

423.2267(e)(33)(i), the Notice of 

Availability must also be translated into 

those languages, similar to the current 

MLI requirements at 

§§ 422.2267(e)(31)(i) and 

423.2267(e)(33)(i). While 

§§ 422.2267(a)(2) and 423.2267(a)(2) 

apply to the Notice of Availability since 

it is a required material under 

§§ 422.2267(e) and 423.2267(e), we 

wanted to clarify this in the regulation 

text. MA organizations and Part D 

sponsors may also opt to translate the 

Notice of Availability in any additional 

languages that do not meet the five 

percent service area threshold at 

§§ 422.2267(a)(2) and 423.2267(a)(2), 

where the MA organization or Part D 

sponsor determines that such inclusion 

would be appropriate, which is also 

included in the current MLI 

requirements at §§ 422.2267(e)(31)(i) 

and 423.2267(e)(33)(i). It is possible that 


ddrumheller on DSK120RN23PROD with PROPOSALS2
78526 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

92We released the contract year 2024 version of 

this HPMS memorandum titled, ‘‘Corrected 

Contract Year 2024 Translated Model Materials 

Requirements and Language Data Analysis’’ on 

September 25, 2023. This memorandum can be 

retrieved at: https://www.cms.gov/about-cms/ 

information-systems/hpms/hpms-memos-archiveweekly/hpms-memos-wk-4-september-18-22. 93Found in HPMS as described in the September 

25, 2023 HPMS memo, ‘‘Corrected Contract Year 

2024 Translated Model Materials Requirements and 

Language Data Analysis.’’ This memo can be 

retrieved at https://www.cms.gov/about-cms/ 

information-systems/hpms/hpms-memos-archiveweekly/hpms-memos-wk-4-september-18-22. 

94See System of Records Notices for the CMS 

Encounter Data System (EDS), System No. 09–70– 

0506, published June 17, 2014 (79 FR 34539), as 

amended at February 14, 2018 (83 FR 6591); and 

for the CMS Risk Adjustment Suite of Systems 

(RASS), System No. 09–70–0508, published August 

17, 2015 (80 FR 49237), as amended at February 14, 

2018 (83 FR 6591). 

there may be a subpopulation in the 

plan benefit package service area that 

uses a language that does not fall within 

the top 15 languages or meet the five 

percent service area of a plan benefit 

package threshold that the plan 

determines can benefit by receiving the 

notice. We again note that pursuant to 

CMS’s authority in section 1876(c)(3)(C) 

to regulate marketing and the authority 

in section 1876(i)(3)(D) to specify new 

section 1876 contract terms, and as 

established in § 417.428, this proposal 

would also apply to section 1876 cost 

plans. 

To assist plans with fulfilling their 

requirements under §§ 422.2267(a)(2) 

and 423.2267(a)(2) to translate required 

materials into any non-English language 

that is the primary language of at least 

5 percent of the population of a plan 

service area, since 2009 CMS has 

provided plans with a list of all 

languages that are spoken by five 

percent or more of the population for 

every county in the U.S. Each fall, we 

release an HPMS memorandum 

announcing that MA organizations and 

Part D sponsors can access this list in 

the HPMS marketing review module.92

However, plans can also use Census 

Bureau ACS data to determine the top 

languages spoken in a given State or 

service area. The September 2023 

Medicare Part C & D Language Data 

Technical Notes 93 outlines our 

methodology for calculating the 

percentage of the population in a plan’s 

service area speaking a language other 

than English and provides plans with 

instructions to make these calculations 

on their own. 

I. Expanding Permissible Data Use and 

Data Disclosure for MA Encounter Data 

(§ 422.310) 

Section 1853(a) of the Act requires 

CMS to risk-adjust payments made to 

Medicare Advantage (MA) 

organizations. In order to carry out risk 

adjustment, section 1853(a)(3)(B) of the 

Act requires submission of data by MA 

organizations regarding the services 

provided to enrollees and other 

information the Secretary deems 

necessary. The implementing regulation 

at § 422.310(b) requires that MA 

organizations submit to CMS ‘‘the data 

necessary to characterize the context 

and purposes of each item and service 

provided to a Medicare enrollee by a 

provider, supplier, physician, or other 

practitioner.’’ Currently, § 422.310(d)(1) 

provides that MA organizations submit 

risk adjustment data equivalent to 

Medicare fee-for-service (FFS) data to 

CMS as specified by CMS. MA 

encounter data, which are 

comprehensive data equivalent to 

Medicare FFS data, are risk adjustment 

data.94

Section 1106(a)(1) of the Act 

authorizes the Secretary to adopt 

regulations governing release of 

information gathered in the course of 

administering programs under the Act. 

In addition, section 1856(b) of the Act 

authorizes CMS to adopt standards to 

carry out the MA statute, and section 

1857(e)(1) of the Act authorizes CMS to 

add contract terms that are not 

inconsistent with the Part C statute and 

are necessary and appropriate for the 

program. Currently, § 422.310(f)(1) 

establishes permissible CMS uses of MA 

encounter data (referred to as ‘‘risk 

adjustment data’’ in the regulation), 

while § 422.310(f)(2) and (3) establish 

rules for CMS release of data. Prior to 

2008, § 422.310(f) provided for CMS to 

use MA risk adjustment data to risk 

adjust MA payments and, except for any 

medical record data also collected under 

§ 422.310, for other purposes. Over time, 

we subsequently refined the regulatory 

language describing the scope of 

permissible uses and releases of the MA 

risk adjustment data, including MA 

encounter data, to (i) risk adjusting MA 

payments, (ii) updating risk adjustment 

models, (iii) calculating Medicare 

disproportionate share hospital 

percentages, (iv) conducting quality 

review and improvement activities, (v) 

for Medicare coverage purposes, (vi) 

conducting evaluations and other 

analysis to support the Medicare 

program (including demonstrations) and 

to support public health initiatives and 

other health care-related purposes, (vii) 

for activities to support administration 

of the Medicare program, (viii) for 

activities to support program integrity, 

and (ix) for purposes authorized by 

other applicable laws (70 FR 4588; 73 

FR 48650 through 48654; 79 FR 50325 

through 50334). 

Section 422.310(f)(2) permits the 

release of MA encounter data to other 

HHS agencies, other Federal executive 

branch agencies, States, and external 

entities, while § 422.310(f)(3) of our 

current regulation specifies 

circumstances under which we may 

release MA encounter data for the 

purposes described in § 422.310(f)(1). 

Currently, we may release the data only 

after risk adjustment reconciliation for 

the applicable payment year has been 

completed or under certain emergency 

preparedness or extraordinary 

circumstances. We note that we 

included a proposal to publicly report 

aggregated counts of procedures 

performed by providers, based on MA 

encounter data, before risk adjustment 

reconciliation is complete in the 

Medicare and Medicaid Programs in the 

CY 2024 Payment Policies Under the 

Physician Fee Schedule and Other 

Changes to Part B Payment and 

Coverage Policies; Medicare Shared 

Savings Program Requirements; 

Medicare Advantage; Medicare and 

Medicaid Provider and Supplier 

Enrollment Policies; and Basic Health 

Program proposed rule (hereafter 

referred to as the August 2023 proposed 

rule; 88 FR 52262). 

Here, we are proposing to allow MA 

encounter data to be used to support the 

Medicaid program for certain purposes 

already specified for use to support the 

Medicare program in § 422.310(f)(1)(vi) 

and (vii). Under our proposal, MA risk 

adjustment data could be used for 

supporting either program separately or 

in conjunction. In addition, we are 

proposing to allow release of MA 

encounter data to State Medicaid 

agencies (States) in advance of the 

completion of risk adjustment 

reconciliation for the specific purpose of 

care coordination for individuals who 

are dually eligible for Medicare and 

Medicaid, also known as dually eligible 

individuals. These proposals related to 

disclosure of MA encounter data are 

focused on expanding allowable 

disclosures of these data to support not 

only the Medicare program or MedicareMedicaid demonstrations, but also the 

Medicaid program in the interest of 

improving care for individuals who are 

eligible for Medicaid. 

We believe disclosure for the purpose 

of improving States’ ability to 

understand and improve care provided 

to dually eligible individuals is 

appropriate and consistent with our 

intention in prior rulemaking. We 

clarified that States may access and use 

MA encounter data while ‘‘in the 

administration of Medicare-Medicaid 

demonstrations’’ in the Medicare 

Program; Hospital Inpatient Prospective 


ddrumheller on DSK120RN23PROD with PROPOSALS2
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95 2023 Medicare Trustees Report https://

www.cms.gov/oact/tr. 

96https://www.cms.gov/files/document/ 

managedcareenrollmenttrendsdatabrief2012- 

2021.pdf. 

Payment Systems for Acute Care 

Hospitals and the Long-Term Care 

Hospital Prospective Payment System 

and Fiscal Year 2015 Rates; Quality 

Reporting Requirements for Specific 

Providers; Reasonable Compensation 

Equivalents for Physician Services in 

Excluded Hospitals and Certain 

Teaching Hospitals; Provider 

Administrative Appeals and Judicial 

Review; Enforcement Provisions for 

Organ Transplant Centers; and 

Electronic Health Record (EHR) 

Incentive Program final rule (hereafter 

referred to as the August 2014 final rule; 

79 FR 50325). Additionally, current 

regulation text at § 422.310(f)(1)(vi) 

permits CMS to release MA encounter 

data to third parties, including States, to 

‘‘conduct evaluations and other analysis 

to support the Medicare program 

(including demonstrations).’’ This 

proposal would expand certain 

allowable use and disclosures of MA 

encounter data to support the Medicaid 

program, which would thereby enable 

State access to comprehensive data for 

all dually eligible individuals in the 

State regardless of their enrollment in a 

demonstration, dual eligible special 

needs plan (D–SNP), or other MA plan. 

Our proposal to further expand MA 

encounter data sharing to include 

support for the Medicaid program 

would also be consistent with the goals 

of the Federal Coordinated Health Care 

Office, as established in statute. Section 

2602 of the Patient Protection and 

Affordable Care Act of 2010 (Pub. L. 

111–148) (Affordable Care Act) 

established the office within CMS to 

better integrate benefits and improve 

coordination for dually eligible 

individuals, including specific goals 

and responsibilities such as: 

• Providing dually eligible 

individuals full access to the benefits to 

which such individuals are entitled 

under the Medicare and Medicaid 

programs. 

• Improving the quality of health care 

and long-term services for dually 

eligible individuals. 

• Improving care continuity and 

ensuring safe and effective care 

transitions for dually eligible 

individuals. 

• Improving the quality of 

performance of providers of services 

and suppliers under the Medicare and 

Medicaid programs. 

• Supporting State efforts to 

coordinate and align acute care and 

long-term care services for dually 

eligible individuals with other items 

and services furnished under the 

Medicare program. 

MA enrollment has grown to 

approximately half of all Medicare 

beneficiaries; a trend also seen in the 

enrollment of dually eligible 

individuals. For example, 51 percent of 

all dually eligible individuals were 

enrolled in an MA plan in 2021 (up 

from 12 percent in December 2006).95 96

Such individuals experience the health 

care system and incur health outcomes 

as individuals regardless of which 

health care program pays for the service. 

But currently, the States’ ability to 

obtain MA encounter data for program 

analysis and evaluations or program 

administration for dually eligible 

individuals enrolled in an MA plan is 

limited to support of a MedicareMedicaid demonstration. Our current 

regulation text does not specify that we 

may make MA encounter data available 

to States for Medicaid program 

administration, or to conduct 

evaluations and other analyses for the 

Medicaid program, with the exception 

of those evaluations and analyses used 

to support demonstrations. Therefore, 

previous rulemaking limits 

opportunities for States to effectively 

perform functions such as coordination 

of care, quality measure design, and 

program evaluation and analysis by 

allowing them access to MA encounter 

data for these activities only for those 

dually eligible individuals enrolled in 

Medicare-Medicaid demonstrations. 

We are proposing changes to 

§ 422.310(f) to improve access for States 

to MA encounter data, including making 

a specific exception to the timing of 

sharing MA encounter data. We do not 

intend for our proposals to impact the 

terms and conditions governing CMS 

release of MA risk adjustment data as 

described in § 422.310(f)(2), in 

accordance with applicable Federal 

laws and CMS data sharing procedures. 

As discussed in the August 2014 final 

rule, CMS data sharing procedures 

require each recipient of data from CMS 

to sign and maintain a CMS data sharing 

agreement, ‘‘which addresses privacy 

and security for the data CMS discloses’’ 

and ‘‘contains provisions regarding 

access to and storage of CMS data to 

ensure that beneficiary identifiable 

information is stored in a secure system 

and handled according to CMS’s 

security policies,’’ which encompasses 

the limitations for additional disclosure 

of CMS data (79 FR 50333). Such 

provisions would similarly apply to 

States that receive MA encounter data 

under the proposed amendments to 

§ 422.310(f) here. 

As stated in the August 2014 final 

rule, the data described in paragraphs 

(a) through (d) would include those 

elements that constitute an encounter 

data record, including contract, plan, 

and provider identifiers, with the 

exception of disaggregated payment data 

(79 FR 50325). In accordance with 

§ 422.310(f)(2)(iv), we aggregate 

payment data to protect commercially 

sensitive information. 

1. Expanding and Clarifying the 

Programs for Which MA Encounter Data 

May Be Used for Certain Allowable 

Purposes 

As we stated in the Medicare 

Program; Hospital Inpatient Prospective 

Payment Systems for Acute Care 

Hospitals and the Long-Term Care 

Hospital Prospective Payment System 

and Fiscal Year 2015 Rates; Quality 

Reporting Requirements for Specific 

Providers; Reasonable Compensation 

Equivalents for Physician Services in 

Excluded Teaching Hospitals; Provider 

Administrative Appeals and Judicial 

Review; Enforcement Provisions for 

Organ Transplant Centers; and 

Electronic Health Record (EHR) 

Incentive Program proposed rule 

(hereafter referred to as the May 2014 

proposed rule; 79 FR 27978), using MA 

encounter data enables us, our 

contractors, and external entities to 

support Medicare program evaluations, 

demonstration designs, and effective 

and efficient operational management of 

the Medicare program, encourages 

research into better ways to provide 

health care, and increases transparency 

in the administration of the Medicare 

program (79 FR 28281 through 28282). 

However, because States lack access to 

MA encounter data, States’ ability to 

conduct activities for dually eligible 

individuals enrolled in MA plans is 

limited. As Medicare is the primary 

payer for dually eligible individuals, 

States generally lack comprehensive 

data on care provided to dually eligible 

individuals enrolled in MA. Over the 

years, various States have requested that 

CMS share MA encounter data for 

dually eligible individuals to better 

coordinate care, conduct quality 

improvement activities, support 

program design, conduct evaluations, 

and improve efficiency in the 

administration of the Medicaid program. 

Our current regulation text at 

§ 422.310(f)(1)(vi) (evaluations and 

analysis to support the Medicare 

program) and (vii) (activities to support 

administration of the program) specifies 

that for these purposes, the encounter 

data must be used for the Medicare 

program. Therefore, though 

§ 422.310(f)(2) permits CMS to release 


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MA encounter data to States for the 

purposes listed in paragraph (f)(1), 

§ 422.310(f)(1)(vi) and (vii) do not 

clearly permit CMS to release MA 

encounter data to States to support 

Medicaid program evaluations and 

analysis or to support administration of 

the Medicaid program. 

We are proposing to add ‘‘and 

Medicaid program’’ to the current MA 

encounter data use purposes codified at 

§ 422.310(f)(1)(vi) and (vii). These 

additions would enable CMS to use the 

data and release it (in accordance with 

§ 422.310(f)(2) and (3)) for the purposes 

of evaluation and analysis and program 

administration for Medicare, Medicaid, 

or Medicare and Medicaid combined 

purposes. We believe that our release of 

MA encounter data for these data use 

purposes that support the Medicare and 

Medicaid programs would generally be 

to the States and would support our 

responsibility to improve the quality of 

health care and long-term services for 

dually eligible individuals; improve 

care continuity, ensuring safe and 

effective care transitions for dually 

eligible individuals; improve the quality 

of performance of providers of services 

and suppliers under the Medicare and 

Medicaid programs for dually eligible 

individuals; and support State efforts to 

coordinate and align acute care and 

long-term care services for dually 

eligible individuals with other items 

and services furnished under the 

Medicare program. 

As stated above, CMS data sharing 

procedures apply to the release of MA 

encounter data in accordance with 

§ 422.310(f)(2) and contain provisions 

regarding access to and storage of CMS 

data to ensure that beneficiary 

identifiable information is protected. 

We make other data available to external 

entities, including States, in accordance 

with CMS data sharing procedures and 

Federal laws, including but not limited 

to the Privacy Act of 1974. We review 

data requests for appropriate use 

justifications, including updated or 

amended use justifications for existing 

data requests. We employ data sharing 

agreements, such as a Data Use 

Agreement and Information Exchange 

Agreement, that limit external entities to 

CMS-approved data uses and disclosure 

of CMS data. For example, States that 

request data from CMS for care 

coordination and program integrity 

initiatives may disclose the data to State 

contractors, vendors, or other business 

associates. In accordance with CMS data 

sharing agreements, these State 

contractors, vendors, or other business 

associates must also follow the terms 

and conditions for use of the CMS data, 

including limiting use of the CMSprovided data only for approved 

purposes. This would mean that, under 

this proposal, a State receiving MA 

encounter data for care coordination 

may disclose MA encounter data to 

Medicaid managed care plans to 

coordinate services for enrolled dually 

eligible individuals. Comments 

submitted on the August 2014 final rule 

cited concerns that access to MA 

encounter data by competitors of the 

various MA organizations that are 

required to submit data could permit a 

competitor to gain an advantage by 

trending cost and utilization patterns 

over a number of years. Given that 

§ 422.310(f)(2)(iv) provides for 

aggregation of dollar amounts reported 

for the associated encounter to protect 

commercially sensitive data and that 

any release of MA encounter data to 

States would comply with applicable 

statutes, regulations, and processes 

including those described above, we 

believe that concern around potential 

competitive advantage is mitigated if the 

risk exists at all. As stated in the August 

2014 final rule, we believe that CMS 

data sharing procedures and review of 

use justifications ‘‘strikes an appropriate 

balance between the significant benefits 

of furthering knowledge’’ and concerns 

regarding the release of risk adjustment 

data, including for beneficiary privacy 

or commercially sensitive information 

of MA plans (79 FR 50328). Consistent 

with what we stated in the August 2014 

final rule, CMS data sharing agreements 

have enforcement mechanisms, and data 

requestors acknowledge these 

mechanisms. For example, penalties 

under section 1106(a) of the Social 

Security Act [42 U.S.C. 1306(a)], 

including possible fines or 

imprisonment, and criminal penalties 

under the Privacy Act [5 U.S.C. 

552a(i)(3)] may apply, as well as 

criminal penalties may be imposed 

under 18 U.S.C. 641 (79 FR 50333). 

Requestors of CMS data, such as States, 

are responsible for abiding by the law, 

policies, and restrictions of the data 

sharing agreements—which extends to 

any downstream disclosures of the data 

to State contractors, vendors, or other 

business associates—as condition of 

receiving the data. We intend to only 

approve requests for MA encounter data 

that have clear written data use 

justifications and identify any 

downstream disclosure—such as to 

State contractors, vendors, or other 

business associates—for each requested 

purpose. We have not identified any 

issues regarding competitive harm or 

disadvantage in our current data sharing 

programs. 

Under this proposal, we would be 

able to use MA encounter data and 

disclose it—subject to the other 

limitations and protections specified in 

§ 422.310(f) and other applicable laws 

and regulations—to States to perform 

evaluations and analysis, which would 

include program planning for dually 

eligible individuals. For example, access 

to MA encounter data could support 

States’ analysis of geographic trends to 

create targeted community outreach and 

education, including identification of 

geographic areas with higher rates of 

dementia, diabetes, or emergency room 

visit overutilization; and evaluation of 

current Medicaid initiatives, including 

tracking efficacy of opioid overuse and 

misuse programs by monitoring service 

utilization for those with opioid 

dependency, evaluating appropriate and 

inappropriate use of antibiotic and 

psychotropic medications, and 

analyzing deaths among individuals 

with opioid use disorder. Currently, 

States generally only receive Medicare 

FFS data from CMS under current 

authorities, which results in an 

incomplete assessment of the dually 

eligible population. Under this 

proposal, States could request MA 

encounter data for all of the dually 

eligible enrollees they serve and include 

this growing portion of the dually 

eligible population in their data analysis 

and efforts to improve outcomes for 

low-income older adults and people 

with disabilities who are enrolled in the 

Medicaid program. 

We are taking this opportunity to 

make a clarification related to the 

existing program administration 

purpose, as specified in 

§ 422.310(f)(1)(vii). In the August 2014 

final rule, we stated that, in addition to 

use of these data for review of bid 

validity and MLR, we expected there 

would be additional potential uses for 

these data as part of the program 

administration purpose, such as the 

development of quality measures (79 FR 

50326). Consistent with our expectation 

at that time, we are clarifying here that 

care coordination would be an 

allowable use for these data as part of 

the purpose currently codified at 

§ 422.310(f)(1)(vii)—for activities to 

support the administration of the 

Medicare program—which includes 

activities that are not within the scope 

of the other permitted uses defined at 

§ 422.310(f)(1). Similar to quality 

measure development, a use we 

explicitly named, care coordination is 

critical to ensuring that individuals 

receive effective and efficient care, 

especially when services may be 

covered under multiple health care 


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97 ‘‘Deadline for Submitting Risk Adjustment Data 

for Use in Risk Score Calculation Runs for Payment 

Years 2021, 2022, 2023, and 2024’’ HPMS memo. 

https://www.cms.gov/files/document/

py20202021202220232024paymentrunnotice

508g.pdf. 

98https://resdac.org/cms-news/2021-preliminarymedicare-encounter-data-now-available. 

programs, as is the case for dually 

eligible individuals who are enrolled in 

Medicaid and an MA plan. We believe 

use and release of MA encounter data to 

States to support administering the 

Medicaid program, including to 

coordinate care and improve quality of 

care for Medicaid-covered individuals, 

is appropriate. For example, in 

administering the Medicaid program, a 

State may need MA encounter data to 

coordinate care for dually eligible 

individuals, which may include 

identification of individuals at high risk 

of institutional placement or other 

undesirable outcomes based on past 

service utilization; coordination of 

services from the MA plan’s coverage of 

an inpatient stay to Medicaid coverage 

of subsequent home and communitybased services; coordination of 

Medicaid-covered services in a skilled 

nursing facility for a dually eligible 

individual after reaching the limits of 

the individual’s coverage through the 

MA plan; monitoring nursing facility 

quality of care, including through 

tracking rates of hospitalization and 

emergency room visits; and 

coordination of physical health services 

with behavioral health services, where 

Medicaid coverage differs from the MA 

plan’s coverage. 

We welcome public comment on this 

proposal. 

2. Adding an Additional Condition 

Under Which MA Encounter Data May 

Be Released Prior to Reconciliation 

Section 422.310(f)(3) describes the 

circumstances under which we may 

release MA encounter data. Specifically, 

our current regulation provides that MA 

encounter data will not become 

available for release unless the risk 

adjustment reconciliation for the 

applicable payment year has been 

completed or under certain emergency 

preparedness or extraordinary 

circumstances. Section 422.310(g) 

specifies the deadlines that we use to 

determine which risk adjustment data 

submissions we consider when 

assigning the risk adjustment factors for 

payment in a given payment year. This 

section also establishes a reconciliation 

process to adjust payments for 

additional data submitted after the end 

of the MA risk adjustment data 

collection year (meaning the year the 

item or service was furnished to the MA 

enrollee) but before the established 

deadline for the payment year, which 

can be no earlier than January 31 of the 

year following the payment year. This 

reconciliation period provides MA 

organizations an opportunity to update 

or submit encounter data records and 

chart review records to be considered 

for risk adjustment and payment in the 

applicable payment year. Section 

422.310(b)(1) requires MA organizations 

to submit data for all items and services 

provided; therefore, MA organizations 

must continue to submit encounter data 

records and data corrections after the 

final submission deadline if needed. 

(We note that there are limitations on 

which submissions after the final 

reconciliation deadline may be used in 

risk adjustment. See § 422.310(g).) The 

timing limitation on release of MA 

encounter data in our current regulation 

is tied to the established deadline for 

the payment year, and it results in a 

data lag of at least 13 months after the 

end of the MA risk adjustment data year 

(that is, the year during which the 

services were furnished), before CMS 

may release the MA risk adjustment 

data for the purposes described in 

§ 422.310(f)(1).97 We believe there will 

be increased utility of MA encounter 

data for Medicaid programs if the data 

is released before final reconciliation for 

coordination of care under the allowable 

purpose in § 422.310(f)(1)(vii). We 

believe that the reasons and concerns 

we identified when adopting the delay 

in release of MA encounter data can be 

sufficiently taken into account by CMS 

as part of evaluating a request to use the 

data for specific purposes and 

determining whether to release the data. 

Further, in many cases, those reasons 

and concerns likely do not sufficiently 

apply in the context of care 

coordination to require a delay in 

releasing the data as discussed further 

below. 

In order to improve utility of MA 

encounter data for certain approved 

purposes, we propose to add a new 

subsection § 422.310(f)(3)(v) to allow for 

MA encounter data to be released to 

States for the purpose of coordinating 

care for dually eligible individuals 

when CMS determines that releasing the 

data to a State Medicaid agency before 

reconciliation is necessary and 

appropriate to support activities and 

uses authorized under paragraph 

(f)(1)(vii). As discussed above, the 

proposed amendments to 

§ 422.310(f)(1)(vii) would expand the 

scope of that provision to include using 

the data to support administration of the 

Medicaid program, and in our 

discussion we clarified that 

coordination of care activities are within 

the scope of activities that support 

administration of these health care 

programs. We are specifying care 

coordination for our proposal for release 

of MA encounter data prior to 

reconciliation as we believe providing 

States access to this more timely data is 

critical to effectively coordinating care, 

is directly tied to our responsibility to 

support States’ efforts to coordinate and 

align care and services for dually 

eligible individuals, and furthers our 

goal to improve care continuity and 

ensure safe and effective care transitions 

for dually eligible individuals (see 42 

U.S.C. 1315B) while accommodating the 

concerns that led us to adopt the time 

limits in § 422.310(f)(3). Together, the 

proposed changes to § 422.310(f)(1)(vii) 

and (f)(3)(v) would improve timeliness 

of the MA encounter data we make 

available to States for coordination of 

care for dually eligible individuals. 

As discussed above, a growing 

number of dually eligible individuals 

are enrolled in MA plans. To ensure that 

these individuals are receiving high 

quality, efficient care, it is essential that 

States have access to information on 

their service utilization in a timely 

manner. Without timely, comprehensive 

beneficiary data, which are not 

currently available to States for all MA 

enrollees, States cannot conduct care 

coordination for dually eligible 

individuals in MA. For example: 

• A State looks to coordinate care 

related to the COVID–19 pandemic for 

individuals concurrently enrolled in 

Medicaid and MA plans, such as by 

identifying people who had COVIDrelated hospitalizations. In accordance 

with § 422.310(f)(3), our current release 

schedule of MA encounter data for 

research purposes limits available MA 

encounter data to between 13 and 25 or 

more months after the service was 

rendered.98 Therefore, with the 

exception of those dually eligible 

individuals enrolled in an MA plan 

under a demonstration or in an MA D– 

SNP, where the State can use the 

contract with the plan in accordance 

with § 422.107 to obtain MA encounter 

data or other notifications under 

§ 422.107(d)(1) from the D–SNP, States 

could not access service utilization data 

for MA enrollees to coordinate care for 

dually eligible individuals who had a 

COVID-related hospitalization in a 

timely manner. Instead, the States 

would need to wait for the MA 

encounter data until after risk 

adjustment reconciliation for the 

applicable payment year has been 

completed—which would be months 

after a dually eligible individual 

required post-hospitalization follow-up 


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care. However, if States could access 

timely MA encounter data, then 

Medicaid care coordinators could follow 

up after a COVID-related hospitalization 

to ensure adequate care related to 

mental health treatment, coordinate 

approval of durable medical equipment, 

or ensure physical or rehabilitation 

therapy while reducing redundant visits 

or delays in care to the dually eligible 

individual. 

• A State uses a predictive modeling 

algorithm—using past service 

utilization, diagnosis, and other data— 

to identify people at high risk for poor 

outcomes or institutional placement. 

The State then targets those high-risk 

individuals in the Medicaid program for 

an intensive care management 

intervention and helps connect such 

individuals to necessary supports and 

services. In this case, the timeliness of 

information on service utilization (for 

example, an individual discharged from 

a skilled nursing facility stay could 

benefit by transition to Medicaid home 

and community-based services) is more 

important than the completeness of the 

available data (that is, whether 

additional subsequent encounters may 

later become available) so the State can 

coordinate care and deliver the 

intervention when an individual most 

needs it. 

We believe the two examples above 

represent cases where we would 

consider sharing MA encounter data 

with State Medicaid agencies prior to 

reconciliation as necessary and 

appropriate to support coordinating care 

for dually eligible individuals. States 

cannot rely on MA encounter data after 

final reconciliation because 

coordinating services requires access to 

timely data. For these activities, States 

rely more on timely data about service 

utilization than on complete data. 

Improving access to timely MA 

encounter data and ensuring Medicaid 

programs can coordinate care for dually 

eligible individuals supports our goal to 

providing dually eligible individuals 

full access to the benefits to which they 

are entitled (42 U.S.C. 1315B(d)). 

As discussed above, State Medicaid 

agencies cannot effectively coordinate 

care for individuals using data that is 

more than one or two years old. We 

recognize that the MA encounter data 

may be subject to edits before final 

reconciliation given the deadline for 

submission of risk adjustment data 

under § 422.310(g), which states that the 

final submission deadline is a date no 

earlier than January 31 of the year 

following the payment year, or that data 

from some MA organizations or for 

some enrollees may not be available as 

quickly as data from or for others. 

However, we believe that earlier release 

of MA encounter data to States for the 

purpose of care coordination for dually 

eligible individuals would be 

appropriate and, as stated above, many 

of the reasons and concerns to require 

a delay releasing MA encounter data 

likely do not sufficiently apply in the 

context of care coordination. Care 

coordination activities require State 

Medicaid agencies, or their contractors, 

to identify and contact individuals who 

have received, or are in need of, services 

from their providers. Since States would 

use the MA encounter data to identify 

opportunities for care improvement 

such as improving transitions of care or 

to promote the use of underutilized 

services, we do not foresee any risk to 

individuals from States using data that 

may be subject to change in the future. 

States would be able to use the data to 

identify more dually eligible individuals 

who are potentially in need of 

Medicaid-covered services. States are 

not required to act on the data and can 

address potential data concerns arising 

from using MA encounter data before 

final reconciliation as States have 

experience using Medicare data that 

may not be final for effective care 

coordination. In fact, many States 

already obtain timely Medicare FFS 

claims with a lag between 14 days to 

three months, depending on the data 

file, for uses such as care coordination, 

quality improvement, and program 

integrity in the Medicaid program. 

These Medicare FFS claims may also be 

subject to change subsequent to the 

States’ receipt of the data, yet we are not 

aware of any problems in these use 

cases caused by CMS sharing data that 

is still subject to change. Because the 

MA encounter data released to States 

would be for care coordination 

purposes, we do not anticipate any 

negative impacts from any potential 

subsequent changes to the encounters. 

MA encounter data made available to 

States prior to reconciliation would not 

contain disaggregated payment 

information, in accordance with 

§ 422.310(f)(2)(iv). Unlike MA encounter 

data used for CMS payment purposes, 

the pre-reconciliation MA encounter 

data would have no impact on plan 

payment. Under this proposal, release of 

the MA encounter data for care 

coordination purposes must be 

necessary and appropriation to support 

administration of the Medicaid program; 

we do not believe it would be 

appropriate or necessary to use the MA 

data released on this accelerated 

schedule for payment purposes. 

Coordination of care is a clear 

situation where more timely MA 

encounter data is needed for effective 

intervention without invoking risks that 

we have cited in the past about sharing 

MA risk adjustment data before final 

reconciliation. The timing limits in 

§ 422.310(f)(3) were adopted in the 

August 2014 final rule in response to 

comments expressing concern about 

release of the MA risk adjustment data 

(79 FR 50331 through 50332). In that 

prior rulemaking, some commenters 

cited concerns about release of MA 

encounter data submitted in the initial 

years due to concerns regarding systems 

development and submission 

challenges. We believe these concerns 

are mitigated by the subsequent years 

since the implementation of the August 

2014 final rule that have resulted in 

accumulation of experience submitting, 

reviewing, and using MA encounter 

data in accordance with § 422.310(f). In 

addition, CMS maintains several checks 

and edits in the encounter data system 

to minimize duplicate, incomplete, or 

inappropriate data stored in the 

encounter data system. We reiterate that 

this proposal to amend paragraph (f)(3) 

would only permit the release of MA 

encounter data to State Medicaid 

agencies for care coordination for dually 

eligible individuals. 

We also noted in prior rulemaking 

that our approach to reviewing requests 

for MA encounter data from external 

entities would incorporate the Medicare 

Part A/B and Part D minimum necessary 

data policy, with additional restrictions 

to protect beneficiary privacy and 

commercially sensitive information of 

MA organizations and incorporated that 

limitation into paragraph (f)(2) (79 FR 

50327). Therefore, this limitation would 

also apply when reviewing State 

requests for MA encounter data under 

the proposed expansion of 

§ 422.310(f)(1)(vi) and (vii), as well as to 

any State requests for MA encounter 

data before the reconciliation deadline 

to support coordination of care. CMS 

data sharing procedures include a 

review team that assesses data requests 

for minimum data necessary and 

appropriate use justifications for care 

coordination, and we would only 

approve release of MA encounter data 

for any data requests where the 

requestor has sufficiently demonstrated 

that the request satisfies all 

requirements of § 422.310(f). Other 

commenters on the August 2014 final 

rule expressed concerns that MA 

organizations are able to delete, replace, 

or correct MA encounter data before the 

reconciliation deadline, which could 

potentially result in inaccurate or 

incomplete MA encounter data and that 

incomplete or inaccurate data should 


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99For example, see the CCW Medicare Encounter 

Data User Guide: https://www2.ccwdata.org/web/ 

guest/user-documentation. 

not be used or released for the purposes 

outlined in § 422.310(f). As noted in the 

prior rulemaking, we consider what 

disclaimers are appropriate to provide 

to requestors to understand the 

limitations of the MA encounter data 

(79 FR 50329 through 50330).99 As 

noted above, States, or their contractors, 

are not required to act on the data and 

have experience using Medicare FFS 

claims that may not be final for effective 

care coordination. We are not aware of 

any care coordination issues that have 

arisen as a result of our sharing more 

Medicare FFS current data with States 

under our current data sharing 

processes. Additionally, CMS makes 

available technical assistance to States 

to help with State use and 

understanding of Medicare data; we 

intend to extend this technical 

assistance to States requesting MA 

encounter data to mitigate issues arising 

from non-final data. We will evaluate 

the potential concerns arising from 

using MA encounter data before final 

reconciliation when determining 

whether to release MA encounter data to 

States for care coordination activities for 

dually eligible individuals to support 

administration of the Medicare and 

Medicaid programs. 

Finally, we propose that these 

amendments to § 422.310(f) would be 

applicable upon the effective date of the 

final rule if these proposals are finalized 

as proposed. As outlined in section I.A., 

the majority of the proposals in this rule 

are proposed to be applicable beginning 

January 1, 2025. We do not believe that 

delaying the applicability of these 

proposed amendments beyond the 

effective date of the final rule is 

necessary because these proposals 

address CMS’s authority to use and 

share MA encounter data but do not 

impose any additional or new 

obligations on MA organizations. 

We welcome public comment on this 

proposal. 

3. Solicitation of Comments on Use of 

MA Encounter Data To Support 

Required Medicaid Quality Reporting 

In the final rule titled ‘‘Medicaid 

Program and CHIP; Medicaid and 

Children’s Health Insurance Program 

(CHIP) Core Set Reporting,’’ which 

appeared in the Federal Register on 

August 31, 2023 (88 FR 60278) (‘‘August 

2023 final rule’’), we established 

mandatory Core Set reporting 

requirements for States, as set forth in 

the Bipartisan Budget Act of 2018 (Pub. 

L. 115–123, enacted February 9, 2018) 

and the Substance Use-Disorder 

Prevention that Promotes Opioid 

Recovery and Treatment for Patients 

and Communities Act (SUPPORT Act) 

(Pub. L. 115–271, enacted October 24, 

2018). The new Core Set reporting 

requirements apply to all States with 

Medicaid and CHIP programs and 

include all Medicaid and CHIP 

participants, including dually eligible 

individuals enrolled in MA plans. 

States can only report certain Child 

and Adult Core Set measures by using 

utilization data. For reporting related to 

dually eligible individuals, this means 

accessing Medicare data. For dually 

eligible individuals in Medicare FFS, 

we make available Medicare FFS claims 

and events data to States to support, 

among other purposes, quality reporting 

for Child and Adult Core Set measures. 

But we do not currently make available 

MA encounter data to States in the same 

way. Although we have not shared MA 

encounter data broadly for Medicaid 

quality performance and quality 

improvement purposes through existing 

CMS data sharing programs, States may 

use their contracts with MA D–SNPs, 

which are required under § 422.107, to 

obtain Medicare data about the dually 

eligible individuals enrolled in those 

plans; this contractual ability to obtain 

MA encounter data through contracts 

with plans is specific to D–SNPs and 

does not include all MA plans. 

Therefore, we anticipate that reporting 

on dually eligible individuals enrolled 

in MA plans will be optional (that is, 

not mandatory) for States to include in 

reporting of the Child and Adult Core 

Sets. As we acknowledged in the August 

2023 final rule, ‘‘We recognize that 

States must obtain, link, and analyze 

Medicare data in order to report the 

Child and Adult Core Sets of measures 

for fee-for-service beneficiaries, and that 

States do not have access to encounter 

data for Medicare Part C (Medicare 

Advantage), and we expect to phase in 

required reporting of Child and Adult 

Core Set measures for dually eligible 

beneficiaries’’ (88 FR 60298 through 

60299). 

In accordance with current regulation 

text at § 422.310(f)(2), States may 

request MA encounter data for the 

purpose described at 

§ 422.310(f)(1)(iv)—to conduct quality 

review and improvement activities— 

which could support Medicaid Child 

and Adult Core Set reporting. However, 

the limitations in paragraph (f)(3) on 

sharing MA encounter data before final 

reconciliation would frustrate our desire 

for States to use the data to support 

timely Child and Adult Core Set 

reporting. The August 2023 final rule 

establishes a schedule through which 

Core Set reporting to CMS begins in the 

fall of 2024, applicable to data collected 

during the 2024 reporting period. 

However, as stated above, our current 

release schedule of MA encounter data 

in accordance with § 422.310(f)(3) limits 

available MA encounter data to between 

13 and 25 or more months after the 

service was rendered. Therefore, in the 

fall of 2024, during the 2024 Core Set 

reporting period, we anticipate only 

making available MA encounter data for 

services furnished in the 2022 year. This 

means that based on the current 

limitations in paragraph (f)(3), States 

would be unable to report on 2023 

services received by dually eligible 

individuals enrolled in an MA plan to 

CMS in the fall of 2024 for the Child and 

Adult Core Set measures. With over half 

of dually eligible individuals enrolled in 

MA plans, we believe it is essential that 

State Child and Adult Core Set reporting 

eventually include that population. We 

are soliciting comments on making MA 

encounter data available to States to 

support Child and Adult Core Set 

reporting as efficiently as possible while 

complying with § 422.310(f) and 

balancing considerations related to the 

timeliness of quality reporting with 

accuracy and completeness. We intend 

to take such comments into account in 

developing future policies and potential 

additional proposed revisions to 

§ 422.310. 

J. Standardize the Medicare Advantage 

(MA) Risk Adjustment Data Validation 

(RADV) Appeals Process 

In this proposed rule, we are 

proposing to revise certain timing issues 

in terms of when RADV medical record 

review determination and payment error 

calculation appeals can be requested 

and adjudicated. Specifically, we are 

proposing that Medicare Advantage 

(MA) organizations must exhaust all 

levels of appeal for medical record 

review determinations before the 

payment error calculation appeals 

process can begin. We believe that this 

clarification is necessary because RADV 

payment error calculations are directly 

based upon the outcomes of medical 

record review determinations. We also 

propose several other changes to our 

regulatory appeals process to conform 

with these proposed revisions. 

Section 1853(a)(1)(C) of the Act 

requires that CMS risk-adjust payments 

made to MA organizations. Risk 

adjustment strengthens the MA program 

by ensuring that accurate payments are 

made to MA organizations based on the 

health status and demographic 

characteristics of their enrolled 

beneficiaries, and that MA organizations 

are paid appropriately for their plan 


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100 88 FR 6643; https://www.federalregister.gov/ 

documents/2023/02/01/2023-01942/medicare-andmedicaid-programs-policy-and-technical-changesto-the-medicare-advantage-medicare. 

enrollees (that is, less for healthier 

enrollees who are expected to incur 

lower health care costs, and more for 

less healthy enrollees who are expected 

to incur higher health care costs). 

Making accurate payments to MA 

organizations also ensures we are 

safeguarding Federal taxpayer dollars. 

Contract-level RADV audits are CMS’s 

main corrective action for overpayments 

made to MA organizations when there is 

a lack of documentation in the medical 

record to support the diagnoses reported 

for risk adjustment. CMS conducts 

RADV audits of MA organizationsubmitted diagnosis data from a 

selection of MA organizations for 

specific payment years to ensure that 

the diagnoses they submitted are 

supported by their enrollees’ medical 

records. CMS can collect the improper 

payments identified during CMS and 

Department of Health and Human 

Services Office of Inspector General 

(HHS–OIG) audits, including the 

extrapolated amounts calculated by the 

OIG. The RADV audit appeals process, 

as outlined in 42 CFR 422.311, is 

applicable to both CMS and HHS–OIG 

audits and is therefore referred to as the 

‘‘MA RADV audit appeals process.’’ 

Additional information regarding CMS’s 

contract level RADV audits was 

outlined in the RADV final rule, CMS– 

4185–F2, published on February 1, 

2023.100

1. Current MA RADV Appeals Process 

CMS previously established a process 

after notice and comment rulemaking 

for MA organizations to appeal RADV 

audit findings as outlined by provisions 

at 42 CFR 422.311(c)(6) through (8). 

Once review of the medical records 

submitted by MA organizations to 

support audited HCCs is completed and 

overpayment amounts are calculated, 

HHS (CMS or HHS–OIG) issues an audit 

report to each audited MA organization 

contract. In accordance with 

§ 422.311(b)(1), this audit report 

includes the following: 

• Detailed enrollee-level information 

relating to confirmed enrollee HCC 

discrepancies. 

• The contract-level RADV-payment 

error estimate in dollars. 

• The contract-level payment 

adjustment amount to be made in 

dollars. 

• An approximate timeframe for the 

payment adjustment. 

• A description of the MA 

organization’s RADV audit appeal 

rights. 

The MA RADV audit appeals process 

begins once MA organizations are 

notified of their audit findings via a 

RADV audit report. MA organizations 

have 60 days from the date of issuance 

of a RADV audit report to file a written 

request for appeal and must follow the 

Secretary’s RADV audit appeals 

procedures and requirements under 

§ 422.311. MA organizations may appeal 

RADV medical record review 

determinations and/or the MA RADV 

payment error calculation and must 

specify which findings the MA 

organization is appealing when 

requesting an appeal of a RADV audit 

finding. 

Under CMS’s existing RADV audit 

appeals regulations under 42 CFR 

422.311(c)(6) through (8), the MA RADV 

administrative audit appeals process 

consists of three levels: reconsideration, 

hearing, and CMS Administrator review. 

Below is a summary of the three levels 

of appeal for background information 

only. This regulation is not proposing to 

revise the basic structure of these three 

levels of appeal. 

a. Reconsideration 

Reconsideration is the first stage of 

the RADV audit appeals process. When 

appealing a medical record review 

determination, the MA organization’s 

written request must specify the audited 

HCC(s) that it wishes to appeal and 

provide a justification of why the 

audited HCC(s) should not have been 

identified as an error. When appealing 

a payment error calculation, the MA 

organization’s written request must 

include its own RADV payment error 

calculation that clearly indicates where 

HHS’ payment error calculation was 

erroneous, as well as additional 

documentary evidence pertaining to the 

calculation of the error that the MA 

organization wishes the reconsideration 

official to consider. For payment error 

calculation appeals, a third-party who 

was not involved in the initial RADV 

payment error calculation reviews the 

HHS and MA organization’s RADV 

payment error calculations and 

recalculates, as appropriate, the 

payment error using the appropriate 

payment error calculation method for 

the relevant audit. 

The reconsideration official issues a 

written reconsideration decision to the 

MA organization, and this decision is 

considered final unless the MA 

organization disagrees with the 

reconsideration official’s decision and 

submits a valid request for CMS hearing 

officer review. A new audit report is 

subsequently issued for either a medical 

record review determination 

reconsideration or a payment error 

calculation reconsideration only if the 

reconsideration official’s decision is 

considered final. 

b. Hearing Officer Review 

An MA organization that disagrees 

with the reconsideration decision may 

request a hearing officer review in 

accordance with procedures and 

timeframes established by CMS under 

42 CFR 422.311(c)(7). If the MA 

organization appeals the medical record 

review reconsideration determination, 

the written request for RADV hearing 

must include a copy of the written 

decision of the reconsideration official, 

specify the audited HCC(s) that the 

reconsideration official confirmed as 

being in error, and explain why the MA 

organization disputes the 

reconsideration official’s determination. 

If the MA organization appeals a RADV 

payment error calculation, the written 

request for RADV hearing must include 

a copy of the written decision of the 

reconsideration official and the MA 

organization’s RADV payment error 

calculation that clearly specifies where 

the MA organization believes the 

Secretary’s payment error calculation 

was erroneous. 

The hearing officer has the authority 

to decide whether to uphold or overturn 

the reconsideration official’s decision 

and, pursuant to this decision, sends a 

written determination to CMS and the 

MA organization explaining the basis 

for the decision. If necessary, a third 

party who was not involved in the 

initial RADV payment error calculation 

recalculates the RADV payment error 

and issues a new RADV audit report to 

the MA organization. For MA 

organizations appealing the RADV 

payment error calculation only, a third 

party not involved in the initial RADV 

payment error calculation recalculates 

the MA organization’s RADV payment 

error and issues a new RADV audit 

report to the appellant MA organization 

and CMS. The hearing officer’s decision 

is final unless the decision is reversed 

or modified by the CMS Administrator. 

c. CMS Administrator Review 

Under the existing RADV audit 

appeals regulation at 42 CFR 

422.311(c)(8), a request for CMS 

Administrator review must be made in 

writing and filed with the CMS 

Administrator within 60 days of receipt 

of the hearing officer’s decision. After 

receiving a request for review, the CMS 

Administrator has the discretion to elect 

to review the hearing officer’s decision 

or decline to review the hearing officer’s 

decision. If the CMS Administrator 

elects to review the hearing decision, 

the CMS Administrator then will 


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acknowledge the decision to review the 

hearing officer’s decision in writing and 

notify CMS and the MA organization of 

their right to submit comments within 

15 days of the date of the notification. 

The CMS Administrator renders his or 

her final decision in writing to the 

parties within 60 days of acknowledging 

his or her decision to review the hearing 

officer’s decision. The decision of the 

hearing officer becomes final if the CMS 

Administrator declines to review the 

hearing officer’s decision or does not 

render a decision within 60 days. 

2. Proposed Policies 

In this proposed rule, we are revising 

the timing of when a medical record 

review determination and a payment 

error calculation appeal can be 

requested and adjudicated. Specifically, 

we are proposing that MA organizations 

must exhaust all levels of appeal for 

medical record review determinations 

before beginning the payment error 

calculation appeals process. We believe 

that this change is necessary because 

RADV payment error calculations are 

based upon the outcomes of medical 

record review determinations and the 

current regulatory language is somewhat 

ambiguous regarding this point. 

Adjudicating medical record review 

determination appeals prior to payment 

error calculation appeals alleviates 

operational concerns for CMS and 

burden on MA organizations by 

preventing unnecessary appeals of 

payment error calculations that will be 

moot if revisions must be made to 

payment error calculations based on 

medical record review determination 

appeal decisions. 

Section 422.311(c)(5)(iii) states that, 

‘‘for [MA organizations] that appeal both 

medical record review determination 

appeal and RADV payment error 

calculation appeal [,] . . . the Secretary 

adjudicates the request for the RADV 

payment error calculation following 

conclusion of reconsideration of the MA 

organization’s request for medical 

record review determination appeal.’’ 

The regulations also state that, for cases 

in which an MA organization requests 

both a medical record review 

determination appeal and payment error 

calculation appeal, ‘‘. . . an [MA 

organization’s] request for appeal of its 

RADV payment error calculation will 

not be adjudicated until appeals of 

RADV medical record review 

determinations filed by the MA 

organization have been completed and 

the decisions are final for that stage of 

appeal’’ [emphasis added]. This 

language arguably addresses both those 

cases in which the final adjudication is 

reached during the reconsideration 

phase, as well as those that proceed to 

the second and third level of appeal. We 

propose to delete § 422.311(c)(5)(ii)(C), 

which requires MA organizations 

requesting both a medical record review 

determination appeal and payment error 

calculation appeal to file their written 

requests for both appeals within 60 days 

of the issuance of the RADV audit report 

before the reconsideration level of 

administrative appeal. Instead, we 

propose that MA organizations may 

request only a medical record review 

determination appeal or payment error 

calculation appeal for purposes of 

reconsideration, and not both at the 

same time. We propose to amend 

§ 422.311(c)(5)(iii) by providing that MA 

organizations who request a medical 

record review determination appeal may 

only request a payment error calculation 

appeal after the completion of the 

medical record review determination 

administrative RADV appeal process. 

An MA organization may also choose 

to only appeal the payment error 

calculation, and therefore, no preceding 

medical record review determination 

appeal would occur. MA organizations 

choosing to only file a payment error 

calculation appeal will not be able to 

file a medical record review 

determination appeal after the 

adjudication of payment error 

calculation appeal. At 

§ 422.311(c)(5)(ii)(B), we propose to 

specify that MA organizations will forgo 

their medical record review 

determination appeal if they choose to 

only file a payment error calculation 

appeal, because medical record review 

appeals decisions need to be final prior 

to adjudicating a payment error 

calculation appeal. 

At § 422.311(c)(5)(iii)(A) and (B), we 

propose to specify that this process is 

complete when the medical record 

review determination appeals process 

has been exhausted through the three 

levels of appeal, or when the MA 

organization does not timely request a 

medical record review determination 

appeal at the hearing officer or CMS 

Administrator review stage. At proposed 

§ 422.311(c)(5)(iii)(B), we propose that 

an MA organization whose medical 

record review determination appeal has 

been completed has 60 days from the 

issuance of a revised RADV audit report 

to file a written request for payment 

error calculation appeal, which specifies 

the issues with which the MA 

organization disagrees and the reasons 

for the disagreements. If, as a result of 

the medical record review 

determination appeals process, no 

original determinations are reversed or 

changed, then the original audit report 

will be reissued and the MA 

organization will have 60 days from the 

date of issuance to submit a payment 

error calculation appeal if it so chooses. 

We also propose to revise 

§ 422.311(c)(6)(i)(A) to clarify that an 

MA organization’s request for medical 

record review determination 

reconsideration must specify any and all 

audited HCCs from an audit report that 

the MA organization wishes to dispute. 

The intent of this revision is to permit 

an MA organization to submit only one 

medical record review determination 

reconsideration request per audited 

contract, which includes all disputed 

audited HCCs, given that the results of 

all audited HCCs for a given audited 

contract are communicated as part of a 

single audit report. 

We also propose to revise 

§ 422.311(c)(6)(iv)(B) to clarify that the 

reconsideration official’s decision is 

final unless it is reversed or modified by 

a final decision of the hearing officer as 

defined at § 422.311(c)(7)(x). 

We also propose to add 

§ 422.311(c)(6)(v) to clarify that the 

reconsideration official’s written 

decision will not lead to the issuance of 

a revised audit report until the decision 

is considered final in accordance with 

§ 422.311(c)(6)(iv)(B). If the 

reconsideration official’s decision is 

considered final in accordance with 

§ 422.311(c)(6)(iv)(B), the Secretary will 

recalculate the MA organization’s RADV 

payment error and issue a revised RADV 

audit report superseding all prior RADV 

audit reports to the appellant MA 

organization. 

We also propose to revise 

§ 422.311(c)(7)(ix) to clarify that if the 

hearing officer’s decision is considered 

final in accordance with 

§ 422.311(c)(7)(x), the Secretary will 

recalculate the MA organization’s RADV 

payment error and issue a revised RADV 

audit report superseding all prior RADV 

audit reports for the specific MA 

contract audit. Once the medical record 

review determination decision of the 

adjudicator is final, we believe the same 

entity that issued the audit report will 

be able to revise the audit report by 

applying any medical record review 

determination findings that may have 

changed through the medical record 

review determination appeal process, 

and issue a revised audit report in the 

most efficient and streamlined manner. 

Issuing a revised audit report is a 

standard process and neutrally applies 

the final adjudicator’s medical record 

review determination findings. This 

process is consistent with other long 

standing CMS appeals program, such as 

the Provider Reimbursement Review 

Board (PRRB), where post-adjudication 

revised determinations are issued by the 


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same entity (e.g., the Medicare 

Administrative Contractor for PRRB 

cases) that issued the original 

determination. 

We also propose the following to 

provide clarity to the Administrator’s 

level of appeal: 

• To revise § 422.311(c)(8)(iii) to add 

a requirement that if the CMS 

Administrator does not decline to 

review or does not elect to review 

within 90 days of receipt of either the 

MA organization or CMS’s timely 

request for review (whichever is later), 

the hearing officer’s decision becomes 

final. 

• To revise § 422.311(c)(8)(iv)(A) to 

clarify that CMS and the MA 

organization may submit comments 

within 15 days of the date of the 

issuance of the notification that the 

Administrator has elected to review the 

hearing decision. 

• To revise § 422.311(c)(8)(v) to 

clarify that the requirement of the 

Administrator to render a final decision 

in writing within 60 days of the 

issuance of the notice acknowledging 

the decision to elect to review the 

hearing officer’s decision and the 60 day 

time period is determined by the date of 

the final decision being made by the 

Administrator, not by the date it is 

delivered to the parties. 

• To revise § 422.311(c)(8)(vi) to 

clarify the scenarios in which the 

hearing officer’s decision becomes final 

after a request for Administrator review 

has been made. 

• To add new § 422.311(c)(8)(vii) that 

states once the Administrator’s decision 

is considered final in accordance with 

§ 422.311(c)(8)(vi), the Secretary will 

recalculate the MA organization’s RADV 

payment error and issue a revised RADV 

audit report superseding all prior RADV 

audit reports to the appellant MA 

organization. 

We also propose to add new 

§ 422.311(c)(9) to specify what actions 

related to the RADV audit appeals 

process constitute final agency action. 

Specifically, in cases when an MA 

organization appeals a payment error 

calculation subsequent to an MRRD 

appeal that has completed the 

administrative appeals process, the 

MRRD final decision and the payment 

error calculation final decision will not 

be considered a final agency action until 

the related payment error calculation 

appeal has completed the administrative 

appeals process and a final revised audit 

report has been issued. 

We also propose to revise § 422.311(a) 

to remove the word ‘‘annually’’ for 

clarity, as the Secretary may conduct 

RADV audits on differing cadences 

between the CMS and HHS–OIG RADV 

audits. 

IV. Benefits for Medicare Advantage 

and Medicare Prescription Drug Benefit 

Programs 

A. Definition of ‘‘Basic Benefits’’ 

(§ 422.2) 

Section 1852(a)(1)(B)(i) of the Act 

defines the term ‘‘benefits under the 

original Medicare Fee-for-Service 

program option’’ for purposes of the 

requirement in subparagraph (a)(1)(A) 

that each MA organization provide 

enrollees such benefits. Section 

17006(c)(1) of the 21st Century Cures 

Act (Pub. L. 114–255) (hereafter referred 

to as ‘‘the Cures Act’’) amended section 

1852(a)(1)(B)(i) of the Act by inserting 

‘‘or coverage for organ acquisitions for 

kidney transplants, including as covered 

under section 1881(d)’’ after ‘‘hospice 

care.’’ Per section 17006(c)(3) of the 

Cures Act, this amendment applies with 

respect to plan years beginning on or 

after January 1, 2021. Thus, effective 

January 1, 2021, MA plans no longer 

cover organ acquisitions for kidney 

transplants, including the costs for 

living donors covered by Medicare 

pursuant to section 1881(d) of the Act. 

In the ‘‘Medicare and Medicaid 

Programs; Policy and Technical Changes 

to the Medicare Advantage, Medicare 

Prescription Drug Benefit, Programs of 

All-Inclusive Care for the Elderly 

(PACE), Medicaid Fee-For-Service, and 

Medicaid Managed Care Programs for 

Years 2020 and 2021,’’ final rule (84 FR 

15680), hereinafter referred to as the 

April 2019 final rule and the January 

2021 final rule, we amended the 

definition of ‘‘basic benefits’’ at 

§ 422.100(c)(1) to exclude coverage for 

organ acquisitions for kidney 

transplants, effective beginning in 2021, 

in addition to the existing exclusion for 

hospice care. In the June 2020 final rule, 

we also amended several regulations to 

address coverage of organ acquisition 

for kidney transplants for MA enrollees, 

with amendments to §§ 422.258, 

422.322, and 422.306. However, we 

inadvertently omitted making the same 

type of revision to the ‘‘basic benefits’’ 

definition at § 422.2. We propose to 

correct the definition of basic benefits at 

§ 422.2 to add the exclusion of coverage 

for organ acquisitions for kidney 

transplants to § 422.2. 

Specifically, we propose to revise the 

‘‘basic benefits’’ definition at § 422.2 to 

change the phrase ‘‘all Medicarecovered benefits’’ to ‘‘Part A and Part B 

benefits’’ and correct the phrase 

‘‘(except hospice services)’’ to include, 

beginning in 2021, organ acquisitions 

for kidney transplants (which includes 

costs covered under section 1881(d) of 

the Act). 

This proposal is a technical change to 

align the definition of basic benefits 

with existing law; therefore, neither an 

economic impact beyond current 

operating expenses nor an associated 

paperwork burden are expected. 

B. Evidence as to Whether a Special 

Supplemental Benefit for the 

Chronically Ill Has a Reasonable 

Expectation of Improving the Health or 

Overall Function of an Enrollee (42 CFR 

422.102(f)(3)(iii) and (iv) and (f)(4)) 

The Balanced Budget Act (BBA) of 

2018 included new authorities 

concerning supplemental benefits that 

may be offered to chronically ill 

enrollees in Medicare Advantage (MA) 

plans. We addressed these new 

supplemental benefits extensively in the 

Medicare Program; Contract Year 2021 

Policy and Technical Changes to the 

Medicare Advantage Program, Medicare 

Prescription Drug Benefit Program, and 

Medicare Cost Plan Program (hereafter 

referred to as ‘‘June 2020 final rule’’) (85 

FR 33796, 33800–05), where we referred 

to them as Special Supplemental 

Benefits for the Chronically Ill (SSBCI). 

As we summarized in the June 2020 

final rule, we interpreted the intent of 

this new category of supplemental 

benefits as enabling MA plans to better 

tailor benefit offerings, address gaps in 

care, and improve health outcomes for 

chronically ill enrollees who meet the 

definition established by the statute. 

Section 1852(a)(3)(D)(ii)(II) of the Act 

authorizes the Secretary to waive the 

uniformity requirements generally 

applicable to the benefits covered by 

MA plans with respect to SSBCI. 

Therefore, CMS may allow MA plans to 

offer SSBCI that are not uniform across 

the entire population of chronically ill 

enrollees in the plans but that are 

tailored and covered for an individual 

enrollee’s specific medical condition 

and needs (83 FR 16481–82). 

In addition to limiting the eligibility 

of enrollees who can receive SSBCI to 

chronically ill enrollees, section 

1852(a)(3)(D)(ii)(I) of the Act requires 

that an item or service offered as an 

SSBCI have a reasonable expectation of 

improving or maintaining the health or 

overall function of the chronically ill 

enrollee. We codified this statutory 

requirement as part of the definition of 

SSBCI at § 422.102(f)(1)(ii). 

As we provided in a Health Plan 

Management System (HPMS) 

memorandum dated April 24, 2019 

(‘‘2019 HPMS memo’’ hereafter), SSBCI 

can be in the form of: 

• Reduced cost sharing for Medicarecovered benefits; 


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101MA plan rebates are a portion of the amount 

by which the bidding benchmark or maximum MA 

capitation rate for a service area exceeds the plan’s 

bid; MA plans are obligated to use the MA rebates 

for the purposes specified in 42 CFR 422.266: 

payment of supplemental benefits (including 

reductions in cost sharing) or reductions in Part B 

or Part D premiums. 

102Taken from internal data. 

103Taken from internal data. 

104A PBP is a set of benefits for a defined MA 

(or Prescription Drug Plan) service area. The PBP 

is submitted by MA organizations and PDP 

sponsors to CMS for benefit analysis, marketing, 

and beneficiary communication purposes. 

105Taken from internal data. 

• Reduced cost sharing for primarily 

health-related supplemental benefits; 

• Additional primarily health-related 

supplemental benefits; and/or 

• Non-primarily health-related 

supplemental benefits. 

To offer an item or service as an 

SSBCI to an enrollee, an MA plan must 

make at least two separate 

determinations with respect to that 

enrollee in order to satisfy the statutory 

and regulatory requirements for these 

benefits. First, the MA plan must 

determine that an enrollee meets the 

definition of ‘‘chronically ill enrollee.’’ 

Section 1852(a)(3)(D)(iii) of the Act 

defines ‘‘chronically ill enrollee’’ as an 

individual enrolled in the MA plan who 

meets all of the following: (I) has one or 

more comorbid and medically complex 

chronic conditions that is lifethreatening or significantly limits the 

overall health or function of the 

enrollee; (II) has a high risk of 

hospitalization or other adverse health 

outcomes; and (III) requires intensive 

care coordination. Per 

§ 422.102(f)(1)(i)(B), CMS may publish a 

non-exhaustive list of conditions that 

are medically complex chronic 

conditions that are life-threatening or 

significantly limit the overall health or 

function of an individual. This list is 

currently the same as the list of chronic 

conditions for which MA organizations 

may offer chronic condition special 

needs plans, which can be found in 

section 20.1.2 of chapter 16–B of the 

Medicare Managed Care Manual. We 

require, at § 422.102(f)(3)(i), the MA 

plan to have written policies for making 

this determination and to document 

each determination that an enrollee is a 

chronically ill enrollee. Documentation 

of this determination must be available 

to CMS upon request according to 

§ 422.102(f)(3)(ii). 

Second, the MA plan must determine 

that the SSBCI has a reasonable 

expectation of improving or maintaining 

the health or overall function of the 

enrollee. Per § 422.102(f)(3)(iii), the MA 

plan ‘‘must have written policies based 

on objective criteria for determining a 

chronically ill enrollee’s eligibility to 

receive a particular SSBCI and must 

document these criteria.’’ We also 

require the MA plan to document ‘‘each 

determination that an enrollee is eligible 

to receive an SSBCI and make this 

information available to CMS upon 

request’’ at § 422.102(f)(3)(iv). 

We do not define or definitively 

interpret the phrase ‘‘has a reasonable 

expectation of improving or maintaining 

the health or overall function of the 

enrollee’’ in regulation or policy 

guidance. Rather, in a Health Plan 

Management System (HPMS) 

memorandum dated April 24, 2019 

(‘‘2019 HPMS memo’’ hereafter), we 

provided MA plans with ‘‘broad 

discretion in determining what may be 

considered ‘a reasonable expectation’ 

when choosing to offer specific items 

and services as SSBCI.’’ We granted MA 

plans this discretion so that they might 

effectively tailor their SSBCI offerings 

and the eligibility standards for those 

offerings to the specific chronically ill 

population upon which the plan is 

focusing. 

We further indicated that ‘‘CMS will 

provide supporting evidence or data to 

an MA organization if CMS determines 

that an MA plan may not offer a specific 

item or service as an SSBCI because it 

does not have a reasonable expectation 

of improving or maintaining the health 

or overall function of a chronically ill 

enrollee.’’ In other words, we placed the 

burden on CMS, and not the MA plan, 

to generate evidence demonstrating 

whether the ‘‘reasonable expectation’’ 

standard—a standard that we granted 

broad discretion for an MA plan to 

determine—has been met when offering 

items or services as SSBCI. 

Supplemental benefits, including 

SSBCI, are generally funded using MA 

plan rebate dollars.101 When submitting 

an annual bid to participate in the MA 

program, an MA organization includes 

in its bid a Plan Benefit Package (PBP) 

and Bid Pricing Tool for each of its 

plans, where the MA organization 

provides information to CMS on the 

premiums, cost sharing, and 

supplemental benefits (including 

SSBCI) it proposes to offer. Since 

issuing the 2019 HPMS memo, the 

number of MA plans that offer SSBCI— 

and the number and scope of SSBCI 

offered by an individual plan—has 

significantly increased. We have 

observed these trends in reviewing PBPs 

from MA plans submitted in the past 

few years. 

Based on our internal data, 101 MA 

plans offered a food and produce benefit 

in contract year 2020, while 929 MA 

plans are offering this as an SSBCI in 

contract year 2023.102 Similarly, 88 MA 

plans offered transportation for nonmedical needs as an SSBCI in contract 

year 2020. In contract year 2023, 478 

MA plans are offering this as an 

SSBCI.103 MA plans are also continuing 

to identify items or services as SSBCI 

that were not included as examples in 

the 2019 HPMS memo. When an MA 

plan is offering such a benefit, it 

indicates this in the PBP 104 that it 

submits with its bid. The MA plan 

categorizes the benefit within our PBP 

submission system as an ‘‘other’’ SSBCI 

(a benefit designation within the PBP 

submission system) and describes the 

proposed new benefit in a ‘‘free text’’ 

field. While 51 MA plans offered an 

‘‘other’’ non-primarily health-related 

supplemental benefit in contract year 

2020, 440 plans are offering at least one 

‘‘other’’ non-primarily health related 

SSBCI in contract year 2023—and 226 

plans are offering at least two.105

Through SSBCI, MA organizations 

can design and implement benefits, 

including non-primarily health-related 

benefits, that may be able to holistically 

address various needs of chronically ill 

enrollees. As these benefits become a 

more significant part of the MA 

program, we believe it is important to 

update our processes for reviewing and 

approving SSBCI to manage the growth 

and development of new SSBCI 

offerings, as well as to ensure 

compliance with the statutory 

requirements at section 1852(a)(3)(D). 

Additionally, section 1854(b)(1)(C) of 

the Act requires that MA plans offer the 

value of MA rebates back to enrollees in 

the form of payment for supplemental 

benefits, cost sharing reductions, or 

payment of Part B or D premiums. As 

an increasing share of Medicare dollars 

is going toward MA rebates that plans 

are using to offer SSBCI, we believe that 

revising the regulation to adopt greater 

review and scrutiny of these benefits is 

important for CMS to maintain good 

stewardship of Medicare dollars, 

including the MA rebates used to pay 

for these benefits, and for ensuring that 

the SSBCI offered are consistent with 

applicable law and those most likely to 

improve or maintain the health or 

overall function of chronically ill 

enrollees. Therefore, we propose to 

update our processes to simultaneously 

ensure effective program administration 

and oversight, while enabling MA 

organizations to offer SSBCI and 

improve health outcomes for 

chronically ill enrollees. 

Currently, the burden is on CMS to 

review SSBCI included in an MA 

organization’s bid and determine 

whether sufficient evidence or data 

exists to demonstrate that it has a 


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reasonable expectation of improving or 

maintaining the health or overall 

function of a chronically ill enrollee. 

Given the growth in the quantity and 

type of SSBCI offerings and given the 

associated burden increase on CMS in 

reviewing and approving bids that 

include SSBCI, we believe that it would 

be more efficient for the MA 

organization, rather than CMS, to 

demonstrate that the reasonable 

expectation standard has been met. 

When CMS provides MA 

organizations with broad latitude in 

offering items or services as SSBCI and 

in establishing what a ‘‘reasonable 

expectation’’ means for a given SSBCI, 

we believe that it is appropriate for the 

MA organization, rather than CMS, to 

identify supporting evidence or data to 

support an SSBCI and to establish 

compliance with the applicable law. 

We are proposing that an MA 

organization that includes an item or 

service as SSBCI in its bid must be able 

to demonstrate through relevant 

acceptable evidence that the item or 

service has a reasonable expectation of 

improving or maintaining the health or 

overall function of a chronically ill 

enrollee. As part of shifting 

responsibility this way, we are 

proposing, as relevant to an MA 

organization that includes SSBCI in its 

bid, to: (1) require the MA organization 

to establish, by the date on which it 

submits its bid, a bibliography of 

‘‘relevant acceptable evidence’’ related 

to the item or service the MA 

organization would offer as an SSBCI 

during the applicable coverage year; (2) 

require that an MA plan follow its 

written policies (that must be based on 

objective criteria) for determining 

eligibility for an SSBCI when making 

such determinations; (3) require the MA 

plan to document denials of SSBCI 

eligibility rather than approvals; and (4) 

codify CMS’s authority to decline to 

accept a bid due to the SSBCI the MA 

organization includes in its bid and to 

review SSBCI offerings annually for 

compliance, taking into account the 

evidence available at the time. In 

addition, we propose to make a 

technical edit to § 422.102(f)(1)(i)(A)(2) 

to correct a typographical error. We 

describe each proposal in greater detail 

below. 

First, we propose to redesignate what 

is currently § 422.102(f)(3) to 

§ 422.102(f)(4), and to address, at new 

§ 422.102(f)(3), new requirements for 

each MA plan that includes an item or 

service as SSBCI in its bid. The MA 

organization must be able to 

demonstrate through relevant acceptable 

evidence that the item or service to be 

offered as SSBCI has a reasonable 

expectation of improving or maintaining 

the health or overall function of a 

chronically ill enrollee and must, by the 

date on which it submits its bid to CMS, 

establish a bibliography of all ‘‘relevant 

acceptable evidence’’ concerning the 

impact that the item or service has on 

the health or overall function of its 

recipient. The bibliography must be 

made available to CMS upon request. As 

part of this proposal, an MA 

organization would be required to 

include, for each citation in its written 

bibliography, a working hyperlink to or 

a document containing the entire source 

cited. This proposal would apply only 

to SSBCI offered in the form of 

additional primarily health-related 

supplemental benefits or SSBCI offered 

in the form of non-primarily healthrelated supplemental benefits. It would 

not apply to an SSBCI offered in the 

form of reduced cost sharing, regardless 

of the benefit for which it is offered. We 

also intend, at this time, that the 

proposal not apply to supplemental 

benefits offered under the Value-Based 

Insurance Design (VBID) Model 

administered by the Center for Medicare 

and Medicaid Innovation (CMMI), 

unless CMMI incorporates this policy 

within the VBID Model. 

We also propose, in new paragraph 

(f)(3)(iv), that the MA organization must 

make its bibliography of relevant 

acceptable evidence available to CMS 

upon request. CMS may request and use 

this bibliography, without limitation, 

during bid review to assess whether 

SSBCI offerings comply with regulatory 

requirements, or during the coverage 

year as part of CMS’s oversight 

activities. CMS does not intend, at this 

time, to require MA organizations to 

submit these bibliographies as a matter 

of course in submitting bids. 

We propose that the term ‘‘relevant 

acceptable evidence’’ would include 

large, randomized controlled trials or 

prospective cohort studies with clear 

results, published in a peer-reviewed 

journal, and specifically designed to 

investigate whether the item or service 

(that is proposed to be covered as an 

SSBCI) impacts the health or overall 

function of a population, or large 

systematic reviews or meta-analyses 

summarizing the literature of the same. 

We further propose that the MA plan 

must include in its bibliography all 

relevant acceptable evidence published 

within the 10 years preceding the month 

in which the MA plan submits its bid. 

Ideally, relevant acceptable evidence 

should include studies and other 

investigations specific to the chronic 

conditions for which the MA 

organization intends to target the SSBCI, 

but we are not proposing to make this 

a requirement at this time. We are 

concerned that relevant acceptable 

evidence applicable to many SSBCI will 

already be limited, and that requiring a 

bibliography be limited to only studies 

concerning certain chronic conditions 

would discourage the development of 

new SSBCI. Similarly, to the extent 

there exists sufficient relevant 

acceptable evidence that the item or 

service meets the reasonable expectation 

standard for a sample of a population, 

an MA organization may still offer an 

SSBCI to enrollees with a specific 

chronic condition even in the absence of 

any studies addressing the connection 

between an item or service and its effect 

on the health or overall function of 

individuals with that condition. 

We propose that, in the absence of 

publications that meet these standards, 

‘‘relevant acceptable evidence’’ for 

purposes of the MA plan’s bibliography 

could include case studies, Federal 

policies or reports, and internal analyses 

or any other investigation of the impact 

that the item or service has on the 

health or overall function of its 

recipient. By ‘‘bibliography,’’ we mean a 

list, and not a description, of scholarly 

publications or other works, as we 

describe below. 

In our April 2023 final rule, we 

discussed what constituted sufficiently 

high-quality clinical literature in the 

context of an MA organization 

establishing internal clinical criteria for 

certain Medicare basic benefits (88 FR 

22189, 22197). We believe that those 

standards are also applicable for 

identifying ‘‘relevant acceptable 

evidence’’ in the context of supporting 

whether an item or service offered as 

SSBCI has a reasonable expectation of 

improving or maintaining the health or 

overall function of a chronically ill 

enrollee. Therefore, our proposal for 

§ 422.102(f)(3)(ii) largely tracks the 

language in § 422.101(b)(6) describing 

acceptable clinical literature for 

purposes of establishing internal 

coverage criteria, but with revisions to 

be specific to the context of SSBCI and 

the reasonable expectation standard. 

Literature that CMS considers to be 

‘‘relevant acceptable evidence’’ for 

supporting an SSBCI offering include 

large, randomized controlled trials or 

cohort studies or all-or-none studies 

with clear results, published in a peerreviewed journal, and specifically 

designed to answer a question relevant 

to the requirements for offering and 

covering SSBCI and how the MA plan 

will implement the coverage—such as 

the impact of structural home 

modifications on health or overall 

function. Literature might also include 

that which involves large systematic 


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reviews or meta-analyses summarizing 

the literature specifically related to the 

subject of the SSBCI—such as meal 

delivery, availability of certain food or 

produce, or access to pest control— 

published in a peer-reviewed journal 

with clear and consistent results. Under 

this proposal, an MA organization 

would be required to cite all such 

available evidence in its bibliography, 

and not just studies that present 

findings favorable to its SSBCI offering. 

We also propose that, in the absence 

of literature that conforms to these 

standards for relevant acceptable 

evidence, an MA organization would be 

required to include in its bibliography 

evidence that is unpublished, is a case 

series or report, or derived solely from 

internal analyses within the MA 

organization. In this way, our proposed 

policy would deviate from the standard 

we established for the type of evidence 

necessary to support an MA 

organization’s internal coverage criteria 

for Medicare basic benefits. We believe 

this deviation is appropriate as there is 

relatively less research into the impact 

of the provision on items or services 

commonly offered as SSBCI on health or 

overall function of chronically ill 

individuals. 

We are not proposing that relevant 

acceptable evidence must directly 

address whether there is a reasonable 

expectation of improving or maintaining 

the health or overall function of a 

chronically ill enrollee with a specific 

chronic illness or condition (conditions 

that the MA plan would have identified 

in its PBP submission), but such 

materials may be more persuasive than 

materials that only describe the impact 

of certain items and services— 

particularly non-primarily healthrelated items and services—on healthier 

individuals or populations. Further, our 

proposal is limited to SSBCI offered as 

additional primarily health-related 

supplemental benefits and nonprimarily health-related supplemental 

benefits. We are not proposing to 

require a bibliography for SSBCI that are 

exclusively cost sharing reductions for 

Medicare-covered benefits or primarily 

health-related supplemental benefits, so 

the regulation text is limited to SSBCI 

that are items or services. Although we 

are not proposing to apply this new 

documentation requirement to cost 

sharing reductions offered as SSBCI, 

that type of SSBCI must also meet the 

reasonable expectation standard to be 

offered as SSBCI. 

We believe that this proposal would 

serve our goal of ensuring that SSBCI 

regulatory standards are met— 

specifically, that an item or service 

covered as an SSBCI has a reasonable 

expectation of improving or maintaining 

the health or overall function of a 

chronically ill enrollee. We expect that 

rigorous research like that we describe 

above might be limited, and that some 

studies may not produce results 

favorable to the offering of an SSBCI. 

However, when there are also favorable 

studies, the existence of such 

unfavorable studies does not necessarily 

mean that there could not be a 

‘‘reasonable expectation’’ that the SSBCI 

would improve or maintain the health 

or overall function of a chronically ill 

enrollee. And it is not our goal that 

mixed results in current literature—or 

the lack of rigorous research at all— 

would reduce innovation in SSBCI 

offerings. We wish to continue to see 

MA organizations identify new ways to 

deliver helpful benefits to chronically ill 

enrollees that can address their social 

needs while also improving or maintain 

the health or overall function of these 

chronically ill enrollees. Our goal is to 

ensure that SSBCI innovation occurs in 

a manner that is grounded to the extent 

possible in research, and that MA 

organizations and CMS alike are 

tracking to the most current research 

relevant to SSBCI offerings. We believe 

this proposal would continue to 

promote SSBCI innovation while 

helping to ensure that when Medicare 

funds are used to offer SSBCI, such 

offerings meet statutory requirements. 

We solicit comments on our proposed 

requirement that an MA organization 

that includes an item or service as 

SSBCI in its bid must, by the date on 

which it submits its bid to CMS, 

establish in writing a bibliography of all 

relevant acceptable evidence concerning 

the impact that the item or service has 

on the health or overall function of its 

recipient. We also solicit comments on 

our definition of ‘‘relevant acceptable 

evidence,’’ including the specific 

parameters or features of studies or 

other resources that would be most 

appropriate to include in our definition. 

We also solicit comments on our 

proposal that, for each citation in the 

written bibliography, the MA 

organization would be required to 

include a working hyperlink to or a 

document containing the entire source 

cited. Additionally, we solicit 

comments on whether we should apply 

this requirement to all items or services 

offered as SSBCI, or whether there are 

certain types or categories of SSBCI for 

which this requirement should not 

apply. 

Second, for clarity, we propose to 

explicitly require at redesignated 

§ 422.102(f)(4)(iii) that an MA plan 

apply its written policies, which must 

be based on objective criteria, that it 

establishes for determining whether an 

enrollee is eligible to receive an SSBCI. 

The regulation currently requires MA 

organizations to have written policies 

based on objective criteria for 

determining a chronically ill enrollee’s 

eligibility to receive a particular SSBCI 

and must document these criteria. 

While we anticipate that MA plans are 

already applying their written policies 

that identify the eligibility criteria when 

making these determinations, we 

propose to make clear that an MA plan 

must apply its written policies when 

making SSBCI eligibility 

determinations. 

We are considering whether to 

exclude the policies required by current 

§ 422.102(f)(3) (that is, the requirements 

we are proposing to redesignate to new 

paragraph (f)(4)) from the general rule 

reflected in § 422.111(d) that MA plans 

may change plan rules during the year 

so long as notice is provided to 

enrollees. We solicit comments on 

whether CMS should permit changes in 

SSBCI eligibility policies during the 

coverage year, and, if so, the limitations 

or flexibilities that CMS should 

implement that would still allow CMS 

to provide effective oversight over 

SSBCI offerings. The ability to change 

plan rules during the year does not 

permit changes in benefit coverage but 

would include policies like utilization 

management requirements, evidentiary 

standards for a specific enrollee to be 

determined eligible for a particular 

SSBCI, or the specific objective criteria 

used by a plan as part of SSBCI 

eligibility determinations. 

Third, we are proposing to amend 

redesignated paragraph (f)(4)(iv) to 

require that an MA plan document each 

instance wherein the plan determines 

that an enrollee is ineligible to receive 

an SSBCI. Denials of coverage when an 

enrollee requests an SSBCI are 

organization determinations subject to 

the rules in subpart M, including the 

requirements related to the timing and 

content of denial notices in § 422.568. 

By fully documenting denials as 

required by this proposal, MA 

organizations should be better placed to 

address any appeals, including when an 

adverse reconsideration must be sent to 

the independent review entity for 

review. Similarly, requiring robust 

documentation of denials of SSBCI by 

MA organizations will make oversight 

and monitoring by CMS easier and more 

productive, should CMS request 

documentation. 

We solicit comments on our proposal 

to require an MA plan to document its 

findings that a chronically ill enrollee is 

ineligible, rather than eligible, for an 

SSBCI. 


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106See, e.g., Ziad Obermeyer et al., Dissecting 

racial bias in an algorithm used to manage the 

health of populations. Science 366, 447–453 (2019). 

DOI:10.1126/science.aax2342. 

Fourth, we are proposing to add 

§ 422.102(f)(5) to codify CMS’s authority 

to decline to approve an MA 

organization’s bid, if CMS determines 

that the MA organization has not 

demonstrated, through relevant 

acceptable evidence, that an SSBCI has 

a reasonable expectation of improving 

or maintaining the health or overall 

function of the chronically ill enrollees 

that the MA organization is targeting. 

We clarify that while this proposal 

would establish a specific basis on 

which CMS may decline to approve an 

MA organization’s bid, our authority to 

enforce compliance with other 

regulations and to negotiate bids (see 

section 1854(a) of the Act and subpart 

F) would not be limited by this 

provision. As described in section 

1854(a)(5)(C) of the Act, CMS is not 

obligated to accept any or every bid 

submitted by an MA organization, and 

CMS may reject bids that propose 

significant increases in cost sharing or 

decreases in benefits offered under the 

plan. Similarly, CMS’s authority to 

review benefits to ensure nondiscrimination is not limited or affected 

under this proposal. This proposal is 

intended to clarify and establish that 

CMS’s review of bids that include 

SSBCI could include specific evaluation 

of SSBCI and that CMS may decline to 

approve bids based on a lack of relevant 

acceptable evidence in support of the 

SSBCI offering the MA organization 

includes in its bid. 

We also propose to codify that, 

regardless of whether an SSBCI offering 

was approved in the past, CMS may 

annually review the items or services 

that an MA organization includes as 

SSBCI in its bid for compliance with all 

applicable requirements, considering 

the relevant acceptable evidence 

applicable to each item or service at the 

time the bid is submitted. Under this 

proposal, CMS would have clear 

authority to evaluate an SSBCI included 

in a bid each year based on the evidence 

available at that time. CMS would not 

be bound to approve a bid that contains 

a certain SSBCI only because CMS 

approved a bid with the same SSBCI in 

the past. We believe this provision, if 

finalized, would help ensure sound use 

of Medicare dollars by establishing a 

clear connection between an SSBCI and 

the most current evidence addressing 

whether there is a reasonable 

expectation that the SSBCI will improve 

or maintain the health or overall 

function of a chronically ill enrollee. 

We believe that codifying that CMS 

may decline to approve a bid for an MA 

organization to offer certain SSBCI is 

appropriate to support CMS’s 

programmatic oversight function. CMS 

already possesses the authority to 

negotiate and reject bids under section 

1854 of the Act, and to establish certain 

minimum requirements related to SSBCI 

under section 1852 of the Act. We can 

rely on these bases to decline to approve 

bids that include SSBCI that lack 

evidence to support the MA 

organization’s expectations related to 

the SSBCI, but we believe it prudent to 

establish clearly how our evaluation of 

individual SSBCI offerings and the 

evidence supporting these offerings fit 

within our bid negotiation and approval 

authority. We believe that SSBCI 

provide a critical source of innovation, 

and we wish to see MA organizations 

continue to develop impactful benefits 

tailored to their chronically ill enrollees. 

However, we must also ensure that 

benefits offered within the MA program 

comply with all applicable statutory and 

regulatory standards. We believe it is 

critical for effective program 

administration that CMS be able to 

obtain, upon request, relevant 

acceptable evidence from an MA 

organization to support CMS’s review of 

SSBCI each year in light of the 

information and evidence available at 

that point in time. 

We solicit comment on this proposal 

to codify CMS’s authority to decline to 

approve an MA organization’s bid if the 

MA organization fails to demonstrate, 

through relevant acceptable evidence, 

that an SSBCI included in the bid has 

a reasonable expectation of improving 

or maintaining the health or overall 

function of the chronically ill enrollees 

that the MA organization is targeting. 

The policies proposed in this section 

work together to place the burden of 

showing whether an item or service 

offered as SSBCI has a reasonable 

expectation of improving the health or 

overall function of a chronically ill 

enrollee onto the MA organization. 

Implementing these proposals would 

change the policy set forth in the 2019 

HPMS memo requiring CMS to provide 

supporting evidence or data to an MA 

organization if CMS determines that an 

MA plan may not offer a specific item 

or service as an SSBCI because it has not 

met the reasonable expectation 

standard. Under these proposals, the 

MA organization must, in advance of 

including an SSBCI in its bid, have 

already conducted research on the 

evidence establishing a reasonable 

expectation that the item or service 

would improve or maintain the health 

or overall function of the recipient of 

the item or service. By the time the MA 

organization submits its bid, it must be 

able to show CMS, upon request, the 

relevant applicable evidence that 

supports the reasonable expectation that 

the item or service would improve or 

maintain the health or overall function 

of the chronically ill enrollees it is 

targeting. We expect that MA plans are 

already proactively conducting similar 

research and establishing written 

policies for implementing SSBCI based 

on this research when designing them. 

Additionally, MA plans may seek 

guidance from CMS regarding SSBCI 

items or services not defined in the PBP 

or in previous CMS guidance prior to 

bid submission. As such, we believe this 

proposal, if implemented, would create 

efficiency while imposing relatively 

little burden on MA plans. 

In addition, under this proposal, MA 

plans would be required to document 

and submit to CMS upon request each 

determination that an enrollee is not 

eligible to receive an SSBCI. We believe 

that requiring an MA organization to 

support its SSBCI offerings with a 

written bibliography of relevant 

acceptable evidence and an MA plan to 

document denials of SSBCI work 

together to ensure that SSBCI are being 

implemented in an evidence-based, 

non-discriminatory, and fair manner. 

The evidence base established by an MA 

organization could serve to inform an 

MA plan’s objective criteria for 

determining eligibility. By requiring an 

MA plan to document instances of 

SSBCI denials, we believe this proposal 

would improve the experience of MA 

plans, enrollees, and CMS in managing 

and oversight of appeals of such denials. 

Further, it would help ensure that MA 

plans are not denying access to SSBCI 

based on factors that are biased or 

discriminatory or unrelated to the basis 

on which the SSBCI are reasonably 

expected to improve or maintain the 

health or overall function of the 

chronically ill enrollees. For example, 

researchers have identified that certain 

algorithms that have been used to 

decide who gets access to additional 

services can have clear racial bias, when 

factors such as expected future cost or 

expected future utilization are 

incorporated into the algorithm.106 By 

codifying CMS’ authority to decline to 

approve a bid that includes an SSBCI 

not supported by evidence, this 

proposal also serves to ensure 

appropriate program administration and 

oversight. 

Finally, we propose to make a 

technical edit to § 422.102(f)(1)(i)(A)(2) 

to correct a typographical error. In our 

June 2020 final rule, we noted that 

section 1852(a)(3)(D)(ii) of the Act, as 


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107Available at https://www.federalregister.gov/ 

documents/2022/05/09/2022-09375/medicareprogram-contract-year-2023-policy-and-technicalchanges-to-the-medicare-advantage-and. 

108U.S. Government Accountability Office (GAO). 

‘‘MEDICARE ADVANTAGE Plans Generally Offered 

Some Supplemental Benefits, but CMS Has Limited 

Data on Utilization.’’ Report to Congressional 

Committee, 31 Jan. 2023, p. 20, www.gao.gov/ 

products/gao-23-105527. 

109https://www.cms.gov/research-statistics-dataand-systems/research/mcbs/data-briefs/dentalcoverage-status-and-utilization-preventive-dentalservices-medicare-beneficiaries-poster. 

110https://www.kff.org/report-section/racial-andethnic-disparities-in-access-to-and-utilization-ofcare-among-insured-adults-issue-brief/. 

amended, defines a chronically ill 

enrollee as an individual who, among 

other requirements, ‘‘[h]as a high risk of 

hospitalization or other adverse health 

outcomes[.]’’ We then indicated that 

‘‘we proposed to codify this definition 

of a chronically ill enrollee’’ at 

§ 422.102(f)(1)(i). However, our 

regulation at § 422.102(f)(1)(i)(A)(2) 

currently reads: ‘‘Has a high risk of 

hospitalization of other adverse 

outcomes[.]’’ We propose to substitute 

‘‘or’’ for the second ‘‘of’’ in this 

provision, such that it aligns with the 

statutory language that we intended to 

codify in our regulation. 

C. Mid-Year Notice of Unused 

Supplemental Benefits (§§ 422.111(l) 

and 422.2267(e)(42)) 

Per CMS regulations at § 422.101, MA 

organizations are permitted to offer 

mandatory supplemental benefits, 

optional supplemental benefits, and 

special supplemental benefits for the 

chronically ill (SSBCI). When 

submitting an annual bid to participate 

in the MA program, an MA organization 

includes a Plan Benefit Package (PBP) 

and Bid Pricing Tool (BPT) for each of 

its plans where the MA organization 

provides information to CMS on the 

premiums, cost sharing, and 

supplemental benefits (including 

SSBCI) it proposes to offer. The number 

of supplemental benefit offerings has 

risen significantly in recent years, as 

observed through trends identified in 

CMS’s annual PBP reviews. In 2023, 

roughly $61 billion was directed 

towards supplemental benefits in MA. 

At the same time, CMS has received 

reports that MA organizations have 

observed low utilization of these 

benefits by their enrollees, and it is 

unclear whether plans are actively 

encouraging utilization of these benefits 

by their enrollees, which could be an 

important part of a plan’s overall care 

coordination efforts. 

CMS remains concerned that 

utilization of these benefits is low and 

has taken multiple steps to obtain more 

complete data in this area. For example, 

in the May 2022 final rule, we finalized 

expanded Medical Loss Ratio (MLR) 

reporting requirements, requiring MA 

organizations to report expenditures on 

popular supplemental benefit categories 

such as dental, vision, hearing, 

transportation, and the fitness benefit 

(87 FR 27704, 27826–28).107 In addition, 

in March 2023, as a part of our Part C 

reporting requirements, we announced 

our intent to collect data to better 

understand the utilization of 

supplemental benefits, which if 

finalized, would include requiring MA 

plans to report utilization and cost data 

for all supplemental benefit offerings 

(88 FR 15726). Currently, there is no 

specific requirement for MA 

organizations, beyond more general care 

coordination requirements, to conduct 

outreach to enrollees to encourage 

utilization of supplemental benefits. 

CMS understands that projected 

supplemental benefit utilization, that is, 

the extent to which an MA organization 

expects a particular supplemental 

benefit to be accessed during a plan 

year, is estimated by an MA 

organization in part by the type and 

extent of outreach conducted for the 

benefit.108 We are concerned that 

beneficiaries may make enrollment 

decisions based on the allure of 

supplemental benefits that are 

extensively marketed by a given MA 

plan during the annual election period 

(AEP) only to not fully utilize, or utilize 

at all, those supplemental benefits 

during the plan year. This 

underutilization may be due to a lack of 

effort by the plan to help the beneficiary 

access the benefits or a lack of easy 

ability to know what benefits have not 

been accessed and are still available to 

the enrollee throughout the year. Such 

underutilization of supplemental 

benefits may nullify any potential 

health value offered by these extra 

benefits. 

Additionally, section 1854(b)(1)(C) 

requires that MA plans offer the value 

of MA rebates back to enrollees in the 

form of payment for supplemental 

benefits, cost sharing reductions, or 

payment of Part B or D premiums. 

Therefore, CMS has an interest in 

ensuring that MA rebates are provided 

to enrollees in a way that they can 

benefit from the value of these rebate 

dollars. For example, analysis indicates 

that while supplemental dental benefits 

are one of the most widely offered 

supplemental benefits in MA plans, 

enrollees in these plans are no more 

likely to access these services than 

Traditional Medicare enrollees.109

As discussed, MA organizations are 

given the choice of how to provide MA 

rebates to their enrollees. Organizations 

may, instead of offering supplemental 

benefits in the form of covering 

additional items and services, use rebate 

dollars to further reduce Part B and Part 

D premiums, reduce cost sharing for 

basic benefits compared to cost sharing 

in Traditional Medicare, and reduce 

cost sharing in other ways, such as 

reducing maximum out-of-pocket 

(MOOP) amounts. 

Over the last several years, CMS has 

observed upticks in (1) the number and 

variety of supplemental benefits offered 

by MA plans, (2) plan marketing 

activities by MA organizations, and (3) 

overall MA enrollment; we presume that 

an enrollee’s plan choice is influenced, 

at least in part, by the supplemental 

benefits an MA plan offers because the 

absence or presence of a particular 

supplemental benefit represents a 

distinguishable and easily understood 

difference between one plan and 

another. We are also concerned that 

some MA plans may be using these 

supplemental benefits primarily as 

marketing tools to steer enrollment 

towards their plan and are not taking 

steps to ensure that their enrollees are 

using the benefits being offered or 

tracking if these benefits are improving 

health or quality of care outcomes or 

addressing social determinants of 

health. We believe targeted 

communications specific to the 

utilization of supplemental benefits may 

further ensure that covered benefits 

(including those that are heavily 

marketed) are accessed and used by 

plan enrollees during the plan year. 

This outreach, in conjunction with the 

improved collection of utilization data 

for these supplemental benefits through 

MLR and our proposed collection 

through Part C reporting, should help 

inform whether future rulemaking is 

warranted. 

Finally, CMS is also working to 

achieve policy goals that advance health 

equity across its programs and pursue a 

comprehensive approach to advancing 

health equity for all, including those 

who have been historically underserved, 

marginalized, and adversely affected by 

persistent poverty and inequality. 

Several studies have pointed to 

disparities in health care utilization. For 

example, a Kaiser Family Foundation 

(KFF) study 110 found that there are 

significant racial and ethnic disparities 

in utilization of care among individuals 

with health insurance. Additionally, 

underserved populations tend to have a 

disproportionate prevalence of unmet 

social determinants of health needs, 


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111https://www.hmpgloballearningnetwork.com/ 

site/frmc/commentary/addressing-healthinequities-prior-authorization; and https://www

.ncbi.nlm.nih.gov/pmc/articles/PMC10024078/. 

112http://abcardio.org/wp-content/uploads/2019/ 

03/AB-20190227-PA-White-Paper-Survey-Resultsfinal.pdf. 

which can adversely affect health. We 

believe that the ability to offer 

supplemental benefits provides MA 

plans the unique opportunity to use 

Trust Fund dollars (in the form of MA 

rebates) to fill in coverage gaps in 

Traditional Medicare, by offering 

additional health care benefits or SSBCI 

that address unmet social determinants 

of health needs, and as such, all eligible 

MA enrollees should benefit from these 

offerings. Targeted outreach specific to 

the utilization of supplemental benefits 

may also serve to further ensure more 

equitable utilization of these benefits. 

The establishment of a minimum 

requirement for targeted outreach with 

respect to supplemental benefits that 

have not been accessed by enrollees 

would standardize a process to ensure 

all enrollees served under MA are aware 

of and utilizing, as appropriate, the 

supplemental benefits available to them. 

Section 1852(c)(1) of the Act requires, in 

part, that MA organizations disclose 

detailed descriptions of plan provisions, 

including supplemental benefits, in a 

clear, accurate, and standardized form 

to each enrollee of a plan at the time of 

enrollment and at least annually 

thereafter. We propose to use our 

authority to establish standards under 

Part C in section 1856(b)(1) of the Act 

to ensure adequate notice is provided to 

enrollees regarding supplemental 

benefits coverage. This proposal will 

further implement the disclosure 

requirement in section 1852(c)(1)(F) of 

the Act. Specifically, we propose that 

MA organizations must provide a model 

notification to enrollees of supplemental 

benefits they have not yet accessed. We 

propose to meet this goal by adding new 

provisions at §§ 422.111(l) and 

422.2267(e)(42) to establish this new 

disclosure requirement and the details 

of the required notice, respectively. 

This proposed requirement would 

ensure that a minimum outreach effort 

is conducted by MA organizations to 

inform enrollees of supplemental 

benefits available under their plan that 

the enrollee has not yet accessed. We 

propose that, beginning January 1, 2026, 

MA organizations must mail a mid-year 

notice annually, but not sooner than 

June 30 and not later than July 31 of the 

plan year, to each enrollee with 

information pertaining to each 

supplemental benefit available during 

that plan year that the enrollee has not 

begun to use. We understand that there 

may be a lag between the time when a 

benefit is accessed and when a claim is 

processed, so we would require that the 

information used to identify recipients 

of this notice be as up to date as possible 

at the time of mailing. MA organizations 

are not required to include 

supplemental benefits that have been 

accessed, but are not yet exhausted, in 

this proposed mid-year notice. 

Understanding that not all Medicare 

beneficiaries enroll in an MA plan 

during the AEP, we are specifically 

seeking comment on how CMS should 

address the timing of the notice for 

beneficiaries that have an enrollment 

effective date after January 1. One 

possible approach we are considering is 

to require the notice to be sent six 

months after the effective date of the 

enrollment for the first year of 

enrollment, and then for subsequent 

years, revert to mailing the notice 

between the proposed delivery dates of 

June 30 and July 31. Another option 

CMS is considering is to not require the 

notice to be mailed for the first year of 

enrollment for those beneficiaries with 

an effective date of May 1 or later, as 

they would be receiving their Evidence 

of Coverage (EOC) at around this same 

time but will not have had significant 

time in which to access these benefits. 

Those enrollees who would be exempt 

from the mailing, based on their 

enrollment effective date, would then 

receive the notice (if applicable because 

one or more supplemental benefits have 

not been accessed by the enrollee) 

between June 30 and July 31 in 

subsequent enrollment years. 

For each covered mandatory 

supplemental benefit and optional 

supplemental benefit (if the enrollee has 

elected) the enrollee is eligible for, but 

has not accessed, the MA organization 

must list in the notice the information 

about each such benefit that appears in 

EOC. For SSBCI, MA organizations must 

include an explanation of the SSBCI 

covered under the plan (including 

eligibility criteria and limitations and 

scope of the covered items and services) 

and must also provide point-of-contact 

information (which can be the customer 

service line or a separate dedicated 

line), with trained staff that enrollees 

can contact to inquire about or begin the 

SSBCI eligibility determination process 

and to address any other questions the 

enrollee may have about the availability 

of SSBCI under their plan. When an 

enrollee has been determined by the 

plan to be eligible for one or more 

specific SSBCI but has not accessed the 

SSBCI benefit by June 30 of the plan 

year, the notice must also include a 

description of the SSBCI to which the 

enrollee is entitled and must describe 

any limitations on the benefit. Note the 

proposals at section VI.A of this 

proposed rule that, if finalized, would 

require specific SSBCI disclaimers for 

marketing and communications 

materials that discuss the limitations of 

the SSBCI benefit being offered; we also 

propose that this mid-year notice must 

include the SSBCI disclaimer to ensure 

that the necessary information provided 

in the disclaimer is also provided to the 

enrollee in the notice. 

Furthermore, we are proposing that 

each notice must include the scope of 

the supplemental benefit(s), applicable 

cost sharing, instructions on how to 

access the benefit(s), applicable 

information on the use of network 

providers for each available benefit, list 

the benefits consistent with the format 

of the EOC, and a toll-free customer 

service number and, as required, a 

corresponding TTY number to call if 

additional help is needed. We solicit 

comments on the required content of the 

mid-year notice. 

We request comment on our proposal 

to require MA plans to provide enrollees 

with mid-year notification of covered 

mandatory and optional supplemental 

benefits (if elected) that have not been 

at least partially accessed by that 

enrollee, particularly the appropriate 

timing (if any) of the notice for MA 

enrollees who enroll in the plan midyear. 

D. Annual Health Equity Analysis of 

Utilization Management Policies and 

Procedures 

In recent years, CMS has received 

feedback from interested parties, 

including people with Medicare, patient 

groups, consumer advocates, and 

providers that utilization management 

(UM) practices in Medicare Advantage 

(MA), especially the use of prior 

authorization, can sometimes create a 

barrier for patients in accessing 

medically necessary care. Further, some 

research has indicated that the use of 

prior authorization may 

disproportionately impact individuals 

who have been historically underserved, 

marginalized, and adversely affected by 

persistent poverty and inequality,111

due to several factors, including; the 

administrative burden associated with 

processing prior authorization requests 

(for example, providers and 

administrative staff serving historically 

underserved populations, in particular, 

may not have the time or resources to 

complete the prior authorization 

process, including navigating the 

appeals process 112), a reduction in 

medication adherence, and overall 

worse medical outcomes due to delayed 

or denied care. Research has also shown 


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113https://www.aspe.hhs.gov/sites/default/files/ 

migrated_legacy_files/171041/ 

ASPESESRTCfull.pdf?_

ga=2.49530854.1703779054.1662938643- 

470268562.1638986031. 

114 86 FR 7009 (January 25, 2021); https://

www.federalregister.gov/d/2022-26956/p-227. 

115 87 FR 79479 fn. 7 (December 27, 2022); 

https://www.federalregister.gov/d/2022-26956/p228. 

116 87 FR 79479 fn. 8 (December 27, 2022); 

https://www.federalregister.gov/d/2022-26956/p229. 

117 ‘‘Medicare Program; Contract Year 2024 Policy 

and Technical Changes to the Medicare Advantage 

Program, Medicare Prescription Drug Benefit 

Program, Medicare Cost Plan Program, and 

Programs of All-Inclusive Care for the Elderly’’ final 

rule, which appeared in the Federal Register on 

April 12, 2023 (88 FR 22120). 

118https://www.phf.org/resourcestools/ 

Documents/Core_Competencies_for_Public_Health_

Professionals_2021October.pdf. 

119https://www.nbphe.org/cph-content-outline/. 

that dual eligibility for Medicare and 

Medicaid is one of the most influential 

predictors of poor health outcomes, and 

that disability is also an important risk 

factor linked to health outcomes.113

On January 20, 2021, President Biden 

issued Executive Order 13985: 

‘‘Advancing Racial Equity and Support 

for Underserved Communities Through 

the Federal Government’’ (E.O. 

13985).114 E.O. 13985 describes the 

Administration’s policy goals to 

advance equity across Federal programs 

and directs Federal agencies to pursue 

a comprehensive approach to advancing 

equity for all, including those who have 

been historically underserved, 

marginalized, and adversely affected by 

persistent poverty and inequality. 

Consistent with this Executive order, 

CMS announced ‘‘Advance Equity’’ as 

the first pillar of its 2022 Strategic 

Plan.115 This pillar emphasizes the 

importance of advancing health equity 

by addressing the health disparities that 

impact our health care system. CMS 

defines health equity as ‘‘the attainment 

of the highest level of health for all 

people, where everyone has a fair and 

just opportunity to attain their optimal 

health regardless of race, ethnicity, 

disability, sexual orientation, gender 

identity, socioeconomic status, 

geography, preferred language, or other 

factors that affect access to care and 

health outcomes.’’ 116

The April 2023 final rule 117 included 

several policy changes to advance 

health equity, as well as changes to 

address concerns from interested parties 

about the use of utilization management 

policies and procedures, including prior 

authorization, by MA plans. CMS 

understands that utilization 

management is an important means to 

coordinate care, reduce inappropriate 

utilization, and promote cost-efficient 

care. The April 2023 final rule adopted 

several important guardrails to ensure 

that utilization management policies 

and procedures are used, and associated 

coverage decisions are made, in ways 

that ensure timely and appropriate 

access to covered items and services for 

people enrolled in MA plans. CMS also 

continues to work to identify regulatory 

actions that can help support CMS’s 

goal to advance health equity and 

improve access to covered benefits for 

enrollees. 

Authority for MA organizations to use 

utilization management policies and 

procedures regarding basic benefits is 

subject to the mandate in section 

1852(a)(1) of the Act that MA plans 

cover Medicare Part A and Part B 

benefits (subject to specific, limited 

statutory exclusions) and, thus, to 

CMS’s authority under section 1856(b) 

of the Act to adopt standards to carry 

out the MA statutory provisions. In 

addition, the MA statute and MA 

contracts cover both the basic and 

supplemental benefits covered under 

MA plans, so additional contract terms 

added by CMS pursuant to section 

1857(e)(1) of the Act may also address 

supplemental benefits. Additionally, per 

section 1852(b) of the Act and 

§ 422.100(f)(2), plan designs and 

benefits may not discriminate against 

beneficiaries, promote discrimination, 

discourage enrollment, encourage 

disenrollment, steer subsets of Medicare 

beneficiaries to particular MA plans, or 

inhibit access to services. These 

requirements apply to both basic and 

supplemental benefits. We consider 

utilization management policies and 

procedures to be part of the plan benefit 

design, and therefore they cannot be 

used to discriminate or direct enrollees 

away from certain types of services. 

In the April 2023 final rule, CMS 

finalized a new regulation at § 422.137, 

which requires all MA organizations 

that use UM policies and procedures to 

establish a Utilization Management 

Committee to review and approve all 

UM policies and procedures at least 

annually and ensure consistency with 

Traditional Medicare’s national and 

local coverage decisions and relevant 

Medicare statutes and regulations. Per 

§ 422.137, an MA plan may not use any 

UM policies and procedures for basic or 

supplemental benefits on or after 

January 1, 2024, unless those policies 

and procedures have been reviewed and 

approved by the UM committee. While 

this requirement will ensure that all UM 

policies and procedures are kept up to 

date, we believe that reviewing and 

analyzing these policies from a health 

equity perspective is an important 

beneficiary protection. In addition, such 

an analysis may assist in ensuring that 

MA plan designs do not deny, limit, or 

condition the coverage or provision of 

benefits on a prohibited basis (such as 

a disability) and are not likely to 

substantially discourage enrollment by 

certain MA eligible individuals with the 

organization. For these reasons, we 

propose to add health equity-related 

requirements to § 422.137. First, we 

propose at § 422.137(c)(5) to require that 

beginning January 1, 2025, the UM 

committee must include at least one 

member with expertise in health equity. 

We are proposing that health equity 

expertise includes educational degrees 

or credentials with an emphasis on 

health equity, experience conducting 

studies identifying disparities amongst 

different population groups, experience 

leading organization-wide policies, 

programs, or services to achieve health 

equity, or experience leading advocacy 

efforts to achieve health equity. Since 

there is no universally accepted 

definition of expertise in health equity, 

we referred to materials from the 

Council on Linkages Between Academia 

and Public Health Practice 118 and the 

National Board of Public Health 

Examiners,119 to describe ‘‘expertise in 

health equity’’ in the context of MA and 

prior authorization. 

We also propose to add a requirement 

at § 422.137(d)(6) that the UM 

committee must conduct an annual 

health equity analysis of the use of prior 

authorization. We propose that the 

member of the UM committee, who has 

health equity expertise, as required at 

the proposed § 422.137(c)(5), must 

approve the final report of the analysis 

before it is posted on the plan’s publicly 

available website. The proposed 

analysis would examine the impact of 

prior authorization at the plan level, on 

enrollees with one or more of the 

following social risk factors (SRF): (1) 

receipt of the low-income subsidy or 

being dually eligible for Medicare and 

Medicaid (LIS/DE); or (2) having a 

disability. Disability status is 

determined using the variable original 

reason for entitlement code (OREC) for 

Medicare using the information from the 

Social Security Administration and 

Railroad Retirement Board record 

systems. CMS chose these SRFs because 

they mirror the SRFs that will be used 

to measure the Heath Equity Index 

reward for the 2027 Star Ratings (see 

§ 422.166(f)(3)), and we believe it is 

important to align expectations and 

metrics across the program. Moreover, 

CMS is requiring this analysis to take 

place at the MA plan level because the 

relevant information regarding enrollees 

with the specified SRFs is available at 


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the plan level, and we believe this level 

of analysis is important to discern the 

actual impact of the use of utilization 

management on enrollees that may be 

particularly subject to health disparities. 

To gain a deeper understanding of the 

impact of prior authorization practices 

on enrollees with the specified SRFs, 

the proposed analysis must compare 

metrics related to the use of prior 

authorization for enrollees with the 

specified SRFs to enrollees without the 

specified SRFs. This will allow the MA 

plan and CMS to begin to identify 

whether the use of prior authorization 

causes any persistent disparities among 

enrollees with the specified SRFs. The 

proposed analysis must use the 

following metrics, calculated for 

enrollees with the specified SRFS, and 

for enrollees without the specified SRFs, 

from the prior contract year, to conduct 

the analysis: 

• The percentage of standard prior 

authorization requests that were 

approved, aggregated for all items and 

services. 

• The percentage of standard prior 

authorization requests that were denied, 

aggregated for all items and services. 

• The percentage of standard prior 

authorization requests that were 

approved after appeal, aggregated for all 

items and services. 

• The percentage of prior 

authorization requests for which the 

timeframe for review was extended, and 

the request was approved, aggregated for 

all items and services. 

• The percentage of expedited prior 

authorization requests that were 

approved, aggregated for all items and 

services. 

• The percentage of expedited prior 

authorization requests that were denied, 

aggregated for all items and services. 

• The average and median time that 

elapsed between the submission of a 

request and a determination by the MA 

plan, for standard prior authorizations, 

aggregated for all items and services. 

• The average and median time that 

elapsed between the submission of a 

request and a decision by the MA plan 

for expedited prior authorizations, 

aggregated for all items and services. 

We propose to add at § 422.137(d)(7) 

that by July 1, 2025, and annually 

thereafter, the health equity analysis be 

posted on the plan’s publicly available 

website in a prominent manner and 

clearly identified in the footer of the 

website. We propose that the health 

equity analysis must be easily accessible 

to the general public, without barriers, 

including but not limited to ensuring 

the information is available: free of 

charge; without having to establish a 

user account or password; without 

having to submit personal identifying 

information (PII); in a machine-readable 

format with the data contained within 

that file being digitally searchable and 

downloadable from a link in the footer 

of the plan’s publicly available website, 

and include a .txt file in the root 

directory of the website domain that 

includes a direct link to the machinereadable file, in a format described by 

CMS (which CMS will provide in 

guidance), to establish and maintain 

automated access. We believe that by 

making this information more easily 

accessible to automated searches and 

data pulls, it will help third parties 

develop tools and researchers conduct 

studies that further aid the public in 

understanding the information and 

capturing it in a meaningful way across 

MA plans. 

Finally, we welcome comment on this 

proposal and seek comment on the 

following: 

• Additional populations CMS 

should consider including in the health 

equity analysis, including but not 

limited to: Members of racial and ethnic 

communities, members of the lesbian, 

gay, bisexual, transgender, and queer 

(LGBTQ+) community; individuals with 

limited English proficiency; members of 

rural communities; and persons 

otherwise adversely affected by 

persistent poverty or inequality. 

• If there should be further definition 

for what constitutes ‘‘expertise in health 

equity,’’ and if so, what other 

qualifications to include in a definition 

of ‘‘expertise in health equity.’’ 

• The proposed requirements for 

publicly posting the results on the 

plan’s website under § 422.137(d)(7) to 

ensure the data will be easily accessible 

to both the public and researchers. 

• Alternatives to the July 1, 2025, 

deadline for the initial analysis to be 

posted to the plan’s publicly available 

website. 

• CMS is considering adding an 

additional requirement that the UM 

Committee submit to CMS the link to 

the analysis report. This would allow 

CMS to post every link in one 

centralized location. We believe this 

would increase accessibility and 

transparency. 

In addition, we request comment on 

any specific items or services, or groups 

of items or services, subject to prior 

authorization that CMS should consider 

also disaggregating in the analysis to 

consider for future rulemaking. If 

further disaggregation of a group of 

items or services is requested, CMS is 

soliciting comment on what specific 

items or services would be included 

within the group. For example, if CMS 

should consider disaggregating a group 

of items or services related to behavioral 

health treatment in the health equity 

analysis, what items or services should 

CMS consider a part of behavioral 

health treatment. 

V. Enrollment and Appeals 

A. Revise Initial Coverage Election 

Period Timeframe To Coordinate With 

A/B Enrollment (§ 422.62) 

Section 4001 of the Balanced Budget 

Act of 1997 (Pub. L. 105–33) added 

sections 1851 through 1859 to the Social 

Security Act (the Act) establishing Part 

C of the Medicare program known 

originally as ‘‘Medicare+Choice’’ (M+C) 

and later as Medicare Advantage (MA). 

As enacted, section 1851(e) of the Act 

establishes specific parameters in which 

elections can be made and/or changed 

during enrollment and disenrollment 

periods under the MA program. 

Specifically, section 1851(e)(1) of the 

Act requires that the Secretary specify 

an initial coverage election period 

(ICEP) during which an individual who 

first becomes entitled to Part A benefits 

and enrolled in Part B may elect an MA 

plan. The statute further stipulates that 

if an individual elects an MA plan 

during that period, coverage under the 

plan will become effective as of the first 

day on which the individual may 

receive that coverage. Consistent with 

this section of the Act, in the Medicare 

Program; Establishment of the 

Medicare+Choice Program interim final 

rule with comment period which 

appeared in the Federal Register on 

June 26, 1998, (herein referred to as the 

June 1998 interim final rule), CMS 

codified this policy at § 422.62(a)(1) (63 

FR 35072). 

In order for an individual to have 

coverage under an MA plan, effective as 

of the first day on which the individual 

may receive such coverage, the 

individual must elect an MA plan before 

he or she is actually entitled to Part A 

and enrolled in Part B coverage. 

Therefore, in the June 1998 interim final 

rule CMS codified the ICEP to begin 3 

months prior to the month the 

individual is first entitled to both Part 

A and enrolled in Part B and ends the 

last day of the month preceding the 

month of entitlement (63 FR 35072). 

Section 102 of the Medicare 

Prescription Drug, Improvement, and 

Modernization Act of 2003 (MMA) (Pub. 

L. 108–173) revised section 1851(e)(1) of 

the Act to provide for an ICEP for MA 

that ends on the later of, the day it 

would end under pre-MMA rules as 

described above, or the last day of an 

individual’s Medicare Part B initial 

enrollment period (IEP). This approach 

extended an individual’s ICEP which 


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120 87 FR 20689 (April 8, 2022); https://

www.whitehouse.gov/briefing-room/presidentialactions/2022/04/05/executive-order-on-continuingto-strengthen-americans-access-to-affordablequality-health-coverage/. 

helped to ensure that an individual who 

uses their IEP to enroll in Medicare Part 

A and B has the opportunity to elect an 

MA or MA prescription drug (MA–PD) 

plan following their first entitlement to 

Part A and enrollment in Part B. 

Consistent with the revised provisions 

of section 1851(e)(1) of the Act, CMS 

codified this policy at § 422.62(a)(1) in 

the Medicare Program; Establishment of 

the Medicare Advantage Program final 

rule which appeared in the Federal 

Register on January 28, 2005 (70 FR 

4717). 

As described in § 422.50(a)(1), 

eligibility for MA or MA–PD enrollment 

generally requires that an individual 

first have Medicare Parts A and B and 

meet all other eligibility requirements to 

do so. The ICEP is the period during 

which an individual newly eligible for 

MA may make an initial enrollment 

request to enroll in an MA or MA–PD 

plan. Currently, once an individual first 

has both Parts A and B, their ICEP 

begins 3 months immediately before the 

individual’s first entitlement to 

Medicare Part A and enrollment in Part 

B and ends on the later of: 

• The last day of the month preceding 

entitlement to Part A and enrollment in 

Part B, or; 

• The last day of the individual’s Part 

B IEP. 

Individuals who want to enroll in 

premium-Part A, Part B, or both, must 

submit a timely enrollment request 

during their IEP, the General Enrollment 

Period (GEP), or an existing special 

enrollment period (SEP) for which they 

are eligible. Eligible individuals may 

choose to enroll in both Part A and B 

during their first opportunity, that is, 

during their IEP. These individuals have 

an ICEP as described in 

§ 422.62(a)(1)(ii), that is, they can 

choose to enroll in an MA plan (with or 

without drug coverage) at the time of, or 

after, they have both Part A and B, up 

until the last day of their IEP. However, 

not all individuals enroll in both Part A 

and B during their IEP. Other 

individuals, such as those who are 

working past age 65, may not have both 

Part A and B for the first time until after 

their IEP. These individuals may only 

have Part A and/or B for the first time 

when they use an SEP or a future GEP 

to enroll. To note, prior to January 1, 

2023, individuals who enrolled in Part 

A and/or Part B during the GEP had a 

universal effective date of July 1st. 

These individuals had an ICEP as 

described in § 462.22(a)(1)(i), that is, the 

ICEP started April 1st and ended June 

30th. Although these individuals had to 

decide whether to enroll in an MA or 

MA–PD plan prior to their July 1st 

effective date, they did have time to 

consider their options, as the GEP is 

January 1st–March 31st annually, and 

their enrollment in Part B, (and Part A 

if applicable), was not effective until 

July 1st. However, the Consolidated 

Appropriations Act, 2021, (CAA) (Pub. 

L. 116–260), revised sections 

1838(a)(2)(D)(ii) and 1838(a)(3)(B)(ii) of 

the Act to provide that for individuals 

who enroll during the GEP in a month 

beginning on or after January 1, 2023, 

their entitlement would begin with the 

first day of the month following the 

month in which they enroll. For 

example, if an individual has Part A, but 

enrolls in Part B in March, during the 

GEP, they would first have both Part A 

and Part B effective April 1st. Although 

this provides for an earlier Medicare 

effective date, the individual’s ICEP 

would occur prior to that Medicare 

effective date, that is, as described in 

§ 422.62(a)(1)(i) above, and they no 

longer have that additional time to 

consider their options. 

Currently, the individuals described 

above have an ICEP as described in 

§ 422.62(a)(1)(i) and can only enroll in 

an MA plan (with or without drug 

coverage) prior to the effective date of 

their Part A and B coverage. For 

example, an individual’s 65th birthday 

is April 20, 2022, and they are eligible 

for Medicare Part A and Part B 

beginning April 1, 2022. They have 

premium-free Part A; however, the 

individual is still working, and has 

employer health insurance, so they 

decide not to enroll in Part B during 

their IEP. The individual retires in April 

2023, and enrolls in Part B effective May 

1, 2023 (using a Part B SEP). The 

individual’s ICEP would be February 1st 

through April 30, 2023. These 

individuals need to decide if they want 

to receive their Medicare coverage 

through an MA plan prior to the 

effective date of their enrollment in both 

Part A and B. In this example, the 

individual would have to enroll in an 

MA plan using the ICEP by April 30, 

2023. 

Section 422.62(a)(1) was intended to 

provide beneficiaries who enroll in both 

Part A and Part B for the first time with 

the opportunity to elect an MA plan at 

the time that both their Part A and B 

coverage were effective. However, in 

practice, individuals described above, 

who do not enroll in Part B during their 

IEP, do not have an opportunity to elect 

to receive their coverage through an MA 

plan after their Part A and B coverage 

goes into effect. When an individual 

enrolls in both Part A and B for the first 

time using an SEP or the GEP, they have 

to determine, prior to the start of their 

coverage, if they want to receive their 

coverage through Original Medicare or 

an MA plan prior to the effective date 

of their Part A and B coverage. If they 

do not use their ICEP to enroll in an MA 

plan prior to when their Part A and B 

coverage becomes effective, they lose 

the opportunity to enroll in an MA plan 

to receive their Medicare coverage and 

will generally have to wait until the 

next enrollment period that is available 

to them to choose an MA plan. 

To provide more flexibility, we are 

proposing to revise the end date for the 

ICEP for those who cannot use their 

ICEP during their IEP. That is, we are 

proposing in § 422.62(a)(1)(i) that an 

individual would have 2 months after 

the month in which they are first 

entitled to Part A and enrolled in Part 

B to use their ICEP. Under proposed 

§ 422.62(a)(1)(i), the individual’s ICEP 

would begin 3 months prior to the 

month the individual is first entitled to 

Part A and enrolled in Part B and would 

end on the last day of the second month 

after the month in which the individual 

is first entitled to Part A and enrolled in 

Part B. Using the example above, we are 

proposing that the individual’s ICEP 

would be February 1st through June 30, 

2023, instead of February 1st to April 

30th. As described in § 422.68(a)(1), if 

an election is made prior to the month 

of entitlement in both Part A and Part 

B, the MA election would be effective as 

of the first date of the month that the 

individual is entitled to both Part A and 

Part B. 

We believe that extending the 

timeframe for the ICEP under 

§ 422.62(a)(1)(i) would provide 

beneficiaries that are new to Medicare 

additional time to decide if they want to 

receive their coverage through an MA 

plan. We believe that extending this 

timeframe would help those new to 

Medicare to explore their options and 

select coverage that best suits their 

needs and reduce the number of 

instances where an individual 

inadvertently missed their ICEP and has 

to wait until the next open enrollment 

period to enroll in MA or MA–PD plan. 

This proposal also supports President 

Biden’s April 5, 2022 Executive Order 

on Continuing to Strengthen Americans’ 

Access to Affordable, Quality Health 

Coverage,120 which, among other things, 

requires agencies to examine policies or 

practices that make it easier for all 

consumers to enroll in and retain 

coverage, understand their coverage 

options and select appropriate coverage, 

and also examine policies or practices 


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that strengthen benefits and improve 

access to health care providers. 

This proposed change in the ICEP 

timeframe aligns with the SEP 

timeframe that we have established in 

§ 422.62(b)(10), for individuals to enroll 

in an MA or MA–PD plan when their 

Medicare entitlement determination is 

made for a retroactive effective date, and 

the individual has not been provided 

the opportunity to elect an MA or MA– 

PD plan during their ICEP. It also aligns 

with the timeframe we have established 

in § 422.62(b)(26), effective January 1, 

2024, for an individual to enroll in an 

MA plan when they enroll in Part A 

and/or Part B using an exceptional 

condition SEP, as described in §§ 406.27 

and 407.23. 

This proposal would extend the 

timeframe of an existing enrollment 

period and would not result in a new or 

additional paperwork burden since MA 

organizations are currently assessing 

applicants’ eligibility for election 

periods as part of existing enrollment 

processes. All burden impacts of these 

provisions have already been accounted 

for under OMB control number 0938– 

1378 (CMS–10718). Similarly, we do not 

believe the proposed changes would 

have any impact to the Medicare Trust 

Fund. 

B. Enhance Enrollees’ Right To Appeal 

an MA Plan’s Decision To Terminate 

Coverage for Non-Hospital Provider 

Services (§ 422.626) 

Medicare Advantage (MA) enrollees 

have the right to a fast-track appeal by 

an Independent Review Entity (IRE) 

when their covered skilled nursing 

facility (SNF), home health, or 

comprehensive outpatient rehabilitation 

facility (CORF) services are being 

terminated. The regulations for these 

reviews at the request of an MA enrollee 

are located at 42 CFR 422.624 and 

422.626. Section 422.624 requires these 

providers of services to deliver a 

standardized written notice to the 

enrollee of the MA organization’s 

decision to terminate the provider’s 

services for the enrollee. This notice, 

called the Notice of Medicare NonCoverage (NOMNC), must be furnished 

to the enrollee before services from the 

providers are terminated. The NOMNC 

informs enrollees of their right to a fasttrack appeal of the termination of these 

provider services and how to appeal to 

the IRE. CMS currently contracts with 

certain Quality Improvement 

Organizations (QIOs) that have contracts 

under Title XI, Part B and section 

1862(g) of the Act to perform as the IRE 

for these specific reviews. The NOMNC 

is subject to the Paperwork Reduction 

Act (PRA) process and approval by the 

Office of Management and Budget 

(OMB). There is a parallel appeal 

process in effect for Medicare 

beneficiaries in Original Medicare (42 

CFR 405.1200 and 405.1202). 

Presently, if an MA enrollee misses 

the deadline to appeal as stated on the 

NOMNC, the appeal is considered 

untimely, and the enrollee loses their 

right to a fast-track appeal to the QIO. 

Enrollees may, instead, request an 

expedited reconsideration by their MA 

plan, as described in § 422.584. The QIO 

is unable to accept untimely requests 

from MA enrollees but does perform 

appeals for untimely requests from 

Medicare beneficiaries in Original 

Medicare as described at 

§ 405.1202(b)(4). 

Further, MA enrollees forfeit their 

right to appeal to the QIO if they leave 

a facility or otherwise end services from 

one of these providers before the 

termination date listed on the NOMNC, 

even if their appeal requests to the QIO 

are timely. (The MA enrollee retains the 

right to appeal to their MA plan in such 

cases because the decision to terminate 

the services is an appealable 

organization determination per 

§ 422.566(b)(3).) Beneficiaries in 

Original Medicare retain their right to 

appeal to the QIO, regardless of whether 

they end services before the termination 

date on the NOMNC. 

This proposed rule would modify the 

existing regulations regarding fast-track 

appeals for enrollees when they 

untimely request an appeal to the QIO, 

or still wish to appeal after they end 

services on or before the planned 

termination date. The proposed changes 

would bring the MA program further 

into alignment with Original Medicare 

regulations and procedures for the 

parallel appeals process. Finally, these 

changes were recommended by 

interested parties in comments to a 

previous rulemaking (CMS–4201–P, 

February 27, 2022). 

Specifically, the proposed changes 

would (1) require the QIO, instead of the 

MA plan, to review untimely fast-track 

appeals of an MA plan’s decision to 

terminate services in an HHA, CORF, or 

SNF; and (2) allow enrollees the right to 

appeal the decision to terminate 

services after leaving an SNF or 

otherwise ending covered care before 

the planned termination date. The 

proposed changes are modeled after the 

parallel process in effect for Original 

Medicare at 42 CFR 405.1200 through 

405.1202. 

To implement these changes, we are 

proposing to revise § 422.626(a)(2) to 

specify that if an enrollee makes an 

untimely request for a fast-track appeal, 

the QIO will accept the request and 

perform the appeal. We would also 

specify that the IRE decision timeframe 

in § 422.626(d)(5) and the financial 

liability provision in § 422.626(b) would 

not apply. The provision for untimely 

appeal requests by enrollees in 

proposed § 422.626(a)(2) closely parallel 

422 CFR 405.1202(b)(4) which 

establishes that the QIO will review 

untimely appeals of terminations of 

certain provider services from 

beneficiaries in Original Medicare. 

Secondly, we propose removing the 

provision at § 422.626(a)(3) that 

prevents enrollees from appealing to the 

QIO if they end their covered services 

on or before the date on their 

termination notice, even in instances of 

timely requests for fast-track appeals. 

Removal of this provision preserves the 

appeal rights of MA enrollees who 

receive a termination notice, regardless 

of whether they decide to leave a 

provider or stop receiving their services. 

This proposed expedited coverage 

appeals process would afford enrollees 

in MA plans access to similar 

procedures for fast-track appeals as for 

beneficiaries in Original Medicare in the 

parallel process. Untimely enrollee fasttrack appeals would be absorbed into 

the existing process for timely appeals 

at § 422.626, and thus, would not 

necessitate additional changes to the 

existing fast-track process. The burden 

on MA plans would be minimal and 

would only require that MA plans 

provide notices as required at 

§ 422.626(d)(1) for these appeals. 

Further MA plans would no longer have 

to perform the untimely appeals as 

currently required at § 422.626(a)(2). 

Beneficiary advocacy organizations, in 

comments to previous rulemakings on 

this topic, supported changes that 

would afford enrollees more time to 

appeal and afford access to IRE appeals 

even for untimely requests. 

The burden of conducting these 

reviews is currently approved under 

OMB collection 0938–0953. The 

proposed changes would require that 

untimely fast-track appeals would be 

performed by the QIO, rather than the 

enrollee’s health plan; thus, any burden 

related to this proposal would result in 

a shift in fast-track appeals from health 

plans to QIOs. 

C. Amendments to Part C and Part D 

Reporting Requirements (§§ 422.516 and 

423.514) 

CMS has authority under sections 

1857(e)(1) and 1860D–12(b)(3)(D) of the 

Act to require MA organizations and 

Part D plan sponsors to provide CMS 

‘‘with such information . . . as the 

Secretary may find necessary and 

appropriate.’’ CMS also has authority, in 


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121Part C Reporting Requirements are at https:// 

www.cms.gov/medicare/health-plans/ 

healthplansgeninfo/reportingrequirements and Part 

D Reporting Requirements are at https://

www.cms.gov/medicare/prescription-drugcoverage/prescriptiondrugcovcontra/rxcontracting_

reportingoversight. 

section 1856(b) of the Act, to establish 

standards to carry out the MA program. 

Likewise, existing CMS regulations 

cover a broad range of topics and data 

to be submitted to CMS. Under these 

authorities, CMS established reporting 

requirements at §§ 422.516(a) 

(Validation of Part C reporting 

requirements) and 423.514(a) 

(Validation of Part D reporting 

requirements), respectively. Pursuant to 

§§ 422.516(a) and 423.514(a), each MA 

organization and Part D sponsor must 

have an effective procedure to develop, 

compile, evaluate, and report 

information to CMS at the times and in 

the manner that CMS requires. In 

addition, §§ 422.504(f)(2) and 

423.505(f)(2) require MA organizations 

and Part D plan sponsors, respectively, 

to submit to CMS all information that is 

necessary for CMS ‘‘to administer and 

evaluate’’ the MA and Part D programs 

and to facilitate informed enrollment 

decisions by beneficiaries. Part D 

sponsors are also required to report all 

data elements included in all its drug 

claims by § 422.505(f)(3). Sections 

422.504(f)(2), 422.516(a), 423.505(f)(2), 

and 423.514(a) each list general topics 

of information and data to be provided 

to CMS, including benefits, enrollee 

costs, quality and performance, cost of 

operations, information demonstrating 

that the plan is fiscally sound, patterns 

of utilization, information about 

beneficiary appeals and grievances, and 

information regarding actions, reviews, 

findings, or other similar actions by 

States, other regulatory bodies, or any 

other certifying or accrediting 

organization. 

For many years, CMS has used this 

authority to collect retrospective 

information from MA organizations and 

Part D sponsors according to the Parts 

C and D Reporting Requirements that 

we issue each year, which can be 

accessed on CMS’s website.121 In 

addition to the data elements, reporting 

frequency and timelines, and levels of 

reporting found in the Reporting 

Requirements information collection 

documents, CMS also issues Technical 

Specifications, which supplement the 

Reporting Requirements and serve to 

further clarify data elements and outline 

CMS’s planned data analyses. The 

reporting timelines and required levels 

of reporting may vary by reporting 

section. While many of the current data 

elements are collected in aggregate at 

the contract level, such as grievances, 

enrollment/disenrollment, rewards and 

incentives, and payments to providers, 

the collection of more granular data is 

also supported by the regulations. CMS 

has the ability to collect more granular 

data, per the Part C and D Reporting 

Requirements as set forth in 

§§ 422.516(a) and 423.514(a), or to 

collect more timely data with greater 

frequency or closer in real-time than we 

have historically done. We propose 

revisions to update §§ 422.516(a) and 

423.514(a). Section 422.516 currently 

reads, ‘‘Each MA organization must 

have an effective procedure to develop, 

compile, evaluate, and report to CMS, to 

its enrollees, and to the general public, 

at the times and in the manner that CMS 

requires, and while safeguarding the 

confidentiality of the doctor-patient 

relationship, statistics and other 

information.’’ We propose to strike the 

term ‘‘statistics,’’ as well as the words 

‘‘and other,’’ with the understanding 

that the broader term ‘‘information’’ 

which is already at § 422.516(a), 

includes statistics, Part C data, and 

information on plan administration. In a 

conforming proposal to amend 

§ 423.514(a), we propose to strike the 

term ‘‘statistics’’ and add ‘‘information.’’ 

CMS does not interpret these 

regulations to limit data collection to 

statistical or aggregated data and we are 

using this rulemaking as an opportunity 

to ensure that we are clear and 

consistent with our interpretation of 

these rules. 

Additionally, we propose to amend 

§§ 422.516(a)(2) and 423.514(a)(2) to 

make an affirmative change regarding 

CMS’s collection of information related 

to what occurs from beginning to end 

when beneficiaries seek to get coverage 

from their health and drug plans for 

specific services. In other words, under 

the existing requirements CMS has the 

ability to collect information related to 

all plan activities regarding adjudicating 

requests for coverage and plan 

procedures related to making service 

utilization decisions, and we aim to 

make this more transparent through this 

proposal. This could include, for 

example, information on pharmacy 

rejections, initial determinations, 

decision rationales, and plan level 

appeals. Both §§ 422.516(a)(2) and 

423.514(a)(2) currently require plans to 

report ‘‘The patterns of utilization of 

services.’’ We propose to amend both 

sections to read, ‘‘The procedures 

related to and utilization of its services 

and items’’ to be clear that these 

regulations authorize reporting and data 

collection about MA and Part D plan 

procedures related to coverage, 

utilization in the aggregate, and 

beneficiary-level utilization, including 

the steps beneficiaries may need to take 

to access covered benefits. Such 

information will ensure that CMS may 

better understand under what 

circumstances plans choose whether to 

provide or pay for a service or item. 

CMS is not proposing to change 

specific current data collection efforts 

through this rulemaking. Any future 

information collection would be 

addressed through the Office of 

Management and Budget (OMB) 

Paperwork Reduction Act (PRA) 

process, which would provide advance 

notice to interested parties and provides 

both a 60- and 30-day public comment 

period on drafts of the proposed 

collection. 

We do not believe the proposed 

changes to §§ 422.516(a) and 423.514(a) 

have either paperwork burden or impact 

on the Medicare Trust Fund at this time. 

These proposed changes allow CMS, in 

the future, to add new burden to plans 

in collection efforts; however, any such 

new burden associated with a new data 

collection would be estimated through 

the PRA process. 

D. Amendments To Establish 

Consistency in Part C and Part D 

Timeframes for Filing an Appeal Based 

on Receipt of the Written Decision 

(§§ 422.582, 422.584, 422.633, 423.582, 

423.584, and 423.600) 

Based on general feedback CMS has 

received from interested parties 

regarding a variance in the regulatory 

timeframe for beneficiaries to file an 

appeal with an MA organization or Part 

D plan sponsor, we are proposing to 

amend the Parts C and D regulations at 

§§ 422.582(b), 422.584(b), 422.633(d)(1), 

423.582(b), 423.584(b), and 423.600(a) 

with respect to how long an enrollee has 

to file an appeal with a plan or the Part 

D Independent Review Entity (IRE). 

These proposed amendments aim to 

ensure consistency with the regulations 

at §§ 422.602(b)(2), 423.2002(d), 

422.608, and 423.2102(a)(3), applicable 

to Administrative Law Judge (ALJ) and 

Medicare Appeals Council (Council) 

reviews, that either state or crossreference the Medicare FFS regulations 

at 42 CFR part 405 that prescribe that 

the date of receipt of the notice of 

decision or dismissal is presumed to be 

5 calendar days after the date of the 

notice, unless there is evidence to the 

contrary. These proposals would also 

apply to integrated organization 

determinations and reconsiderations. In 

addition, because cost plans are 

required, by §§ 417.600 and 417.840, to 

comply with the MA appeal regulations, 


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122https://www.cms.gov/medicare/appeals-andgrievances/mmcag/downloads/parts-c-and-denrollee-grievances-organization-coveragedeterminations-and-appeals-guidance.pdf. 

these proposed changes will also apply 

to cost plan appeals. 

Pursuant to our authority under 

section 1856(b) and 1860D–12 of the Act 

to adopt standards to carry out the Part 

C and Part D programs and in order to 

implement sections 1852(g)(2) and 

1860D–4(g) and (h) of the Act regarding 

coverage decisions and appeals, CMS 

established procedures and minimum 

standards for an enrollee to file an 

appeal regarding benefits with an MA 

organization, Part D plan sponsor, and 

IREs. These requirements are codified in 

regulation at 42 CFR parts 422 and 423, 

subpart M. See also section 1876(c)(5) of 

the Act regarding cost plans’ obligations 

to have appeal processes. 

Specifically, section 1852(g)(2)(A) of 

the Act requires that an MA 

organization shall provide for 

reconsideration of a determination upon 

request by the enrollee involved. The 

reconsideration shall be made no later 

than 60 days after the date of the receipt 

of the request for reconsideration. 

Section 1860D–4(g)(1) of the Act 

requires that a Part D plan sponsor shall 

meet the requirements of paragraph 

(2)(A) of section 1852(g) with respect to 

providing for reconsideration of a 

determination upon request by the 

enrollee involved. 

While section 1852 of the Act does 

not specify the timeframe in which an 

enrollee must request an appeal of an 

unfavorable organization determination, 

integrated organization determination or 

coverage determination, the timeframe 

for filing an appeal in the Part C and 

Part D programs is established in 

regulations. Sections 422.582(b), 

422.633(d)(1), and 423.582(b) state that 

an appeal must be filed within 60 

calendar days from the date of the 

notice issued as a result of the 

organization determination, integrated 

organization determination, coverage 

determination, or at-risk determination. 

Plans are permitted to extend this filing 

deadline for good cause. 

We continue to believe that a 60 

calendar day filing timeframe strikes an 

appropriate balance between due 

process rights and the goal of 

administrative finality in the 

administrative appeals process. 

However, to establish consistency with 

the regulations applicable to ALJ and 

Council reviews with respect to receipt 

of the notice of decision or dismissal 

and how that relates to the timeframe 

for requesting an appeal, we are 

proposing to account for a presumption 

that it will generally take 5 calendar 

days for a notice to be received by an 

enrollee or other appropriate party. 

Therefore, we are proposing to revise 

§§ 422.582(b), 422.633(d)(1)(i), 

423.582(b), and 423.600(a) to state that 

a request for a Part C reconsideration, 

Part D redetermination, Part D at-risk 

redeterminations and Part D IRE 

reconsiderations must be filed within 60 

calendar days after receipt of the written 

determination notice. The proposal also 

includes adding new §§ 422.582(b)(1), 

422.633(d)(1)(i), and 423.582(b)(1), 

which would provide that the date of 

receipt of the organization 

determination, integrated organization 

determination, coverage determination, 

or at-risk determination is presumed to 

be 5 calendar days after the date of the 

written organization determination, 

integrated organization determination, 

coverage determination or at-risk 

determination, unless there is evidence 

to the contrary. Based on CMS’s 

experience with audits and other similar 

review of plan documents, we realize 

that it is standard practice that the date 

of the written decision notice is the date 

the plan sends the notice. The 

presumption that the notice is received 

5 calendar days after the date of the 

decision is a long-standing policy with 

respect to IRE appeals and has been 

codified in regulation at 

§§ 422.602(b)(2), 423.2002(d), and 

423.2102(a)(3) regarding hearings before 

an ALJ and Council; further, § 422.608 

regarding MA appeals to the Medicare 

Appeals Council provides that the 

regulations under part 405 regarding 

Council review apply to such MA 

appeals, which would include the 

provision at § 405.1102(a)(2) that 

applies the same 5 day rule. To ensure 

consistency throughout the 

administrative appeals process, we 

believe it is appropriate and practical to 

adopt this approach for plan and Part D 

IRE appeals in §§ 422.582(b), 

422.633(d)(1), 423.582(b), 423.584, and 

423.600(a). 

In addition to the aforementioned 

proposals related to when an 

organization determination, integrated 

organization determination, coverage 

determination, or at-risk determination 

is presumed to be received by an 

enrollee of other appropriate party, we 

are also proposing to add language to 

§§ 422.582, 422.633, 423.582, and 

423.600(a) that specifies when an appeal 

is considered filed with a plan and the 

Part D IRE. Specifically, we are 

proposing to add new §§ 422.582(b)(2), 

422.633(d)(1)(ii), 423.582(b)(2), and 

423.600(a) to provide that for purposes 

of meeting the 60 calendar day filing 

deadline, the appeal request is 

considered filed on the date it is 

received by the plan, plan-delegated 

entity or Part D IRE specified in the 

written organization determination, 

integrated organization determination, 

coverage determination, at-risk 

determination, or redetermination. The 

inclusion of when a request is 

considered filed would codify what 

currently exists in CMS’s sub-regulatory 

guidance and the Part D IRE procedures 

manual. CMS’s sub-regulatory guidance 

indicates that a standard request is 

considered filed when any unit in the 

plan or delegated entity receives the 

request. An expedited request is 

considered filed when it is received by 

the department responsible for 

processing it. Pursuant to existing 

manual guidance, plan material should 

clearly state where requests should be 

sent, and plan policy and procedures 

should clearly indicate how to route 

requests that are received in an incorrect 

location to the correct location as 

expeditiously as possible. 

These proposed revisions related to 

when a notice is presumed to have been 

received would ensure that the time to 

request an appeal is not truncated by the 

time it takes for a coverage decision 

notice to reach an enrollee by mail or 

other delivery method. If these 

proposals are finalized, corresponding 

changes would be made to the Part C 

and Part D standardized denial notices 

so that enrollees are accurately informed 

of the timeframe for requesting an 

appeal. 

We are also proposing clarifications to 

§§ 422.584(b) and 423.584(b) to 

explicitly state the timeframe in which 

an enrollee must file an expedited plan 

appeal for it to be timely. The current 

text of §§ 422.584 and 423.584 does not 

include the 60-calendar day timeframe 

for filing an expedited appeal request, 

but CMS manual guidance for Part C 

and Part D appeals has long reflected 

this 60-calendar day timeframe. We also 

note that this timeframe for filing an 

appeal is consistent with the current 

regulations at §§ 422.582(b) and 

423.582(b) for filing a request for a 

standard appeal. Neither sections 1852 

and 1860D–4 of the Act, nor §§ 422.584 

and 423.584 specify the timeframe in 

which an enrollee must request an 

expedited appeal of an unfavorable 

organization determination, coverage 

determination or at-risk determination 

in the Part C and Part D programs. This 

provision would codify existing 

guidance. We are certain that plans 

already comply as this long-standing 

policy is reflected in CMS’s subregulatory guidance 122 and 


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123https://www.cms.gov/medicare/medicaregeneral-information/bni/madenialnotices. 

124This guidance can be found in chapter 2, 

sections 10 and 40.2.1 of the Medicare Managed 

Care Manual and chapter 3, sections 10 and 40.2.1 

of the Prescription Drug Benefit Manual. 

standardized denial notices 123 that 

explain an enrollee’s right to appeal. 

Additionally, we have not received any 

complaints on this matter. In proposing 

new §§ 422.584(b)(3) and (4) and 

423.584(b)(3) and (4), we also propose to 

add the procedure and timeframe for 

filing expedited organization 

determinations and coverage 

determinations consistent with 

proposed requirements at 

§§ 422.582(b)(1) and (2) and 

423.582(b)(1) and (2). 

If finalized, we believe these 

proposals would enhance consistency in 

the administrative appeals process and 

provide greater clarity on the timeframe 

for requesting an appeal and when an 

appeal request is considered received by 

the plan. Theoretically, the proposed 

amendments may result in a small 

increase in the number of appeals from 

allowing 65 versus 60 days to appeal an 

organization determination, integrated 

organization determination, coverage 

determination or at-risk determination. 

However, we believe, based on the low 

level of dismissals at the plan level due 

to untimely filing, that most enrollees 

who wish to appeal a denial do so 

immediately, thereby mitigating the 

impact of 5 additional days for a plan 

to accept an appeal request if this 

proposal is finalized. Consequently, we 

are not associating impact to the 

Medicare Trust Fund. We solicit 

interested party input on the accuracy of 

this assumption. 

E. Authorized Representatives for Parts 

C/D Elections (§§ 422.60 and 423.32) 

Section 1851(c)(1) of the Act gives the 

Secretary the authority to establish a 

process through which MA elections, 

that is, enrollments and disenrollments, 

are made and changed. This authority 

includes establishing the form and 

manner in which elections are made. 

Section 1860D–1(b)(1)(A) of the Act 

gives the Secretary the authority to 

establish a process for enrollment, 

disenrollment, termination, and change 

of enrollments in Part D prescription 

drug plans. Likewise, section 1860D– 

1(b)(1)(B)(ii) of the Act directs CMS to 

use rules similar to those established in 

the MA context pursuant to 1851(c) for 

purposes of establishing rules for 

enrollment, disenrollment, termination, 

and change of enrollment with an MA– 

PD plan. 

Consistent with these sections of the 

Act, Parts C and D regulations set forth 

our election processes under §§ 422.60 

and 423.32. These enrollment processes 

require that Part C/D eligible 

individuals wishing to make an election 

must file an appropriate enrollment 

form, or other approved mechanism, 

with the plan. The regulations also 

provide information for plans on the 

process for accepting election requests, 

notice that must be provided, and other 

ways in which the plan may receive an 

election on behalf of the beneficiary. 

Though the term ‘‘authorized 

representative’’ is not used in the 

context of the statutory provisions 

within the Act governing MA and Part 

D enrollment and eligibility (for 

example, sections 1851 and 1860D–1), 

‘‘authorized representative’’—and other 

similar terms—are used in other 

contexts throughout the Act. Section 

1866(f)(3) of the Act defines the term 

‘‘advance directive,’’ deferring to 

applicable State law to recognize 

written instructions such as a living will 

or durable power of attorney for health 

care. Section 1862(b)(2)(B)(vii)(IV) of the 

Act recognizes that an individual may 

be represented by an ‘‘authorized 

representative’’ in secondary payer 

disputes. Section 1864(a) of the Act 

allows a patient’s ‘‘legal representative’’ 

to stand in the place of the patient and 

give consent regarding use of the 

patient’s medical records. 

In the June 1998 interim final rule 

that first established the M+C program, 

now the MA program (63 FR 34985), we 

acknowledged in Part C enrollment 

regulations at § 422.60(c) that there are 

situations where an individual may 

assist a beneficiary in completing an 

enrollment request and required the 

individual to indicate their relationship 

to the beneficiary. In the ‘‘Medicare 

Program; Medicare Prescription Drug 

Benefit’’ final rule which appeared in 

the Federal Register on January 28, 

2005 (70 FR 4194), we first recognized 

in § 423.32(b) that an authorized 

representative may assist a beneficiary 

in completing an enrollment request, 

and required authorized representatives 

to indicate that they provided 

assistance. In response to public 

comments about the term ‘‘authorized 

representative’’ in that rule, we 

indicated that CMS would recognize 

and rely on State laws that authorize a 

person to effect an enrollment on behalf 

of a Medicare beneficiary for purposes 

of this provision. We also stated that the 

authorized representative would 

constitute the ‘‘individual’’ for purposes 

of making the enrollment or 

disenrollment request. 

Historically, we have provided the 

definition and policies related to 

authorized representatives in our subregulatory manuals.124 We are now 

proposing to add new paragraphs 

§§ 422.60(h) and 423.32(h) to codify our 

longstanding guidance on authorized 

representatives making Parts C and D 

elections on behalf of beneficiaries. 

Current regulation in § 423.32(b)(i) 

acknowledges that an ‘‘authorized 

representative’’ may assist a beneficiary 

in completing an enrollment form, but 

it does not define who an ‘‘authorized 

representative’’ is. A similar term, 

‘‘representative,’’ is currently defined 

under §§ 422.561 and 423.560; however, 

that definition is used only in the 

appeals context and applies only to 

subpart M of the MA and Part D 

regulations. Therefore, we are defining 

the term ‘‘authorized representative’’ for 

subpart B (eligibility, election, and 

enrollment). 

Our proposal defers to the law of the 

State in which the beneficiary resides to 

determine who is a legal representative. 

Deference to State law on these matters 

is consistent with other similar practices 

within CMS, including in the MA 

appeals definition of ‘‘representative’’ 

(§ 422.561) and Medicaid’s definition of 

‘‘authorized representative’’ (§§ 435.923; 

438.402), as well as in the HIPAA 

privacy regulations’ description of 

‘‘personal representative’’ (45 CFR 

164.502(g)). 

For those with State legal authority to 

act and make health care decisions on 

behalf of a beneficiary, our proposal 

would codify at paragraph (h)(1) of 

§§ 422.60 and 423.32 that authorized 

representatives will constitute the 

‘‘beneficiary’’ or the ‘‘enrollee’’ for the 

purposes of making an election, 

meaning that CMS, MA organizations, 

and Part D sponsors will consider the 

authorized representative to be the 

beneficiary/enrollee during the election 

process. Any mention of beneficiary/ 

enrollee in our enrollment and 

eligibility regulations would be 

considered to also include ‘‘authorized 

representative,’’ where applicable. Our 

proposal at paragraph (h)(2) of §§ 422.60 

and 423.32 would clarify that 

authorized representatives under State 

law may include court-appointed legal 

guardians, durable powers of attorney 

for health care decisions and State 

surrogate consent laws as examples of 

those State law concepts that allow the 

authorized representative to make 

health care decisions on behalf of the 

individual. This is not a complete list; 

we would defer to applicable State law 

granting authority to act and make 


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125This guidance can be found in chapter 2, 

section 30.3 of the Medicare Managed Care Manual. 

126This guidance can be found in chapter 2, 

section 30.6 and 30.7 of the Medicare Managed Care 

Manual and chapter 3, section 30.4 and 30.5 of the 

Prescription Drug Benefit Manual. 

127This guidance can be found in chapter 2, 

section 30.6 of the Medicare Managed Care Manual 

and chapter 3, section 30.4 of the Prescription Drug 

Benefit Manual. 

128This guidance can be found in chapter 2, 

section 30.6 of the Medicare Managed Care Manual 

and chapter 3, section 30.4 of the Prescription Drug 

Benefit Manual. 

health care decisions on behalf of the 

beneficiary. 

Codifying this longstanding guidance 

provides plans, beneficiaries and their 

caregivers, and other interested parties 

clarity and transparency on the 

requirements when those purporting to 

be the representatives of the beneficiary 

attempt to make election decisions on 

their behalf. We have not received 

negative public feedback on this 

longstanding policy. However, we have 

recently answered questions on plan 

procedures when dealing with 

authorized representatives. We are 

proposing to codify this longstanding 

guidance in order to clarify our policy 

regarding the role of authorized 

representatives in the MA and Part D 

enrollment process, including the 

applicability of State law in this context. 

This proposal represents the 

codification of longstanding MA and 

Part D sub-regulatory guidance. Based 

on questions from plans and 

beneficiaries related to current 

guidance, we conclude that the 

guidance has been previously 

implemented and is currently being 

followed by plans. Therefore, there is no 

additional paperwork burden associated 

with codifying this longstanding subregulatory policy, and there is also no 

impact to the Medicare Trust Fund. All 

information impacts related to the 

current process for determining a 

beneficiary’s eligibility for an election 

period and processing election requests 

have already been accounted for under 

OMB control numbers 0938–0753 

(CMS–R–267), 0938–1378 (CMS–10718), 

and 0938–0964 (CMS–10141). 

F. Open Enrollment Period for 

Institutionalized Individuals (OEPI) End 

Date (§ 422.62(a)(4)) 

Section 1851(e) of the Act establishes 

the coverage election periods for making 

or changing elections in the 

Medicare+Choice (M+C), later known as 

Medicare Advantage (MA), program. 

Section 501(b) of the Balanced Budget 

Refinement Act of 1999 (BBRA) (Pub. L. 

106–113) amended section 1851(e)(2) of 

the Act by adding a new subparagraph 

(D), which provides for continuous open 

enrollment for institutionalized 

individuals after 2001. CMS published a 

final rule with comment period (65 FR 

40317) in June 2000 implementing 

section 1851(e)(2)(D) by establishing a 

new continuous open enrollment period 

for institutionalized individuals (OEPI) 

at then § 422.62(a)(6). In subsequent 

rulemaking (83 FR 16722), the OEPI 

regulations were further updated to 

reflect conforming changes related to 

implementation of Title II of The 

Medicare Prescription Drug, 

Improvement, and Modernization Act of 

2003 (MMA) (Pub. L. 108–173) (70 FR 

4717) and to redesignate this provision 

from § 422.62(a)(6) through (4). 

As noted above, the OEPI is 

continuous. Individuals may use the 

OEPI to enroll in, change, or disenroll 

from a plan. Individuals are eligible for 

the OEPI if they move into, reside in, or 

move out of an institution. 

Longstanding sub-regulatory guidance 

has stated that the OEPI ends 2 months 

after an individual moves out of an 

institution, but this has not been 

articulated in regulations.125

To provide transparency and stability 

for plans, beneficiaries and their 

caregivers, and other interested parties 

about this aspect of MA enrollment, we 

propose to codify current sub-regulatory 

guidance that defines when the OEPI 

ends. Specifically, we propose to codify 

at new § 422.62(a)(4)(ii) that the OEPI 

ends on the last day of the second 

month after the month the individual 

ceases to reside in one of the long-term 

care facility settings described in the 

definition of ‘‘institutionalized’’ at 

§ 422.2. 

This proposal would define when the 

OEPI ends and would not result in a 

new or additional paperwork burden 

since MA organizations are currently 

implementing the policy related to the 

OEPI end date as part of existing 

enrollment processes. All burden 

impacts related to an applicant’s 

eligibility for an election period have 

already been accounted for under OMB 

control number 0938–0753 (CMS–R– 

267). Similarly, we do not believe the 

proposed changes would have any 

impact to the Medicare Trust Fund. 

G. Beneficiary Choice of C/D Effective 

Date if Eligible for More Than One 

Election Period (§§ 422.68 and 423.40) 

Section 1851(f) of the Act establishes 

the effective dates of elections and 

changes of elections for MA plans. In 

the June 1998 interim final rule, we 

specified the effective dates for elections 

and changes of elections of M+C (now 

MA) plan coverage made during various 

specified enrollment periods (63 FR 

34968). The effective date requirements 

for the initial coverage election period 

(ICEP), annual election period (AEP), 

MA open enrollment period (MA–OEP), 

open enrollment period for 

institutionalized individuals (OEPI), 

and special election periods (SEP) are 

codified in regulation at § 422.68. For 

Part D plans, section 1860D– 

1(b)(1)(B)(iv) of the Act directs us to 

establish similar rules for effective dates 

of elections and changes of elections to 

those provided under the MA program 

statute at section 1851(f). In the January 

2005 Part D final rule, we specified the 

effective dates for elections and changes 

of elections of Part D coverage made 

during various specified enrollment 

periods (70 FR 4193). The effective date 

requirements for the initial enrollment 

period (IEP) for Part D, AEP, and SEPs 

are codified in regulation at § 423.40. 

Existing regulations at §§ 422.68 and 

423.40 do not address what the MA 

organization or Part D plan sponsor 

should do when a beneficiary is eligible 

for more than one election period, thus 

resulting in more than one possible 

effective date for their election choice. 

For example, the beneficiary is eligible 

to make a change in their election 

choice during the MA–OEP, but they are 

also eligible for an SEP due to changes 

in the individual’s circumstances. 

Current sub-regulatory guidance 

provides that the MA organization or 

Part D plan sponsor determine the 

proper effective date based on the 

election period for which the 

beneficiary is eligible before the 

enrollment or disenrollment may be 

transmitted to CMS.126 Because the 

election period determines the effective 

date of the election in most instances, 

with the exception of some SEPs or 

when election periods overlap, 

beneficiaries may not request their 

election effective date. The MA 

organization or Part D plan sponsor 

determines the effective date once the 

election period is identified. If a 

beneficiary is eligible for more than one 

election period, which results in more 

than one possible effective date, CMS’s 

sub-regulatory guidance 127 directs the 

MA organization or Part D plan sponsor 

to allow the beneficiary to choose the 

election period that results in the 

desired effective date. To determine the 

beneficiary’s choice of election period, 

MA organizations and Part D plan 

sponsors are instructed to attempt to 

contact the beneficiary, and to 

document their attempt(s). However, 

sub-regulatory guidance 128 states that 

this does not apply to beneficiary 

requests for enrollment into an 

employer or union group health plan 

(EGHP) using the group enrollment 


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129This guidance on effective dates of elections 

is currently outlined in section 30.6 of chapter 2 of 

the Medicare Managed Care Manual. 

130This guidance on effective dates of elections 

is currently outlined in section 30.4 of chapter 3 of 

the Medicare Prescription Drug Benefit Manual. 

131This guidance can be found in sections 30.6 

and 30.7 of chapter 2 of the Medicare Managed Care 

Manual and sections 30.4 and 30.5 of chapter 3 of 

the Medicare Prescription Drug Benefit Manual. 

mechanism. Beneficiaries who make an 

election via the employer or union 

election process will be assigned an 

effective date according to the SEP 

EGHP, unless the beneficiary requests a 

different effective date that is allowed 

by one of the other election periods for 

which they are eligible. 

Because a beneficiary must be entitled 

to Medicare Part A and enrolled in 

Medicare Part B in order to be eligible 

to receive coverage under a MA or MA– 

PD plan, CMS’s sub-regulatory 

guidance 129 explains that if one of the 

election periods for which the 

beneficiary is eligible is the ICEP, the 

beneficiary may not choose an effective 

date any earlier than the month of 

entitlement to Part A and enrollment in 

Part B. Likewise, because a beneficiary 

must be entitled to Part A or enrolled in 

Part B in order to be eligible for 

coverage under a Part D plan, subregulatory guidance explains that if one 

of the election periods for which the 

beneficiary is eligible is the Part D IEP, 

the beneficiary may not choose an 

effective date any earlier than the month 

of entitlement to Part A and/or 

enrollment in Part B.130

Furthermore, sub-regulatory 

guidance 131 provides that if a 

beneficiary is eligible for more than one 

election period and does not choose 

which election period to use, and the 

MA organization or Part D plan sponsor 

is unable to contact the beneficiary, the 

MA organization or Part D plan sponsor 

assigns an election period for the 

beneficiary using the following ranking 

of election periods (1 = Highest, 5 = 

Lowest): (1) ICEP/Part D IEP, (2) MA– 

OEP, (3) SEP, (4) AEP, and (5) OEPI. The 

election period with the highest rank 

generally determines the effective date 

of enrollment. In addition, if an MA 

organization or Part D sponsor receives 

a disenrollment request when more than 

one election period applies, the plan is 

instructed to allow the beneficiary to 

choose which election period to use. If 

the beneficiary does not make a choice, 

then the plan is directed to assign the 

election period that results in the 

earliest disenrollment. 

To provide transparency and stability 

about the MA and Part D program for 

plans, beneficiaries, and other interested 

parties, we are proposing at new 

§§ 422.68(g) and 423.40(f) that if the MA 

organization or Part D plan sponsor 

receives an enrollment or disenrollment 

request, determines the beneficiary is 

eligible for more than one election 

period and the election periods allow 

for more than one effective date, the MA 

organization or Part D plan sponsor 

must allow the beneficiary to choose the 

election period that results in the 

desired effective date. We also propose 

at §§ 422.68(g)(1) and 423.40(f)(1) that 

the MA organization or Part D plan 

sponsor must attempt to contact the 

beneficiary, and must document its 

attempt(s), to determine the 

beneficiary’s choice. The plan may 

contact the beneficiary by phone, in 

writing, or any other communication 

mechanism. Plans would annotate the 

outcome of the contact(s) and retain the 

record as part of the individual’s 

enrollment or disenrollment request. In 

addition, we propose at §§ 422.68(g)(2) 

and 423.40(f)(2) to require that the MA 

organization or Part D plan sponsor 

must use the proposed ranking of 

election periods to assign an election 

period if the beneficiary does not make 

a choice. With the exception of the SEP 

EGHP noted earlier, if a beneficiary is 

simultaneously eligible for more than 

one SEP and they do not make a choice, 

and the MA organization or PDP 

sponsor is unable to obtain the 

beneficiary’s desired enrollment 

effective date, the MA organization or 

PDP sponsor should assign the SEP that 

results in an effective date of the first of 

the month after the enrollment request 

is received by the plan. Finally, we 

propose at §§ 422.68(g)(3) and 

423.40(f)(3) to require that if the MA 

organization or Part D plan sponsor is 

unable to obtain the beneficiary’s 

desired disenrollment effective date, 

they must assign an election period that 

results in the earliest disenrollment. 

This proposal represents the 

codification of longstanding MA and 

Part D sub-regulatory guidance. Based 

on infrequent complaints and questions 

from plans and beneficiaries related to 

current guidance, we conclude that the 

guidance has been previously 

implemented and is currently being 

followed by plans. There is no 

additional paperwork burden associated 

with codifying this longstanding subregulatory policy, and there is also no 

impact to the Medicare Trust Fund. All 

information impacts related to the 

current process for determining a 

beneficiary’s eligibility for an election 

period and processing election requests 

have already been accounted for under 

OMB control number 0938–0753 (CMS– 

R–267) for Part C and 0938–0964 (CMS– 

10141) for Part D. 

VI. Medicare Advantage/Part C and 

Part D Prescription Drug Plan 

Marketing and Communications 

A. Marketing and Communications 

Requirements for Special Supplemental 

Benefits for the Chronically Ill (SSBCI) 

(§ 422.2267) 

Section 1851(h) and (j) of the Act 

provide a structural framework for how 

MA organizations may market to 

beneficiaries and direct CMS to set 

standards related to the review of 

marketing materials and establish 

limitations on marketing activities, as 

part of the standards for carrying out the 

MA program under section 1856(b) of 

the Act. In the Medicare and Medicaid 

Programs; Contract Year 2022 Policy 

and Technical Changes to the Medicare 

Advantage Program, Medicare 

Prescription Drug Benefit Program, 

Medicaid Program, Medicare Cost Plan 

Program, and Programs of All-Inclusive 

Care for the Elderly final rule 

(hereinafter referred to as the January 

2021 final rule), CMS used this statutory 

authority to codify guidance from the 

Medicare Communications & Marketing 

Guidelines (MCMG) into subpart V of 

part 422. Several commenters in that 

prior rulemaking urged CMS to add 

specific provisions in the marketing and 

communications regulations regarding 

how MA organizations may market 

SSBCI described in § 422.102(f). In 

response, CMS established a new 

requirement for a disclaimer to be used 

when SSBCI are mentioned. The SSBCI 

disclaimer was originally codified at 

§ 422.2267(e)(32), and it currently 

appears at paragraph (e)(34). Currently, 

that regulation requires MA 

organizations to: (i) convey that the 

benefits mentioned are a part of special 

supplemental benefits, (ii) convey that 

not all members will qualify for these 

benefits; and (iii) include the model 

content in the material copy which 

mentions SSBCI benefits. Section 

422.2267(e)(34) does not explicitly state 

that it applies to both marketing and 

communications materials, but our subregulatory guidance is clear that it 

applies whenever SSBCI are mentioned; 

the disclaimer is required regardless of 

whether the material that mentions the 

benefits is a marketing or 

communications material. The purpose 

of the SSBCI disclaimer is to ensure that 

beneficiaries are aware that SSBCI are 

not available to all plan enrollees and 

that the eligibility for these benefits is 

limited by section 1852(a)(3)(D) of the 

Act and § 422.102(f). Ensuring a clear 

statement of these limitations in a 


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132https://content.naic.org/sites/default/files/

State%20MA%20Marketing%20Authority%20

Senate%20Letter%20.pdf. 

133See Medicare Program; Contract Year 2023 

Policy and Technical Changes to the Medicare 

Advantage and Medicare Prescription Drug Benefit 

Programs; Policy and Regulatory Revisions in 

Response to the COVID–19 Public Health 

Emergency; Additional Policy and Regulatory 

Revisions in Response to the COVID–19 Public 

Health Emergency final rule (87 FR 27704, May 9, 

2022). 

disclaimer guards against beneficiary 

confusion or misunderstanding of the 

scope of SSBCI, and thus lessens the 

chance that a beneficiary will enroll in 

a certain plan believing they can access 

that plan’s SSBCI for which they may 

not ultimately be eligible. 

Per the January 2021 final rule, MA 

organizations were required to comply 

with the new SSBCI disclaimer 

requirement beginning January 1, 2022. 

Since MA organizations have had over 

a year to implement their use of the 

SSBCI disclaimer, we are taking an 

opportunity to reevaluate the 

requirement at § 422.2267(e)(34), 

considering our observation of its actual 

implementation. 

MA organizations market SSBCI by 

advertising various benefits, including 

coverage of groceries, pest control, 

prepared meals, household items, 

gasoline, utility bills, auto repair, pet 

supplies or grooming, and more. 

Although some of these benefits may be 

available under a given plan, the 

enrollee must meet the criteria 

established to receive a particular 

SSBCI. In many instances, MA 

organizations have been found to use 

marketing to potentially misrepresent 

the benefit offered, oftentimes not 

presenting a clear picture of the benefit 

and limits on eligibility. In a May 2022 

letter sent to Congress, the National 

Association of Insurance Commissioners 

(NAIC) detailed its findings from 

surveys with State departments of 

insurance, showing ‘‘an increase in 

complaints from seniors about 

confusing, misleading and potentially 

deceptive advertising and marketing of 

these plans.’’ 132 Additionally, as 

discussed in prior rulemaking, CMS has 

seen an increase in complaints related 

to marketing, with more than twice as 

many complaints related to marketing in 

2021 compared to 2020.133 As 

evidenced by complaints CMS has 

received, some of the current marketing 

of SSBCI has the potential to give 

beneficiaries the wrong impression by 

leading them to believe they can 

automatically receive all SSBCI 

available by enrolling in the plan. 

CMS has seen multiple examples of 

such misleading SSBCI advertisements 

among MA organizations. We have seen 

ads (for example, online, billboards, 

television) in which the MA 

organization presents an extensive list 

of benefits that are available, with this 

list being displayed prominently in 

large font and the SSBCI disclaimer 

appearing in very small font at the end 

of the ad. Often the disclaimer is brief, 

merely stating that the enrollee must 

have one of the identified chronic 

conditions in order to receive the 

benefit and that eligibility will be 

determined after enrollment, with no 

other information provided. A 

beneficiary reading such an ad could 

easily miss the small-size disclaimer at 

the end because their attention is 

immediately drawn to the long, 

attractive list of appealing benefits 

prominently displayed in large, bold 

font. This type of SSBCI marketing is 

potentially misleading because, at face 

value, it might appear to a beneficiary 

that if they enroll in the advertised plan, 

they can receive all the highlighted 

benefits, without any question as to the 

beneficiary’s eligibility, what an 

eligibility determination entails, or 

when eligibility is assessed. 

Based on our findings, we propose to 

expand the current required SSBCI 

disclaimer to include more specific 

requirements, with the intention of 

increasing transparency for beneficiaries 

and decreasing misleading advertising 

by MA organizations. Our proposed 

expansion of the SSBCI disclaimer 

would clarify what must occur for an 

enrollee to be eligible for the SSBCI. 

That is, per § 422.102(f), the enrollee 

must first have the required chronic 

condition(s), then they must meet the 

definition of a ‘‘chronically ill enrollee’’ 

at § 422.102(f)(1)(i)(A), and finally the 

MA organization must determine that 

the enrollee is eligible to receive a 

particular SSBCI under the plan’s 

coverage criteria. An MA organization 

designs and limits its SSBCI to target 

specific chronic conditions. An enrollee 

might meet the definition of 

‘‘chronically ill enrollee’’ but 

nonetheless be ineligible for the MA 

organization’s advertised SSBCI because 

they do not have the specific chronic 

condition(s) required for the particular 

SSBCI being advertised. Taking these 

important SSBCI eligibility 

requirements into account, our proposal 

amends the required SSBCI disclaimer 

content to clearly communicate the 

eligibility parameters to beneficiaries 

without misleading them. Specifically, 

at § 422.2267(e)(34), we are proposing 

three key changes to the regulation and 

two clarifications. 

First, we are proposing to redesignate 

current paragraph (e)(34)(ii) as 

paragraph (e)(34)(iii) and add a new 

paragraph (e)(34)(ii), in which we 

propose to require MA organizations 

offering SSBCI to list, in their SSBCI 

disclaimer, the chronic condition or 

conditions the enrollee must have to be 

eligible for the SSBCI offered by the MA 

organization. Per § 422.102(f)(1)(i)(A), a 

‘‘chronically ill enrollee’’ must have one 

or more comorbid and medically 

complex chronic conditions to be 

eligible for SSBCI. (See section IV.B. of 

this proposed rule for a more detailed 

discussion of the definition of 

‘‘chronically ill enrollee’’ and eligibility 

for SSBCI as part of our proposal to 

strengthen the requirements for how 

determinations are made that a 

particular item or service may be offered 

as SSBCI and eligibility determinations 

for SSBCI.) We are proposing that if the 

number of condition(s) is five or fewer, 

then the SSBCI disclaimer must list all 

condition(s), and if the number of 

conditions is more than five, then the 

SSBCI disclaimer must list the top five 

conditions, as determined by the MA 

organization. For this top five list, we 

are proposing it is the MA 

organization’s discretion as to which 

five conditions to include. In making 

this determination, an MA organization 

might consider factors such as which 

conditions are more common or less 

obscure among the enrollee population 

the MA organization intends to serve. 

We believe that five is a reasonable 

number of conditions for the MA 

organization to list, so that a beneficiary 

may have an idea of the types of 

conditions that may be considered for 

eligibility for the SSBCI, without listing 

so many conditions that a beneficiary 

ignores the information. 

Second, we propose to revise newly 

redesignated paragraph (e)(34)(iii). 

Section 422.2267(e)(34)(ii) currently 

requires that MA organizations that offer 

SSBCI convey that not all members will 

qualify. We are proposing to expand this 

provision to require that the MA 

organization must convey in its SSBCI 

disclaimer that even if the enrollee has 

a listed chronic condition, the enrollee 

may not receive the benefit because 

coverage of the item or service depends 

on the enrollee being a ‘‘chronically ill 

enrollee’’ as defined in 

§ 422.102(f)(1)(i)(A) and on the MA 

organization’s coverage criteria for a 

specific SSBCI item or service required 

by § 422.102(f)(4). Section 1852(a)(3)(D) 

of the Act and § 422.102(f) provide that 

SSBCI are a permissible category of MA 

supplemental benefits only for a 

‘‘chronically ill enrollee,’’ as that term is 

specifically defined, and the item or 

service must have a reasonable 

expectation of improving or maintaining 


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the health or overall function of the 

chronically ill enrollee. In other words, 

just because an enrollee has one of the 

conditions listed in the SSBCI 

disclaimer, it does not automatically 

mean that they are eligible to receive the 

relevant SSBCI, as other criteria will 

also need to be met. In addition, a 

particular item or service must meet the 

requirements in § 422.102(f)(1)(ii) to be 

offered as an SSBCI. Likewise, if the 

requirements we are proposing to add to 

§ 422.102(f) for the item or service to be 

covered as an SSBCI are finalized, an 

MA organization would also need to 

meet those requirements to offer SSBCI 

(see section IV.B. of this proposed rule). 

Determinations on whether an MA 

organization may offer coverage of a 

particular item or service as an SSBCI 

will generally be made before an MA 

organization begins marketing or 

communicating the benefits, therefore, 

we are not including those requirements 

from the proposal in section IV.B. of this 

proposed rule in the proposed 

expansion of the SSBCI disclaimer. Our 

proposed newly redesignated 

§ 422.2267(e)(34)(iii) refers to the 

eligibility requirements and MA 

organization responsibilities in 

§ 422.102(f) because we expect the MA 

organization to use this information in 

developing their SSBCI disclaimer to 

clearly convey that not all enrollees 

with the required condition(s) will be 

eligible to receive the SSBCI. Per 

§ 422.102(f) currently and with the 

revisions proposed in section IV.B. of 

this proposed rule, MA organizations 

offering SSBCI must have written 

policies based on objective criteria for 

determining a chronically ill enrollee’s 

eligibility to receive a particular SSBCI. 

The SSBCI disclaimer is model 

content, so each MA organization may 

tailor their disclaimer’s language to 

convey that, in addition to having an 

eligible chronic condition, the enrollee 

must also meet other eligibility 

requirements (that is, the definition of a 

‘‘chronically ill enrollee’’ and the 

coverage criteria of the MA organization 

for a specific SSBCI item or service) in 

order to receive the SSBCI. MA 

organizations would not need to 

specifically detail the additional 

eligibility requirements (such as the 

coverage criteria) in the disclaimer, but 

rather convey that coverage is 

dependent on additional factors, not 

only on the fact that the enrollee has an 

eligible chronic condition. For example, 

an MA organization might use the 

following language in its SSBCI 

disclaimer: ‘‘Eligibility for this benefit 

cannot be guaranteed based solely on 

your condition. All applicable eligibility 

requirements must be met before the 

benefit is provided. For details, please 

contact us.’’ We are providing this 

language as an example, as the SSBCI 

disclaimer is model content. Therefore, 

in developing their SSBCI disclaimer, 

MA organizations may deviate from the 

model so long as they accurately convey 

the required information and follow 

CMS’s specified order of content, if 

specified (§ 422.2267(c)). Currently, 

§ 422.2267(e)(34) does not specify the 

order of content for the SSBCI 

disclaimer, and we are not proposing to 

add such a requirement; however, MA 

organizations must accurately convey 

the required information listed in the 

proposed regulatory text at 

§ 422.2267(e)(34)(i) through (iii) in their 

SSBCI disclaimer. In addition, the 

disclaimer as drafted by the MA 

organization must be clear, accurate, 

and comply with all applicable rules on 

marketing, communications, and the 

standards for required materials and 

content at § 422.2267(a). 

Third, at new proposed paragraph 

(e)(34)(iv), we are proposing specific 

formatting requirements for MA 

organizations’ SSBCI disclaimers in ads, 

related to font and reading pace. These 

proposed formatting requirements 

would apply to SSBCI disclaimers in 

any type of ad, whether marketing or 

communications. For print ads, we 

reiterate our existing requirement under 

paragraph (a)(1) that MA organizations 

must display the disclaimer in 12-point 

font, Times New Roman or equivalent. 

For television, online, social media, 

radio, or other-voice-based ads, we 

propose that MA organizations must 

either: (1) read the disclaimer at the 

same pace as the organization does for 

the phone number or other contact 

information mentioned in the ad, or (2) 

display the disclaimer in the same font 

size as the phone number or other 

contact information mentioned in the 

ad. For outdoor advertising (ODA)— 

which is defined in § 422.2260 and 

includes billboards—we propose that 

MA organizations must display the 

disclaimer in the same font size as the 

phone number or other contact 

information appearing on the billboard 

or other ODA. The specific font and 

reading pace requirements for the SSBCI 

disclaimer in ads would appear at new 

proposed paragraphs (e)(34)(iv)(A) and 

(B). 

Finally, in revisiting the requirement 

at § 422.2267(e)(34), we believe 

additional clarification of current 

requirements is appropriate. In the 

introductory language at paragraph 

(e)(34), we propose a minor addition to 

clarify that the SSBCI disclaimer must 

be used by MA organizations who offer 

CMS-approved SSBCI (as specified in 

§ 422.102(f)). Also, current paragraph 

(e)(34)(iii) (requiring the MA 

organization to include the SSBCI 

disclaimer in the material copy which 

mentions SSBCI benefits) would be 

revised and moved to new proposed 

paragraph (e)(34)(v). In this newly 

redesignated paragraph (e)(34)(v), we 

propose to clarify that MA organizations 

must include the SSBCI disclaimer in 

all marketing and communications 

materials that mention SSBCI. We also 

propose a slight adjustment in this 

paragraph to delete the redundant word 

‘‘benefits’’ after ‘‘SSBCI.’’ 

In summary, this proposal would 

expand upon the current SSBCI 

disclaimer requirements at 

§ 422.2267(e)(34) in several important 

ways. Requiring a more robust 

disclaimer with specific conditions 

listed would provide beneficiaries with 

more information to determine whether 

a particular plan with SSBCI is 

appropriate for their needs. We believe 

the revised disclaimer would diminish 

the ambiguity of when SSBCI are 

covered, thus reducing the potential for 

misleading information or misleading 

advertising. Our goal is to ensure that 

beneficiaries enrolling in MA choose a 

plan that best meets their health care 

needs. Transparency and precision in 

marketing and communications to 

current and potential enrollees is of 

utmost importance in this proposal. 

We are not scoring this provision in 

the COI section since we believe all 

burden impacts of this provision have 

already been accounted for under OMB 

control number 0938–1051 (CMS– 

10260). In addition, this provision is not 

expected to have any economic impact 

on the Medicare Trust Fund. We 

welcome comment on our proposed 

amendments to § 422.2267(e)(34), and 

we thank commenters in advance for 

their feedback. 

B. Agent Broker Compensation 

Pursuant to section 1851(j)(2)(D) of 

the Act, the Secretary has a statutory 

obligation to establish guidelines to 

ensure that the use of agent and broker 

compensation creates incentives for 

agents and brokers to enroll individuals 

in the Medicare Advantage (MA) plan 

that is intended to best meet 

beneficiaries’ health care needs. In 

September 2008, CMS published the 

‘‘Medicare Program; Revisions to the 

Medicare Advantage and Prescription 

Drug Benefit Programs’’ interim final 

rule (73 FR 54226, 54237), our first 

regulation to establish requirements for 

agent and broker compensation, which 

included certain limitations on agent 

and broker compensation and other 


ddrumheller on DSK120RN23PROD with PROPOSALS2
78552 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

134https://www.cms.gov/medicare/enrollmentrenewal/managed-care-eligibility-enrollment/agentbroker-compensation. 

safeguards. In that rulemaking, we noted 

that these reforms addressed concerns 

that the previously permitted 

compensation structure resulted in 

financial incentives for agents to only 

market and enroll beneficiaries in some 

plan products and not others due to 

larger commissions. These incentives 

potentially resulted in beneficiaries 

being directed towards plans that were 

not best suited to their needs. 

In that interim final rule, we noted 

that depending on the circumstances, 

agent and broker relationships can be 

problematic under the Federal antikickback statute if they involve, by way 

of example only, compensation in 

excess of fair market value, 

compensation structures tied to the 

health status of the beneficiary (for 

example, cherry-picking), or 

compensation that varies based on the 

attainment of certain enrollment targets. 

These and other fraud and abuse risks 

exist among the current agent and 

broker relationships. We note that the 

HHS Office of the Inspector General 

(OIG) advisory opinion process is 

available to parties seeking OIG’s 

opinion as to the legality of a particular 

arrangement. Information about this 

process remains available on the OIG’s 

website at http://oig.hhs.gov/ 

compliance/advisory-opinions/process/. 

In subsequent years, agents and 

brokers have become an integral part of 

the industry, helping millions of 

Medicare beneficiaries to learn about 

and enroll in Medicare, MA plans, and 

PDPs by providing expert guidance on 

plan options in their local area, while 

assisting with everything from 

comparing costs and coverage to 

applying for financial assistance. CMS 

has also adopted updates to the agent 

and broker compensation requirements. 

It has become apparent that shifts in the 

MA industry and resulting changes in 

contract terms offered to agents and 

brokers for enrollment-related services 

and expenses, warrant further action to 

ensure CMS is complying with its 

statutory requirement to ensure 

compensation paid to agents and 

brokers incentivizes them to enroll 

individuals in the MA plan that is 

intended to best meet their health care 

needs. 

CMS has observed that the MA 

marketplace, nationwide, has become 

increasingly consolidated among a few 

large national parent organizations, 

which presumably have greater capital 

to expend on sales, marketing, and other 

incentives and bonus payments to 

agents and brokers than smaller market 

MA plans. This provides a greater 

opportunity for these larger 

organizations, either directly or through 

third parties, to use financial incentives 

outside and potentially in violation of 

the compensation cap set by CMS to 

encourage agents and brokers to enroll 

individuals in their plan over a 

competitor’s plans. For example, CMS 

has seen web-based advertisements for 

agents and brokers to work with or sell 

particular plans where the agents and 

brokers are offered bonuses and perks 

(such as golf parties, trips, and extra 

cash) in exchange for enrollments. 

These payments, while being presented 

to the agents and brokers as innocuous 

bonuses or incentives, are implemented 

in such a way that allows the plan 

sponsor, in most cases, to credibly 

account for these anti-competitive 

payments as ‘‘administrative’’ rather 

than ‘‘compensation,’’ and these 

payments are therefore not limited by 

the regulatory limits on compensation. 

CMS has also received complaints 

from a host of different organizations, 

including State partners, beneficiary 

advocacy organizations, and MA plans. 

A common thread to the complaints is 

that agents and brokers are being paid, 

typically through various purported 

administrative and other add-on 

payments, amounts that cumulatively 

exceed the maximum compensation 

allowed under the current regulations. 

Moreover, CMS has observed that such 

payments have created an environment, 

not dissimilar to what prompted CMS to 

engage in the original agent and broker 

compensation requirements in 2008, 

where the amounts being paid for 

activities that do not fall under the 

umbrella of ‘‘compensation,’’ are rapidly 

increasing. The result is that agents and 

brokers are presented with a new suite 

of questionable financial incentives that 

are likely to influence which MA plan 

an agent encourages a beneficiary to 

select during enrollment. 

We believe these financial incentives 

are contributing to behaviors that are 

driving an increase in MA marketing 

complaints received by CMS in recent 

years. As was discussed in our most 

recent Medicare Program Contract Year 

2023 Rule, based on the most recent 

data available at that time, in 2021, CMS 

received more than twice the number of 

beneficiary complaints related to 

marketing of MA plans compared to 

2020, and for some states those numbers 

were much higher (87 FR 27704, 27704– 

27902). These complaints are typically 

filed by enrollees or their caregivers 

with CMS through 1–800–Medicare or 

CMS regional offices, and generally 

allege that a beneficiary was encouraged 

or pressured to join an MA plan, and 

that once enrolled, the plan was not 

what the enrollee expected or what was 

explained to them when they spoke to 

an agent or broker. 

In the Contract Year 2024 Policy and 

Technical Changes to the Medicare 

Advantage Program, Medicare 

Prescription Drug Benefit Program, 

Medicare Cost Plan Program, and 

Programs of All-Inclusive Care for the 

Elderly final rule (88 FR 22234–22256), 

which appeared in the Federal Register 

on April 12, 2023, we discussed at 

length the rapidly increasing use of 

various marketing activities that 

typically result in beneficiaries being 

connected with agents and brokers to be 

enrolled in MA plans. Based on a 

number of complaints CMS reviewed, as 

well as audio recordings of sale calls, it 

appears that the increased marketing of 

1–800 numbers to facilitate enrollment 

in Medicare Advantage plans through 

national television advertisements 

combined with the subsequent actions 

of agents and brokers when beneficiaries 

responded to those ads resulted in 

beneficiary confusion. In some 

instances, through listening to the call 

recording, CMS observed that when 

beneficiaries reached an agent or broker 

in response to these television ads, the 

beneficiary was often pressured by the 

agent or broker to continue with a plan 

enrollment even though the beneficiary 

was clearly confused. 

At the same time, these types of 

complaints have escalated at a pace that 

mirrors the growth of administrative or 

add-on payments, which we contend are 

being misused as a means to 

compensate over and above the CMS-set 

compensation limits on payment to 

agents and brokers. We also note that 

such payments appear to have no 

regional correlation, that is, they are 

generated across the country.134 CMS is 

concerned that when the value of 

administrative payments offered to 

agents and brokers reaches the levels 

that CMS has observed in recent years, 

these payments may distort the process 

that agents and brokers are expected to 

engage in when they assist beneficiaries 

in weighing the merits of different 

available plans. This distortion 

disadvantages beneficiaries who enroll 

in a plan based on the recommendation 

or encouragement of an agent or broker 

who may be influenced by how much or 

what kind of administrative payment 

the agent or broker expects to receive, 

rather than enrolling the beneficiary in 

a plan that is intended to best meet the 

beneficiary’s health care needs. 

Consequently, the rise in MA 

marketing complaints noted above 


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Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78553 

135Levinson, Daniel R, BENEFICIARIES REMAIN 

VULNERABLE TO SALES AGENTS’ MARKETING 

OF MEDICARE ADVANTAGE PLANS (March 

2010); https://oig.hhs.gov/oei/reports/oei-05-09- 

00070.pdf. 

suggests that agents and brokers are 

being influenced to engage in high 

pressure tactics, which may in turn 

cause beneficiary confusion about their 

enrollment choices, to meet enrollment 

targets or earn ‘‘administrative 

payments’’ in excess of their 

compensation payment. Although 

CMS’s existing regulations already 

prohibit plans, and by extension their 

agents and brokers, from engaging in 

misleading or confusing 

communications with current or 

potential enrollees, additional 

limitations on payments to agents and 

brokers may be necessary to adequately 

address the rise in MA marketing 

complaints described here. 

Additionally, while the proposals 

described in this proposed rule are 

focused on payments and compensation 

made to agents and brokers, CMS is also 

concerned about how payments from 

MA plans to third party marketing 

organizations (TPMOs) may further 

influence or obscure the activities of 

agent and brokers. In particular, CMS is 

interested in the effect of payments 

made to Field Marketing Organizations 

(FMOs), which is a type of TPMO that 

employs agents and brokers to complete 

MA enrollment activities and may also 

conduct additional marketing activities 

on behalf of MA plans, such as lead 

generating and advertising. In fact, at 

the time of our first agent and broker 

compensation regulation, CMS 

expressed concern about amounts paid 

to FMOs for services that do not 

necessarily relate directly to 

enrollments completed by the agent or 

broker who deals directly with the 

beneficiary (73 FR 54239). Some 

examples of such services are training, 

material development, customer service, 

direct mail, and agent recruitment. 

As we noted in the preamble to the 

two interim final rules published in 

2008 (73 FR 67406 and 73 FR 54226), 

all parties should be mindful that their 

compensation arrangements, including 

arrangements with FMOs and other 

similar type entities, must comply with 

the fraud and abuse laws, including the 

Federal anti-kickback statute. Beginning 

as early as 2010, an OIG report indicated 

that ‘‘plan sponsors may have created 

financial incentives that could lead 

FMOs to encourage sales agents to 

enroll Medicare beneficiaries in plans 

that do not meet their health care needs. 

Because FMOs, like sales agents, may 

influence Medicare beneficiaries’ 

enrollment in MA plans, CMS should 

issue additional regulations more 

clearly defining how and how much 

FMOs should be paid for their 

services.’’ 135 In the time since CMS first 

began to regulate agent and broker 

compensation, we have seen the FMO 

landscape change from mostly small 

regionally-based companies to a largely 

consolidated group of large national 

private equity-backed or publicly-traded 

companies. 

We have also observed that, similar to 

the additional payments made to agents 

and brokers, there has been a steep 

increase in administrative payments 

made to FMOs by MA organizations. 

Likewise, CMS is concerned that these 

quick increases in fees have resulted in 

a ‘‘bidding war’’ among plans to secure 

anti-competitive contract terms with 

FMOs and their affiliated agents and 

brokers. If left unaddressed, such 

bidding wars will continue to escalate 

with anti-competitive results, as 

smaller, local or regional plans that are 

unable to pay exorbitant fees to FMOs 

risk losing enrollees to larger, national 

plans who can. In addition to comments 

on our proposals here to help us 

develop additional regulatory action, we 

specifically request comments regarding 

how CMS can further ensure that 

payments made by MA plans to FMOs 

do not undercut the intended outcome 

of the agent and broker compensation 

proposals included in this proposed 

rule. 

Finally, in addition to the undue 

influence that perks, add-on payments, 

volume bonuses and other financial 

incentives paid by MA organizations to 

FMOs may have on agents and brokers, 

they also create a situation where there 

is an unlevel playing field among plans. 

Larger, national plans are more able to 

shoulder the added costs being paid as 

compared to smaller, more locally based 

MA plans. Furthermore, we have 

received reports that some larger FMOs 

are more likely to contract with national 

plans, negatively impacting 

competition. On July 9, 2021, President 

Biden issued Executive Order (E.O.) 

14036: ‘‘Promoting Competition in the 

American Economy’’ (hereinafter 

referred to as E.O. 14036). E.O. 14036 

describes the Administration’s policy 

goals to promote a fair, open, 

competitive marketplace, and directs 

the U.S. Department of Health and 

Human Services to consider policies 

that ensure Americans can choose 

health insurance plans that meet their 

needs and compare plan offerings, 

furthering competition and consumer 

choice. The proposed regulatory 

changes included here also aim to deter 

anti-competitive practices engaged in by 

MA organizations, agents, brokers, and 

TPMOs that prevent beneficiaries from 

exercising fully informed choice and 

limit competition in the Medicare plan 

marketplace among Traditional 

Medicare, MA plans, and Medigap 

plans. 

In this proposed rule we are focusing 

on current payment structures among 

MA organizations, agents, brokers, and 

TMPOs, specifically FMOs, that may 

incentivize agents or brokers to 

emphasize or prioritize one plan over 

another, irrespective of the beneficiary’s 

needs, leading to enrollment in a plan 

that does not best fit the beneficiary’s 

needs and a distortion of the 

competitive process. 

As noted above, section 1851(j)(2)(D) 

and 1851(h)(4)(D) of the Social Security 

Act directs the Secretary to set limits on 

compensation rates to ‘‘ensure that the 

use of compensation creates incentives 

for agents and brokers to enroll 

individuals in the Medicare Advantage 

plan that is intended to best meet their 

health care needs,’’ and that the 

Secretary ‘‘shall only permit a Medicare 

Advantage organization (and the agents, 

brokers, and other third parties 

representing such organization) to 

conduct the activities described in 

subsection (j)(2) in accordance with the 

limitations established under such 

subsection.’’ 

Our regulations at § 422.2274 set out 

limitations regarding various types of 

payments and compensation that may 

be paid to agents, brokers, and third 

parties who represent MA organizations. 

Each of these limitations is intended to 

better align the professional incentives 

of the agents and brokers with the 

interests of the Medicare beneficiaries 

they serve. Our regulations specify 

maximum compensation amounts that 

may be paid to agents and brokers for 

initial enrollment and renewals. The 

regulations also allow for payment to 

agents and brokers for administrative 

costs such as training and operational 

overhead, as long as the payments are at 

or below the value of those services in 

the marketplace. The maximum 

compensation for initial and renewal 

enrollments and the requirement that 

administrative payments reflect fair 

market value for actual administrative 

services are intended to ensure 

incentives for agents and brokers to help 

enroll beneficiaries into MA plans that 

best meet their health care needs. 

However, while CMS has 

affirmatively stated the types of 

allowable payment arrangements and 

the parameters for those payments in 

regulations at § 422.2274, some recent 

studies suggest that MA plans offer 


ddrumheller on DSK120RN23PROD with PROPOSALS2
78554 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

136The Commonwealth Fund, The Challenges of 

Choosing Medicare Coverage: Views from Insurance 

Brokers and Agents (Feb. 28, 2023); https://

www.commonwealthfund.org/publications/2023/ 

feb/challenges-choosing-medicare-coverage-viewsinsurance-brokers-agents. 

137The Commonwealth Fund, The Challenges of 

Choosing Medicare Coverage: Views from Insurance 

Brokers and Agents (Feb. 28, 2023); https://

www.commonwealthfund.org/publications/2023/ 

feb/challenges-choosing-medicare-coverage-viewsinsurance-brokers-agents. 

additional or alternative incentives to 

agents and brokers, often through third 

parties such as FMOs, to prioritize 

enrollment into some plans over others 

These incentives are both explicit (in 

the form of higher payments 

purportedly for administrative services) 

and implicit (such as in the case of 

passing on leads, as discussed 

below).136

As previously mentioned, we believe 

payments categorized by MA 

organizations as ‘‘administrative 

expenses,’’ paid by MA organizations to 

agents and brokers, have significantly 

outpaced the market rates for similar 

services provided in non-MA markets, 

such as Traditional Medicare with 

Medigap. This is based on information 

shared by insurance associations and 

focus groups and published in research 

articles by groups such as the 

Commonwealth Fund, which found that 

‘‘most brokers and agents in the focus 

groups recalled receiving higher 

commissions [total payments, including 

commission and administrative 

payments]—sometimes much higher— 

for enrolling people in Medicare 

Advantage plans compared to 

Medigap.’’ 137

Similarly, some MA organizations are 

paying for things such as travel or 

operational overhead on a ‘‘per 

enrollment’’ basis, resulting in instances 

where an agent or broker may be paid 

multiple times for the same, one-time 

expense, if the agent incurring the 

expense happened to enroll more than 

one beneficiary into the plan making the 

payment. For example, an agent could 

be reimbursed for the cost of traveling 

to an event where that agent enrolls a 

beneficiary into an MA plan; if the cost 

of travel is paid on a ‘‘per enrollment’’ 

basis, the agent would be reimbursed 

the price of the trip multiplied by the 

number of enrollments the agent 

facilitated while at that event. In this 

scenario, whichever MA organization 

reimburses for travel at the highest rates 

would effectively be offering a higher 

commission per enrollee. This would 

inherently create a conflict of interest 

for the agent. As the Secretary must 

‘‘ensure that the use of compensation 

creates incentives for agents and brokers 

to enroll individuals in the Medicare 

Advantage plan that is intended to best 

meet their health care needs,’’ we 

believe this type of conflict must be 

addressed. 

We are also concerned that other 

activities undertaken by a TPMO, as a 

part of their business relationships with 

MA organizations, may influence the 

plan choices offered or how plan 

choices are presented by the agent or 

broker to a prospective enrollee. For 

example, we have learned of 

arrangements where an entity, such as 

an FMO, provides an MA organization 

with both marketing and brokering 

services. As part of the arrangement, the 

MA organization pays the FMO for leads 

generated by the FMO and then the 

leads are given directly to the FMO’s 

agents instead of to the MA organization 

itself (or the MA organization’s other 

contracted agents and brokers). When 

the FMO’s agents then contact the 

individual and enroll the individual 

into an MA plan, the MA organization 

pays the agent or the FMO the 

enrollment compensation described in 

§ 422.2267(d), separate and apart from 

any referral fee paid to the FMO. 

While MA organizations that are 

engaged in these types of arrangements 

(such as paying FMOs for lead 

generating activities and marketing, 

then giving the leads to the FMO’s 

agents and then paying compensation 

for that same enrollment) might argue 

that they are not intended to influence 

an agent or broker in determining which 

plan ‘‘best meets the health care needs 

of a beneficiary,’’ we believe it is likely 

that these arrangements are having this 

effect. We believe that current contracts 

in place between FMOs and MA plans 

can trickle down to influence agents and 

brokers in enrolling more beneficiaries 

into those plans that also provide the 

agents and brokers with leads, 

regardless of the appropriateness of the 

plan is for the individual enrollees. In 

fact, FMOs could leverage these leads as 

a form of additional compensation by 

‘‘rewarding’’ agents who enroll 

beneficiaries into a specific plan with 

additional leads. Therefore, CMS is 

required under section 1851(j)(2)(D) of 

the Social Security Act to establish 

guidelines that will bring the incentives 

for agents and brokers to enroll 

individuals in an MA plan that is 

intended to best meet their health care 

needs, in accordance with the statute. 

In this rule we are proposing to: (1) 

generally prohibit contract terms 

between MA organizations and agents, 

brokers, or other TMPOs that may 

interfere with the agent’s or broker’s 

ability to objectively assess and 

recommend the plan which best fits a 

beneficiary’s health care needs; (2) set a 

single agent and broker compensation 

rate for all plans, while revising the 

scope of what is considered 

‘‘compensation;’’ and (3) eliminate the 

regulatory framework which currently 

allows for separate payment to agents 

and brokers for administrative services. 

We are also proposing to make 

conforming edits to the agent broker 

compensation rules at § 423.2274. 

1. Limitation on Contract Terms 

We propose to add at 

§ 422.2274(c)(13) that, beginning in 

contract year 2025, MA organizations 

must ensure that no provision of a 

contract with an agent, broker, or TPMO 

has the direct or indirect effect of 

creating an incentive that would 

reasonably be expected to inhibit an 

agent’s or broker’s ability to objectively 

assess and recommend which plan best 

meets the health care needs of a 

beneficiary. 

Examples of the anti-competitive 

contract terms we intend to prohibit 

would include, for instance, those that 

specify renewal or other terms of a 

plan’s contract with an agent broker or 

FMO contingent upon preferentially 

higher rates of enrollment; that make an 

MA organizations contract with an FMO 

or reimbursement rates for marketing 

activities contingent upon agents and 

brokers employed by the FMO meeting 

specified enrollment quotas; terms that 

provide for bonuses or additional 

payments from an MA organizations to 

an FMO with the explicit or implicit 

understanding that the money be passed 

on to agents or brokers based on 

enrollment volume in plans sponsored 

by that MA organizations; for an FMO 

to provide an agent or broker leads or 

other incentives based on previously 

enrolling beneficiaries into specific 

plans for a reason other than what best 

meets their health care needs. 

We believe this proposal gives plans 

further direction as to the types of 

incentives and outcomes that must be 

avoided without being overly 

prescriptive as to how the plans should 

structure these arrangements. 

We seek comment on this proposal. 

2. Compensation Rates 

Under current regulations, 

compensation for agents and brokers 

(described at § 422.2274(d)(2) and 

excluding administrative payments as 

described in § 422.2274(e)) may be paid 

at a rate determined by the MA 

organization but may not exceed caps 

that CMS calculates each year, based on 

Fair Market Value (FMV) as specified at 

§ 422.2274(a). For example, the CY2023 

national agent/broker FMV 

compensation caps are $601 for each 


ddrumheller on DSK120RN23PROD with PROPOSALS2
Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78555 

138CDC, Interim Guidance for Health Risk 

Assessments and their Modes of Provision for 

Medicare Beneficiaries; https://www.cms.gov/files/ 

document/healthriskassessmentscdcfinalpdf. 

139https://4239296.fs1.hubspotusercontentna1.net/hubfs/4239296/2023%20Plan%20Year

%20Docs/2023%20HRA%20Instructions/ 

Cigna%202023%20HRA%20Details.pdf. 

140The Commonwealth Fund, The Challenges of 

Choosing Medicare Coverage: Views from Insurance 

Brokers and Agents (Feb. 28, 2023); https://

www.commonwealthfund.org/publications/2023/ 

feb/challenges-choosing-medicare-coverage-viewsinsurance-brokers-agents;cf. Guidance on 

Development of Health Risk Assessment as Part of 

the Annual Wellness Visit for Medicare 

Beneficiaries—(section 4103 of the Patient 

Protection and Affordable Care Act) https://

www.cdc.gov/policy/paeo/hra/hraawvguidance

reportfinal.pdf. 

MA initial enrollment, $301 for a MA 

renewal enrollment, $92 for each Part D 

initial enrollment, and $46 for a Part D 

renewal enrollment. 

We have learned that overall 

payments to agents and brokers can vary 

significantly depending on which plan 

an individual enrolls in. We are 

concerned that the lack of a uniform 

compensation standard across plans can 

encourage the types of arrangements 

that provide strong financial incentives 

for agents and brokers to favor some 

plans over others and that these 

incentives could result in beneficiaries 

enrolling in plans that do not best fit 

their needs. To eliminate this potential 

for bias and ensure that CMS’s 

regulations governing agent and broker 

compensation ensure that agents and 

brokers are incented to enroll 

individuals in the MA plan that is 

intended to best meet their health care 

needs, we are proposing to amend our 

regulations to require that all payments 

to agents or brokers that are tied to 

enrollment, related to an enrollment in 

an MA plan or product, or are for 

services conducted as part of the 

relationship associated with the 

enrollment into an MA plan or product 

must be included under compensation, 

as defined at § 422.2274(a), including 

payments for activities previously 

excluded under paragraph (ii) of the 

definition of compensation at 

§ 422.2274(a), and are regulated by the 

compensation requirements of 

§ 422.2274(d)(1) through (3). We are also 

proposing to make conforming 

amendments to the regulations at 

§ 422.2274(e)(2) to clarify that all 

administrative payments are included in 

the calculation of enrollment-based 

compensation; this proposal is further 

discussed at section VI.B.3. of this 

proposed rule. 

Further, we are proposing to change 

the caps on compensation payments 

that are currently provided in 

§ 422.2274 to set rates that would be 

paid by all plans across the board. 

Under this proposal, agents and brokers 

would be paid the same amount either 

from the MA plan directly or by an 

FMO. We note that the proposal does 

not extend to payments for referrals as 

described at § 422.2274(f); we believe 

the cap set on referral payments is 

sufficient to avoid the harms described 

above, and that a referral payment is 

often made in lieu of a compensation 

payment, and so it does not provide the 

same incentives as compensation 

payments. 

We believe that this approach would 

level the playing field for all plans 

represented by an agent or broker and 

promote competition. In addition, by 

explicitly saying that compensation 

extends to additional activities as a part 

of the relationship between the agent 

and the beneficiary, we reinforce CMS’s 

longstanding understanding that the 

initial and renewal compensation 

amounts are based on the fact that 

additional work may be done by an 

agent or broker throughout the plan 

year, including fielding follow-up 

questions from the beneficiary or 

collecting additional information from 

them would enhance a beneficiary’s 

ability to get the most out of their plan. 

MA organizations are currently 

required, under § 422.2274(c)(5), to 

report to CMS on an annual basis the 

specific rates and range of rates they 

will be paying independent agents and 

brokers. We propose to remove the 

reporting requirement at 

§ 422.2274(c)(5), as all agents and 

brokers would be paid the same 

compensation rate in a given year under 

our proposal. 

We seek comment on this proposal. 

3. Administrative Payments 

As discussed above, CMS is proposing 

that all payments to an agent or broker 

relating to the initial enrollment, 

renewal, or services related to a plan 

product would be included in the 

definition of compensation. For 

consistency with that proposed policy, 

we are also proposing to remove the 

separate regulatory authority regarding 

‘‘administrative payments’’ currently at 

§ 422.2274(e)(1), and to amend 

§ 422.2274(e)(2) to clarify that the 

portion of an agent’s compensation for 

an enrollment may be calculated and 

updated independently We believe this 

step is necessary to ensure that MA 

organizations cannot utilize the existing 

regulatory framework allowing for 

separate payment for administrative 

services to effectively circumvent the 

FMV caps on agent and broker 

compensation. 

For instance, we understand that 

many plans are paying agents and 

brokers for conducting health risk 

assessments (HRAs) and categorize 

these HRAs as an ‘‘administrative 

service.’’ We understand the fair market 

value of these services, when provided 

by non-medical staff, to be 

approximately $12.50 per hour and the 

time required to complete an HRA is 

intended to be no more than twenty 

minutes.138 However, we have been 

made aware of instances of an agent or 

broker enrolling a beneficiary into a 

plan, asking the enrollee to complete 

one of these short assessments, and then 

being compensated at rates of up to 

$125 per HRA.139 Compensation at 

these levels is not consistent with 

market value. Moreover, a study funded 

by the CDC to provide guidance for best 

practices ‘‘recommend that HRAs be 

tied closely with clinician practice and 

be collected electronically and 

incorporated into electronic/patient 

health records [. . .] agents/brokers lack 

the necessary health care knowledge, 

information technology capabilities, and 

provider relationships to link HRAs in 

the recommended way.’’ 140 For this 

reason, we believe that the HRAs 

completed by agents and brokers do not 

have the same value as those performed 

and interpreted by health care providers 

or in a health care setting. 

Similarly, according to recent market 

surveys and information gleaned from 

oversight activities, payments 

purportedly for training and testing and 

other administrative tasks for agents and 

brokers selling some MA plans seem to 

significantly outpace payments for 

similar activities made by other MA 

plans, as well as payments for similar 

activities undertaken by insurance 

agents and brokers in other industries. 

The higher overall cost as compared to 

other industries, combined with the 

otherwise inexplicable difference in 

payments for administrative activities 

for some MA organizations compared to 

others, further points to the payment for 

these administrative activities being 

used as a mechanism to effectively pay 

agents and brokers enrollment 

compensation amounts in excess of the 

limits specified at § 422.2274(a) and (d). 

By eliminating separate payment for 

administrative services, CMS expects 

that this proposal would eliminate a 

significant method which some plans 

may have used to circumvent the 

regulatory limits on enrollment 

compensation. Furthermore, we believe 

ensuring a fixed payment rate for agents 

will result in compensation greater than 

what is currently provided through 

typical contractual arrangements with 

FMOs, as there would no longer be a 


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141https://www.cms.gov/medicare/enrollmentrenewal/managed-care-eligibility-enrollment/agentbroker-compenstation. 

142Our calculations arriving at this number are 

further discussed in the COI in section X.B.10 titled 

ICRs Regarding Agent Broker Compensation 

(§ 422.2274). 

range of compensation rates at which 

the MA organizations could pay for 

agents and brokers’ services. While our 

proposal would prohibit separate 

administrative payments, as described 

below, we propose to adjust the FMV for 

compensation to take into account costs 

for certain appropriate administrative 

activities. 

We recognize that this approach could 

have some drawbacks, particularly as 

this policy would, in effect, leave agents 

and brokers unable to directly recoup 

administrative costs such as overhead or 

lead purchasing from its compensation 

from Medicare health and drug plans, 

unless the agent has a certain volume of 

business. For instance, the cost of a 

customer relationship management 

(CRM) system (the software used to 

connect and log calls to potential 

enrollees) is about $50 per month. This 

expense would require at least one 

enrollment commission per year to 

cover these costs, whereas it is currently 

permissible for an MA organization to 

pay for these costs directly, leaving the 

entire commission as income for the 

agent or broker. However, given the high 

volume of enrollees that use an agent or 

broker for enrollment services, we do 

not believe there to be a large risk of 

agents or brokers failing to cross that 

initial threshold to recoup their 

administrative costs. 

We considered an alternate policy 

proposal wherein we would maintain 

our current definitions of compensation 

and administrative payments but would 

remove the option for a plan to make 

administrative payments based on 

enrollment, as currently codified at 

§ 422.2274(e)(2). We considered instead 

requiring that administrative payments 

be made a maximum of one time per 

administrative cost, per agent or broker. 

We considered the argument that these 

expenses, such as payments for training 

and testing, or nonmonetary 

compensation such as leads, should be 

paid at their FMV and not as a factor of 

overall enrollment because the value of 

such administrative tasks is usually a 

fixed rate, regardless of how many 

enrollments are ultimately generated by 

the agent or broker engaged in these 

administrative tasks. 

We also considered whether, under 

this alternative policy approach, it 

would be best to require that each 

administrative expense be reimbursed at 

the same rate by each contracting MA 

organization as a means of encouraging 

agents and brokers to represent multiple 

plans at any given time. However, this 

alternative policy would, of necessity, 

be comparatively prescriptive and could 

present challenges for all parties as it 

relates to the tracking these expenses. 

We believe our proposal to include all 

payments to an agent or broker under 

the definition of compensation is likely 

to reduce the ability of plans and/or 

TPMOs to circumvent the maximum 

compensation rates defined by CMS via 

the annual FMV determination. 

We seek comment on this proposal. 

We are also proposing to increase the 

compensation rate described at 

§ 422.2274(a) to add certain appropriate 

administrative costs. In particular, we 

believe that the administrative cost of 

the licensing and training and testing 

requirements at § 422.2274(b), and the 

recording requirements at 

§ 422.2274(g)(2)(ii), may warrant an 

increase in the rate of compensation 

given the significant and predictable 

cost of these mandatory activities.141

Based on our fair market value analysis, 

we believe these activities would 

warrant increasing the base 

compensation rate by $31,142 and be 

updated annually as part of the 

scheduled compensation rate update 

described at § 422.2274(a). Therefore, 

we propose to add, beginning in 2025, 

that FMV will be increased by $31 to 

account for administrative payments 

included under the compensation rate, 

and to be updated annually in 

compliance with the requirements for 

FMV updates. 

We believe it is necessary to increase 

the rate for compensation by $31, based 

on the estimated costs for training, 

testing, and call recording that would 

need to be covered by this single 

enrollment-based payment. We are 

proposing to begin with a one-time $31 

increase, including various localityspecific adjustments, with annual FMV 

updates to this amount as described by 

the regulation, including ‘‘adding the 

current year FMV and the product of the 

current year FMV and MA Growth 

Percentage for aged and disabled 

beneficiaries.’’ We note that we are not 

proposing a proportionate increase to 

compensation for renewals and we 

considered this in determining the 

amount by which we are proposing to 

increase the rate for compensation for 

enrollments. 

We seek comment on our proposal to 

increase the rate for compensation to 

account for necessary administrative 

costs that would be incorporated into 

this rate under our previous proposal. 

Specifically, CMS is requesting 

comment on the administrative costs 

that should be considered, and how else 

we might determine their value, as we 

consider the future of the compensation 

structure. 

4. Agent Broker Compensation for Part 

D Plans 

Finally, we also are proposing to 

apply each of the proposals described 

above to the sale of PDP plans by agents 

and brokers, as codified at § 423.2274. 

Pursuant to sections 1851(j)(2)(D) and 

1860D–4(l) of the Act, the Secretary has 

a statutory obligation to establish 

guidelines to ensure that the use of 

agent and broker compensation creates 

incentives for agents and brokers to 

enroll individuals in the Medicare 

Advantage (MA) and Part D prescription 

drug plans that are intended to best 

meet beneficiaries’ health care needs. 

Because the same agents and brokers 

are often licensed to sell both MA plans 

and PDPs, we believe it is necessary 

under our statutory authority to apply 

the same compensation rules to the sale 

of both MA plans and PDPs in order to 

ensure that both plan types are being 

held to the same standards and are on 

a ‘level playing field’ when it comes to 

incentives faced by agents and brokers. 

This includes increasing the FMV rate 

compensation rate by $31. 

We also believe it is necessary to 

extend these regulations to the sale of 

PDPs to avoid shifting the incentives 

discussed at length above, such as the 

incentive for agents to favor one plan 

over another based upon bonuses or 

other payments that are not currently 

accounted for under the definition of 

‘‘compensation.’’ If conforming changes 

are not made to the sale of PDP plans, 

the PDP plans may have an unfair 

advantage in that they have the 

opportunity to offer additional 

payments and perks to FMOs and 

agents, while MA plan sponsors are 

limited by the policies proposed above. 

Therefore, for the same reasons 

discussed above regarding proposed 

changes to § 422.2274, we propose to 

make conforming amendments to 

§ 423.2274. 

We seek comment on this proposal, 

and specifically whether and to what 

extend modifications to these proposals 

should be made to account for 

differences between MA and Part D plan 

types. 

VII. Medicare Advantage/Part C and 

Part D Prescription Drug Plan Quality 

Rating System 

A. Introduction 

CMS develops and publicly posts a 5- 

star rating system for Medicare 

Advantage (MA)/Part C and Part D plans 


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143https://www.nejm.org/doi/full/10.1056/ 

NEJMp2215539. 

as part of its responsibility to 

disseminate comparative information, 

including information about quality, to 

beneficiaries under sections 1851(d) and 

1860D–1(c) of the Act and based on the 

collection of different types of quality 

data under section 1852(e) of the Act. 

The Part C and Part D Star Ratings 

system is used to determine quality 

bonus payment (QBP) ratings for MA 

plans under section 1853(o) of the Act 

and the amount of MA beneficiary 

rebates under section 1854(b) of the Act. 

Cost plans under section 1876 of the Act 

are also included in the MA and Part D 

Star Ratings system, as codified at 

§ 417.472(k). We use multiple data 

sources to measure quality and 

performance of contracts, such as CMS 

administrative data, surveys of 

enrollees, information provided directly 

from health and drug plans, and data 

collected by CMS contractors. Various 

regulations, including §§ 417.472(j) and 

(k), 422.152(b), 423.153(c), and 423.156, 

require plans to report on quality 

improvement and quality assurance and 

to provide data which help beneficiaries 

compare plans. The methodology for the 

Star Ratings system for the MA and Part 

D programs is codified at §§ 422.160 

through 422.166 and 423.180 through 

423.186, respectively, and we have 

specified the measures used in setting 

Star Ratings through rulemaking. In 

addition, the cost plan regulation at 

§ 417.472(k) requires cost contracts to be 

subject to the parts 422 and 423 

Medicare Advantage and Part D 

Prescription Drug Program Quality 

Rating System. (83 FR 16526–27) As a 

result, the proposals here would apply 

to the quality ratings for MA plans, cost 

plans, and Part D plans. We generally 

use ‘‘Part C’’ to refer to the quality 

measures and ratings system that 

applies to MA plans and cost plans. 

We have continued to identify 

enhancements to the Star Ratings 

program to ensure it is aligned with the 

CMS Quality Strategy as that Strategy 

evolves over time. To support the CMS 

National Quality Strategy, CMS is 

moving towards a building-block 

approach to streamline quality measures 

across CMS quality and value-based 

care programs. Across our programs, 

where applicable, we are considering 

including the Universal Foundation 143

of quality measures, which is a set of 

measures that are aligned across CMS 

programs. CMS is committed to aligning 

a set of measures across all our quality 

and value-based care programs and 

ensuring we measure quality across the 

entire care continuum in a way that 

promotes the best, safest, and most 

equitable care for all individuals. 

Improving alignment of measures across 

Federal programs and with private 

payers will reduce provider burden 

while also improving the effectiveness 

and comparability of measures. The 

Universal Foundation of quality 

measures will focus provider attention, 

reduce burden, identify disparities in 

care, prioritize development of 

interoperable, digital quality measures, 

allow for cross-comparisons across 

programs, and help identify 

measurement gaps. The Universal 

Foundation is a building block to which 

programs will add additional aligned or 

program-specific measures. The set of 

measures will evolve over time to meet 

the needs of individuals served across 

CMS programs. We have submitted the 

Initiation and Engagement of Substance 

Use Disorder Treatment (IET) measure 

(Part C) (a Universal Foundation 

measure) to the 2023 Measures under 

Consideration process for review by the 

Measures Application Partnership prior 

to proposing use of that measure in the 

Star Ratings system through future 

rulemaking to align with the Universal 

Foundation. We also note that, 

beginning with measurement year 2023, 

Part C contracts are beginning to report 

to CMS additional measures that are 

part of the Universal Foundation, such 

as Adult Immunization Status, 

Depression Screening and Follow-Up 

for Adolescents and Adults, and Social 

Need Screening and Intervention, for 

the display page. We have previously 

solicited feedback regarding potentially 

proposing these measures as Star 

Ratings in the future through both the 

Advance Notice of Methodological 

Changes for Calendar Year (CY) 2023 for 

Medicare Advantage (MA) Capitation 

Rates and Part C and Part D Payment 

Policies and the Advance Notice of 

Methodological Changes for Calendar 

Year (CY) 2024 for Medicare Advantage 

(MA) Capitation Rates and Part C and 

Part D Payment Policies. We intend to 

submit these measures to the Measures 

Under Consideration process for review 

by the Measures Application 

Partnership in the future and propose 

them through future rulemaking as 

additional Star Ratings measures. The 

remaining measures that are part of the 

Universal Foundation are already part of 

the current Part C and D Star Ratings 

program. 

In this proposed rule, we are also 

proposing to update the Medication 

Therapy Management (MTM) Program 

Completion Rate for Comprehensive 

Medication Review (CMR) measure (Part 

D). 

We are also proposing the following 

methodological enhancements, 

clarifications, and operational updates: 

• Revise the process for identifying 

data completeness issues and 

calculating scaled reductions for the 

Part C appeals measures. 

• Update how the CAI and HEI 

reward are calculated in the case of 

contract consolidations. 

• Revise an aspect of the QBP appeals 

process. 

• Add that a sponsor may request 

CMS review of its contract’s 

administrative claims data used for the 

Part D Patient Safety measures no later 

than the annual deadline set by CMS for 

the applicable Star Ratings year. 

Unless otherwise stated, proposed 

changes would apply (that is, data 

would be collected and performance 

measured) for the 2025 measurement 

period and the 2027 Star Ratings. 

B. Adding, Updating, and Removing 

Measures (§§ 422.164 and 423.184) 

The regulations at §§ 422.164 and 

423.184 specify the criteria and 

procedures for adding, updating, and 

removing measures for the Star Ratings 

program. In the ‘‘Medicare Program; 

Contract Year 2019 Policy and 

Technical Changes to the Medicare 

Advantage, Medicare Cost Plan, 

Medicare Fee-for-Service, the Medicare 

Prescription Drug Benefit Programs, and 

the PACE Program’’ final rule which 

appeared in the Federal Register on 

April 16, 2018 (83 FR 16532) 

(hereinafter referred to as the April 2018 

final rule), we stated we are committed 

to continuing to improve the Part C and 

Part D Star Ratings system and 

anticipated that over time measures 

would be added, updated, and removed. 

We also specified at §§ 422.164(d) and 

423.184(d) rules for measure updates 

based on whether they are substantive 

or non-substantive. The regulations, at 

paragraph (d)(1), list examples of nonsubstantive updates. See also 83 FR 

16534–37. Due to the regular updates 

and revisions made to measures, CMS 

does not codify a list in regulation text 

of the measures (and their 

specifications) adopted for the Part C 

and Part D Star Ratings program. CMS 

lists the measures used for the Star 

Ratings each year in the Medicare Part 

C & D Star Ratings Technical Notes or 

similar guidance issued with 

publication of the Star Ratings. In this 

rule, CMS is proposing a measure 

change to the Star Ratings program and 

an updated methodology for calculating 

scaled reductions of the Part C appeals 

measures for performance periods 

beginning on or after January 1, 2025, 

unless noted otherwise. 


ddrumheller on DSK120RN23PROD with PROPOSALS2
78558 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

144The Medicare Part C & D Star Ratings 

Technical Notes provide details on existing 

measures and are available at: https://www.cms.gov/ 

medicare/prescription-drug-coverage/ 

prescriptiondrugcovgenin/performancedata. 

145The current core chronic diseases are 

diabetes*, hypertension*, dyslipidemia*, chronic 

congestive heart failure*, Alzheimer’s disease, end 

stage renal disease (ESRD), respiratory disease 

(including asthma*, chronic obstructive pulmonary 

disease (COPD), and other chronic lung disorders), 

bone disease-arthritis (osteoporosis, osteoarthritis, 

and rheumatoid arthritis), and mental health 

(including depression, schizophrenia, bipolar 

disorder, and other chronic/disabling mental health 

conditions). Enumerated in statute (*). 

We are committed to continuing to 

improve the Part C and Part D Star 

Ratings system by focusing on 

improving clinical and other health 

outcomes. Consistent with 

§§ 422.164(c)(1) and 423.184(c)(1), we 

continue to review measures that are 

nationally endorsed and in alignment 

with the private sector. For example, we 

regularly review measures developed by 

NCQA and PQA. 

1. Proposed Measure Update 

a. Medication Therapy Management 

(MTM) Program Completion Rate for 

Comprehensive Medication Review 

(CMR) (Part D) 

Section 1860D–4(c)(2) of the Act 

requires all Part D sponsors to have an 

MTM program designed to assure, with 

respect to targeted beneficiaries, that 

covered Part D drugs are appropriately 

used to optimize therapeutic outcomes 

through improved medication use, and 

to reduce the risk of adverse events, 

including adverse drug interactions. 

Section 1860D–4(c)(2)(A)(ii) of the Act 

requires Part D sponsors to target those 

Part D enrollees who have multiple 

chronic diseases, are taking multiple 

Part D drugs, and are likely to meet a 

cost threshold for covered Part D drugs 

established by the Secretary. CMS 

codified the MTM targeting criteria at 

§ 423.153(d)(2). 

CMS also uses the MTM Program 

Completion Rate for CMR Star Rating 

measure, which is defined as the 

percent of MTM program enrollees who 

received a CMR during the reporting 

period. The Part D MTM Program 

Completion Rate for CMR measure 

shows how many members in a plan’s 

MTM program had an assessment from 

their plan by a pharmacist or other 

health professional to help them manage 

their medications. As part of the 

completion of a CMR, a Part D enrollee 

receives a written summary of the 

discussion in CMS’s Standardized 

Format, including an action plan that 

recommends what the member can do to 

better understand and use their 

medications.144

In the December 27, 2022 proposed 

rule, ‘‘Medicare Program; Contract Year 

2024 Policy and Technical Changes to 

the Medicare Advantage Program, 

Medicare Prescription Drug Benefit 

Program, Medicare Cost Plan Program, 

Medicare Parts A, B, C, and D 

Overpayment Provisions of the 

Affordable Care Act and Programs of 

All-Inclusive Care for the Elderly; 

Health Information Technology 

Standards and Implementation 

Specifications’’ (87 FR 79452), hereafter 

referred to as the December 2022 

proposed rule, CMS proposed changes 

to the MTM program targeting criteria, 

including: (1) requiring plan sponsors to 

target all core chronic diseases 

identified by CMS, codifying the current 

9 core chronic diseases 145 in regulation, 

and adding HIV/AIDS for a total of 10 

core chronic diseases; (2) lowering the 

maximum number of covered Part D 

drugs a sponsor may require from 8 to 

5 drugs and requiring sponsors to 

include all Part D maintenance drugs in 

their targeting criteria; and (3) revising 

the methodology for calculating the cost 

threshold ($4,935 in 2023) to be 

commensurate with the average annual 

cost of 5 generic drugs ($1,004 in 2020). 

We estimated that the proposed changes 

would increase the number and 

percentage of Part D enrollees eligible 

for MTM from 4.5 million (9 percent) to 

11.4 million (23 percent). 

As noted in the April 12, 2023 final 

rule, ‘‘Medicare Program; Contract Year 

2024 Policy and Technical Changes to 

the Medicare Advantage Program, 

Medicare Prescription Drug Benefit 

Program, Medicare Cost Plan Program, 

and Programs of All-Inclusive Care for 

the Elderly’’ (88 FR 22120), hereafter 

referred to as the April 2023 final rule, 

we did not address comments received 

on the provisions of the proposed rule 

that were not finalized in that rule, such 

as the proposed MTM program targeting 

criteria changes, and stated that they 

would be addressed at a later time, in 

a subsequent rulemaking document, as 

appropriate. If those proposed changes 

were to be finalized, the number of Part 

D enrollees eligible for MTM programs 

would increase, and the denominator of 

the MTM Program Completion Rate for 

CMR Measure would expand 

accordingly; therefore such changes in 

the targeting criteria would be 

substantive updates to the Star Rating 

measure per § 423.184(d)(2). 

Specifically, these proposed changes to 

the targeting criteria would not update 

the actual measure specifications but 

would meaningfully impact the number 

of Part D enrollees eligible for MTM 

services from 9 percent to an estimated 

23 percent and, thus, substantially 

increase the number of enrollees 

included in the denominator of the 

MTM Program Completion Rate for 

CMR Measure, if finalized. 

Accordingly, if the changes to 

eligibility for the MTM program in the 

December 2022 proposed rule 

(described above) are finalized in a 

future rule, in this proposed rule CMS 

proposes to move the MTM Program 

Completion Rate for CMR Star Rating 

measure to a display measure for at least 

2 years due to substantive measure 

updates. For example, if such MTM 

program eligibility changes are finalized 

for CY 2025, our proposal in this rule 

would move the measure to the display 

page for at least 2 years prior to using 

the updated measure to calculate and 

assign Star Ratings. There would be no 

legacy measure to calculate while the 

updated measure using the same 

measure specifications is on the display 

page because the MTM-eligible 

denominator population would have 

meaningfully increased due to changes 

in the program requirements. Therefore, 

the measure would be removed from the 

Star Ratings entirely for the 2025 and 

2026 measurement years and would 

return to the Star Ratings program no 

earlier than the 2027 measurement year 

for the 2029 Star Ratings. CMS does not 

anticipate any additional burden 

associated with the measure update, as 

burden tied to the changes in the MTM 

eligibility criteria is already considered 

in estimates for the December 2022 

proposed rule. 

If the changes to eligibility for MTM 

programs described above and in the 

December 2022 proposed rule are not 

finalized, CMS would not make any 

substantive changes to the MTM 

Program Completion Rate for CMR 

measure—that is, we would also not 

finalize the proposal in this rule to 

update the Star Rating measure. 

Table GB1 summarizes the updated 

MTM Program Completion Rate for 

CMR measure addressed in this 

proposed rule. The measure description 

listed in this table is a high-level 

description. The annual Star Ratings 

measure specifications supporting 

document, Medicare Part C & D Star 

Ratings Technical Notes, provides 

detailed specifications for each measure. 

Detailed specifications include, where 

appropriate, more specific identification 

of a measure’s: (1) numerator, (2) 

denominator, (3) calculation, (4) 

timeframe, (5) case-mix adjustment, and 

(6) exclusions. The Technical Notes 

document is updated annually. The 

annual Star Ratings are produced in the 

fall of the prior year. For example, the 

2027 Stars Ratings are produced in the 


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146Announcement of Calendar Year (CY) 2020 

Medicare Advantage Capitation Rates and Medicare 

Advantage and Part D Payment Policies and Final 

Call Letter (cms.gov). 

fall of 2026. If a measurement period is 

listed as ‘‘the calendar year 2 years prior 

to the Star Ratings year’’ and the Star 

Ratings year is 2027, the measurement 

period is referencing the January 1, 

2025, to December 31, 2025, period. 

C. Data Integrity (§§ 422.164(g) and 

423.184(g)) 

We currently have rules specified at 

§§ 422.164(g) and 423.184(g) to reduce a 

measure rating when CMS determines 

that a contract’s measure data are 

incomplete, inaccurate, or biased. For 

the Part C appeals measures, we have 

statistical criteria to reduce a contract’s 

appeals measures for missing 

Independent Review Entity (IRE) data. 

Specifically, these criteria allow us to 

use scaled reductions for the appeals 

measures to account for the degree to 

which the data are missing. See 83 FR 

16562–16564. The data underlying a 

measure score and Star Rating must be 

complete, accurate, and unbiased for 

them to be useful for the purposes we 

have codified at §§ 422.160(b) and 

423.180(b). In the April 2018 final rule 

(83 FR 16562), CMS codified at 

§§ 422.164(g)(1)(iii) and 423.184(g)(1)(ii) 

a policy to make scaled reductions to 

the Part C and D appeals measures’ Star 

Ratings when the relevant IRE data are 

not complete based on the Timeliness 

Monitoring Project (TMP) or audit 

information. As provided under 

§ 423.184(e)(1)(ii), we removed the two 

Part D appeals measures (Appeals AutoForward and Appeals Upheld) 

beginning with the 2020 measurement 

year and 2022 Star Ratings in the 2020 

Rate Announcement 146 due to low 

statistical reliability; thus, the scaled 

reductions are no longer applicable to 

the Part D appeals measures. However, 

we made no changes to the scaled 

reductions used with the Part C appeals 

measures, Plan Makes Timely Decisions 

about Appeals and Reviewing Appeals 

Decisions, because there were no similar 

statistical reliability issues with those 

measures. Therefore, these two Part C 

measures continue to be subject to the 

scaled reductions authorized at 

§ 422.164(g)(1)(iii) based on TMP or 

audit information. 

Because the Part D appeals measures 

are no longer part of the Star Ratings, we 

are proposing to remove and reserve the 

paragraphs at §§ 422.164(g)(1)(iii)(B), 

(F), and (I) and 423.184(g)(1)(ii). 

Paragraphs (g)(1)(iii)(B), (F), and (I) of 

§ 422.164 all address how the error rate 

on the TMP for the Part D appeals 

measures had been used in calculating 

scaled reductions for MA–PDs that are 

measured on both Part C and Part D 

appeals. Currently, § 423.184(g)(1)(ii) 

addresses the scaled reductions for Part 

D appeals measures based on the TMP. 

Given the removal of the Part D appeals 

measures from the Star Ratings, these 

provisions are moot. We propose to 

reserve the relevant paragraphs to avoid 

the risk that redesignating the remaining 

paragraphs would cause unintended 

consequences with any existing 

references to these provisions. 

The completeness of the IRE data is 

critical to support fair and accurate 

measurement of the two Part C appeals 

measures. Since the 2019 Star Ratings 

we have used data from the TMP, which 

uses the Part C audit protocols for 

collecting Organization Determinations, 

Appeals and Grievances (ODAG) 

universes, to determine whether the IRE 

data used to calculate the Part C appeals 

measures are complete. As described at 

§ 422.164(g)(1)(iii), we use scaled 

reductions to account for the degree to 

which the IRE data are missing. The 

current regulations describe how scaled 

reductions are based on the TMP. 

However, due to a change in the Part C 

audit protocols for collecting universes 

of ODAG data, we are proposing to 

modify, and in one case reserve, 

paragraphs (g)(1)(iii) introductory text, 

(g)(1)(iii)(A)(1) and (2), (g)(1)(iii)(H) and 

(J), (g)(1)(iii)(K)(2), and (g)(1)(iii)(O) to 

change how we address reductions in 

the Star Ratings for Part C appeals 

measures using different data. We are 

proposing to revise the introductory 

language in § 422.164(g)(1)(iii) to 

remove references to the timeliness 

monitoring study and audits and replace 

them with references to data from MA 

organizations, the IRE or CMS 

administrative sources. In addition, our 

proposed revisions to this paragraph 

include minor grammatical changes to 

the verb tense. We are also proposing to 

modify § 422.164(g)(1)(iii)(A) to use data 

from MA organizations, the IRE, or CMS 

administrative sources to determine the 

completeness of the data at the IRE for 

the Part C appeals measures starting 

with the 2025 measurement year and 

the 2027 Star Ratings. Currently, data 

collected through § 422.516(a) could be 

used to confirm the completeness of the 

IRE data; however, data collected from 

MA organizations through other 

mechanisms in addition to data from the 

IRE or CMS administrative sources 

could be used in the future. The 

proposed amendment to 

§ 422.164(g)(1)(iii)(A) is not intended to 

limit the data CMS uses to conduct 

analyses of the completeness of the IRE 

data in order to adapt to changing 

information submissions that could be 

reliably used for the same purpose in 

the future. The revisions proposed for 

the other paragraphs provide for a new 

calculation to implement scaled 

reductions for the Part C appeals 


ddrumheller on DSK120RN23PROD with PROPOSALS2EP15NO23.019</GPH>

TABLE GBl. SUMMARY OF PROPOSED REVISED INDIVIDUAL STAR RATING 

MEASURE FOR PERFORMANCE PERIODS BEGINNING ON OR AFTER JANUARY 

1,2025 

Measure Measure Description Domain Measure Data Source Measurement CMITID Statistical Reporting 

Category and Period Method for Requirements 

Weight Assigning (Contract 

StarRatinll Tune) 

Part D Measure 

Medication The percent of Drug Safety Process Measure PartDPlan The calendar 00454-01-C- Clustering MA-PD and 

Therapy MTM program and Accuracy Weight of! Reporting year 2 years prior PARTD PDP 

Management enrollees, 18 years of Drug Requirements to the Star 

(MTM) Program or older, who Pricing Ratings year 

Completion Rate received a CMR 

for Comprehensive during the reporting 

Medication Review period. 

(CMR)* 

* Effective as soon as the 2027 measurement year. 
78560 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

147Elements E through L in Subsection #4 on 

page 15 at https://www.cms.gov/files/document/ 

cy2023-part--technical-specifications-222023.pdf are currently used to identify favorable and 

partially favorable reconsiderations. 

measures for specific data integrity 

issues. 

Part C contracts are required to send 

partially favorable (partially adverse) 

and unfavorable (adverse) decisions to 

the IRE within applicable timeframes as 

specified at § 422.590(a) through (e). In 

order for the existing Part C appeals 

measures (Plan Makes Timely Decisions 

about Appeals and Reviewing Appeals 

Decisions) to accurately reflect plan 

performances in those areas, the appeals 

must be sent to the IRE because the data 

source for these measures is based on 

the data that have been submitted to the 

IRE. Currently, through the Part C 

Reporting Requirements as set forth at 

§ 422.516(a), CMS collects information 

at the contract level from MA 

organizations about the number of 

partially favorable reconsiderations (that 

is, the number of partially favorable 

claims and the number of partially 

favorable service requests by enrollees/ 

representatives and non-contract 

providers) and unfavorable 

reconsiderations (that is, the number of 

partially favorable claims and the 

number of partially favorable service 

requests by enrollees/representatives 

and non-contract providers) over a 

calendar year.147 These data are subject 

to data validation requirements, in 

accordance with specifications 

developed by CMS, under § 422.516(g), 

to confirm that they are reliable, valid, 

complete, and comparable. CMS would 

use this information to determine the 

total number of cases that should have 

been sent to the IRE over the 

measurement year (that is, number of 

partially favorable reconsiderations + 

number of unfavorable reconsiderations) 

to compare to information from the IRE 

about submissions received from each 

MA organization. In the future, CMS 

may use detailed beneficiary-level data 

collected on the number of partially 

favorable reconsiderations and the 

number of unfavorable reconsiderations 

if such more detailed information is 

collected under CMS’s statutory and 

regulatory authority to require reporting 

and data submission from MA 

organizations (such as the reporting 

requirements in §§ 422.504(f)(2) and/or 

422.516(a)). 

To determine if a contract may be 

subject to a potential reduction for the 

Part C appeals measures’ Star Ratings, 

CMS is proposing to compare the total 

number of appeals received by the IRE, 

including all appeals regardless of their 

disposition (for example, including 

appeals that are dismissed for reasons 

other than the plan’s agreement to cover 

the disputed services and withdrawn 

appeals), to the total number of appeals 

that were supposed to go to the IRE. The 

total number of appeals that were 

supposed to be sent to the IRE would be 

based on the sum of the number of 

partially favorable reconsiderations and 

the number of unfavorable 

reconsiderations from the Part C 

Reporting Requirements during the 

measurement year (January 1 to 

December 31st). We propose to modify 

the calculation of the error rate at 

§ 422.164(g)(1)(iii)(H) by taking 1 minus 

the quotient of the total number of cases 

received by the IRE and the total 

number of cases that were supposed to 

be sent to the IRE (Equation 1). The total 

number of appeals that were supposed 

to be sent to the IRE in Equation 2 

would be calculated from the data 

described in the proposed revisions to 

§ 422.164(g)(1)(iii)(A): 

We propose to remove and reserve 

§ 422.164(g)(1)(iii)(J) because we intend 

to calculate the Part C error rate based 

on 12 months rather than a projected 

number of cases not forwarded to the 

IRE in a 3-month period as has 

historically been done with the TMP 

data. Currently, a contract is subject to 

a possible reduction due to lack of IRE 

data completeness if the calculated error 

rate is 20 percent or more and the 

projected number of cases not 

forwarded to the IRE is at least 10 in a 

3-month period as described at 

§ 422.164(g)(1)(iii)(K). We are proposing 

to modify § 422.164(g)(1)(iii)(K)(2) so 

that the number of cases not forwarded 

to the IRE is at least 10 for the 

measurement year (that is, total number 

of cases that should have been 

forwarded to the IRE minus the total 

number of cases received by the IRE is 

at least 10 for the measurement year). 

The requirement for a minimum number 

of cases is needed to address statistical 

concerns with precision and small 

numbers. If a contract meets only one of 

the conditions specified in paragraph 

(K), the contract would not be subject to 

reductions for IRE data completeness 

issues. 

We are proposing at 

§ 422.164(g)(1)(iii)(O) that the two Part C 

appeals measure Star Ratings be 

reduced to 1 star if CMS does not have 

accurate, complete, and unbiased data 

to validate the completeness of the Part 

C appeals measures. For example, the 

data collected in the Part C Reporting 

Requirements go through a data 

validation process (§ 422.516(a)). CMS 

has developed and implemented data 

validation standards to ensure that data 

reported by sponsoring organizations 

pursuant to § 422.516 satisfy the 

regulatory obligation. If these data are 

used to validate the completeness of the 

IRE data used to calculate the Part C 

appeals measures, we would reduce the 

two Part C appeals measure Star Ratings 

to 1 star if a contract fails data 

validation of the applicable Part C 

Reporting Requirements sections for 

reconsiderations by not scoring at least 

95 percent or is not compliant with data 

validation standards (which includes 

sub-standards as applicable), since we 

cannot confirm the data used for the 

Part C appeals measures. 

We also propose to update 

§ 422.164(g)(1)(iii)(A)(2) to change the 

data source in the case of contract 

consolidations so that the data 


ddrumheller on DSK120RN23PROD with PROPOSALS2EP15NO23.000</GPH> EP15NO23.001</GPH>

Equation (1) 

Part C Calculated Error Rate= 1 _ _____ T_o_ta_l_n_u_m_b_e_r_o __ fc_as_e_s_r_ec_e_iv_e_d_b ___ y_t_h_e_IR_E ____ _ 

Total number of cases that should have been forwarded to the IRE 

Equation (2) 

Total Number of Cases that should have been forwarded to the IRE 

= Number of partially favorable reconsiderations 

+ Number of unfavorable reconsiderations 
Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78561 

described in paragraph (g)(1)(iii)(A)(1) 

are combined for consumed and 

surviving contracts for the first year 

after consolidation. In addition, we 

propose to delete the phrase ‘‘For 

contract consolidations approved on or 

after January 1, 2022’’ as unnecessary. 

We are not proposing to update the 

steps currently described at 

§ 422.164(g)(1)(iii)(C) through (E) and 

(G), (g)(1)(iii)(K)(1), and (g)(1)(iii)(L) 

through (N) to determine whether a 

scaled reduction should be applied to 

the two Part C appeals measures. We 

welcome feedback on this updated 

approach for making scaled reductions 

proposed at § 422.164(g)(1)(iii) 

introductory text, (g)(1)(iii)(A)(1) and 

(2), (g)(1)(iii)(H), (g)(1)(iii)(K)(2), and 

(g)(1)(iii)(O), the removal of the Part D 

related provisions at 

§§ 422.164(g)(1)(iii)(B), (F), and (I) and 

423.184(g)(1)(ii), and removal of the 

provision at § 422.164(g)(1)(iii)(J). 

D. Review of Sponsor’s Data 

(§§ 422.164(h) and 423.184(h)) 

Currently, §§ 422.164(h) and 

423.184(h) provide that an MA 

organization (and a cost plan 

organization as the regulations are 

applied under § 417.472(k)) and a Part D 

plan sponsor may request a review of 

certain administrative data (that is, the 

contracts’ appeals data and Complaints 

Tracking Module data) before Star 

Ratings are calculated. The regulations 

provide that CMS will establish an 

annual deadline by which such requests 

must be submitted. At §§ 422.164(h)(3) 

and 423.184(h)(3), CMS proposes to 

expand the policy for requests that CMS 

review certain data used for Star Ratings 

to include administrative data used for 

their contract’s Part D Star Rating 

Patient Safety measures. These requests 

would also have to be received by the 

annual deadline set by CMS. We intend 

that the requests could include CMS’s 

review of Prescription Drug Event 

(PDE), diagnosis code, and enrollment 

data but the requests are not necessarily 

limited to these specific data. 

CMS reports and updates the rates for 

the current Part D Star Ratings Patient 

Safety measures (that is, Medication 

Adherence for Cholesterol (Statins) 

(ADH-Statins), Medication Adherence 

for Hypertension (RAS Antagonists) 

(ADH–RAS), Medication Adherence for 

Diabetes Medications (ADH-Diabetes), 

and Statin Use in Persons with Diabetes 

(SUPD) measures) via the Patient Safety 

Analysis Web Portal for sponsors to 

review and download. Part D sponsors 

can use the Patient Safety reports to 

compare their performance to overall 

averages and monitor their progress in 

improving their measure rates. In the 

April 17, 2023, HPMS memorandum 

titled ‘‘Information to Review Data Used 

for Medicare Part C and D Star Ratings 

and Display Measures,’’ CMS reminded 

sponsors of the various datasets and 

reports available for sponsors to review 

their underlying measure data that are 

the basis for the Part C and D Star 

Ratings and display measures, including 

the monthly Part D Patient Safety 

measure reports. We expect sponsors to 

review their monthly Patient Safety 

reports that include measure rates along 

with available underlying 

administrative data and alert CMS of 

potential errors or anomalies in the rate 

calculations per the measure 

specifications in advance of CMS’s plan 

preview periods to allow sufficient time 

to investigate and resolve them before 

the release of the Star Ratings. 

Reviewing administrative data for the 

Patient Safety measures is a timeconsuming process. In addition, once 

CMS implements sociodemographic 

status (SDS) risk adjustment for the 

three Medication Adherence measures, 

as finalized in the April 2023 final rule 

(88 FR 22265–22270), the final measure 

rates, which are calculated in July after 

the end of the measurement period, will 

require increased processing time to 

calculate. To allow enough time for 

CMS to review a sponsor’s 

administrative data and ensure the 

accuracy of the final calculated Patient 

Safety measure rates, we are proposing 

that sponsors’ requests for CMS review 

of administrative data must be received 

no later than the annual deadline set by 

CMS. 

Beginning with the 2025 

measurement year (2027 Star Ratings), 

we propose at §§ 422.164(h)(3) and 

423.184(h)(3) that any requests by an 

MA organization or Part D sponsor to 

review its administrative data for 

Patient Safety measures be made by the 

annual deadline set by CMS for the 

applicable Star Ratings year. Similar to 

the implementation of §§ 422.164(h)(1) 

and (2) and 423.184(h)(1) and (2), to 

provide flexibility to set the deadline 

contingent on the timing of the 

availability of data for plans to review, 

we intend to announce the deadline in 

advance either through the process 

described for changes in and adoption 

of payment and risk adjustment policies 

section 1853(b) of the Act (that is, the 

annual Advance Notice and Rate 

Announcement) or an HPMS 

memorandum. 

Given the timing of the publication of 

the Advance Notice of Methodological 

Changes for Calendar Year (CY) 2025 for 

Medicare Advantage (MA) Capitation 

Rates and Part C and Part D Payment 

Policies and of this proposal, we intend 

to announce the deadline for 

measurement year 2025 in the final rule, 

should this proposal be finalized. In 

subsequent years, we will announce 

annual deadlines in advance via annual 

Advance Notice and Rate 

Announcement, or by a HPMS 

memorandum. For the 2025 

measurement year (2027 Star Ratings), 

we expect this deadline to be May 18, 

2026. In establishing this deadline, we 

factored in data completeness along 

with operational deadlines to produce 

the final Star Ratings. These requests 

may be time-consuming to review, and 

it is beneficial to receive the requests 

before the final rates are calculated and 

before the first plan preview. 

Historically, we find that PDE data for 

performance measurement are complete 

by April of the following year (that is, 

PDE data for Year of Service (YOS) 2025 

is generally complete by April of 2026) 

even though the PDE submission 

deadline is established at the end of 

June following the payment year. 

E. Categorical Adjustment Index 

(§§ 422.166(f)(2) and 423.186(f)(2)) 

We propose to calculate the 

percentage LIS/DE enrollees and 

percentage disabled enrollees used to 

determine the Categorical Adjustment 

Index (CAI) adjustment factor in the 

case of contract consolidations based on 

the combined contract enrollment from 

all contracts in the consolidation 

beginning with the 2027 Star Ratings. 

The methodology for the CAI is codified 

at §§ 422.166(f)(2) and 423.186(f)(2). The 

CAI adjusts for the average withincontract disparity in performance 

associated with the percentages of 

enrollees who receive a low-income 

subsidy or are dual eligible (LIS/DE) or 

have disability status within that 

contract. Currently, the percentage LIS/ 

DE enrollees and percentage disabled 

enrollees for the surviving contract of a 

consolidation that are used to determine 

the CAI adjustment factor are calculated 

using enrollment data for the month of 

December for the measurement period 

of the Star Ratings year for the surviving 

contract as described at 

§§ 422.166(f)(2)(i)(B) and 

423.186(f)(2)(i)(B). To more accurately 

reflect the membership of the surviving 

contract after the consolidation, we 

propose to determine the percentage 

LIS/DE enrollees and percentage 

disabled enrollees for the surviving 

contract by combining the enrollment 

data across all contracts in the 

consolidation. 

We propose to modify 

§§ 422.166(f)(2)(i)(B) and 

423.186(f)(2)(i)(B) to calculate the 

percentage LIS/DE enrollees and the 


ddrumheller on DSK120RN23PROD with PROPOSALS2
78562 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

148This guidance can be found at https://

www.cms.gov/files/document/cy2021-maenrollment-and-disenrollment-guidance.pdf and 

https://www.cms.gov/regulations-and-guidance/ 

guidance/manuals/downloads/mc86c16b.pdf. 

percentage disabled enrollees for the 

surviving contract for the first two years 

following a consolidation by combining 

the enrollment data for the month of 

December for the measurement period 

of the Star Ratings year across all 

contracts in the consolidation. Once the 

enrollment data are combined across the 

contracts in the consolidation, all other 

steps described at §§ 422.166(f)(2)(i)(B) 

and 423.186(f)(2)(i)(B) for determining 

the percentage LIS/DE enrollees and 

percentage disabled enrollees would 

remain the same, but we are proposing 

to restructure that regulation text into 

new paragraphs (f)(2)(i)(B)(2) through 

(4). We are proposing this change since 

§§ 422.166(b)(3) and 423.186(b)(3) do 

not address the calculation of 

enrollment for the CAI in the event of 

a contract consolidation; rather, they 

focus on the calculation of measure 

scores in the case of consolidations. 

F. Health Equity Index Reward 

(§§ 422.166(f)(3) and 423.186(f)(3)) 

We are proposing how to calculate the 

health equity index (HEI) reward in the 

case of contract consolidations 

beginning with the 2027 Star Ratings. 

(The 2027 Star Ratings will be the first 

Star Ratings to include the HEI.) The 

methodology for the HEI reward is 

codified at §§ 422.166(f)(3) and 

423.186(f)(3). The HEI rewards contracts 

for obtaining high measure-level scores 

for the subset of enrollees with the 

specified social risk factors (SRFs). The 

goal of the HEI reward is to improve 

health equity by incentivizing MA, cost, 

and PDP contracts to perform well 

among enrollees with specified SRFs. In 

calculating the HEI reward for the 

surviving contract of a consolidation, 

we want to avoid masking the scores of 

contracts with low performance among 

enrollees with the specified SRFs under 

higher performing contracts. We also 

want to avoid masking contracts that 

serve relatively few enrollees with the 

specified SRFs under contracts that 

serve relatively many more of these 

enrollees. 

For the first year following a 

consolidation, we propose to add new 

paragraphs §§ 422.166(f)(3)(viii)(A) and 

423.186(f)(3)(viii)(A) to assign the 

surviving contract of a consolidation the 

enrollment-weighted mean of the HEI 

reward of the consumed and surviving 

contracts using enrollment from July of 

the most recent measurement year used 

in calculating the HEI reward; the 

existing rules laid out at 

§§ 422.162(b)(3)(iv) and 

423.182(b)(3)(iv) address how CMS will 

handle combining measures scores for 

consolidations, but do not address how 

CMS will handle the calculation of the 

HEI when contracts consolidate since 

the HEI is not a measure. We propose 

that contracts that do not meet the 

minimum percentage of enrollees with 

the specified SRF thresholds or the 

minimum performance threshold 

described at §§ 422.166(f)(3)(vii) and 

423.186(f)(3)(vii) would have a reward 

value of zero used in calculating the 

enrollment-weighted mean reward. For 

the second year following a 

consolidation, we propose at new 

paragraphs §§ 422.166(f)(3)(viii)(B) and 

423.186(f)(3)(viii)(B) that, when 

calculating the HEI score for the 

surviving contract, the patient-level data 

used in calculating the HEI score would 

be combined across the contracts in the 

consolidation prior to calculating the 

HEI score. The HEI score for the 

surviving contract would then be used 

to calculate the HEI reward for the 

surviving contract following the 

methodology described in 

§§ 422.166(f)(3)(viii) and 

423.186(f)(3)(viii). 

G. Quality Bonus Payment Rules 

(§ 422.260) 

Sections 1853(n) and 1853(o) of the 

Act require CMS to make QBPs to MA 

organizations that achieve at least 4 

stars in a 5-star quality rating system. In 

addition, section 1854(b)(1)(C) of the 

Act ties the share of savings that MA 

organizations must provide to enrollees 

as the beneficiary rebate to the level of 

an MA organization’s QBP rating. The 

administrative review process for an 

MA contract to appeal its QBP status is 

laid out at § 422.260(c). As described in 

the final rule titled ‘‘Medicare Program; 

Changes to the Medicare Advantage and 

the Medicare Prescription Drug Benefit 

Programs for Contract Year 2012 and 

Other Changes,’’ which was published 

in the Federal Register on April 15, 

2011 (76 FR 21490–91), § 422.260(c)(1) 

and (2) create a two-step administrative 

review process that includes a request 

for reconsideration and a request for an 

informal hearing on the record, and 

§ 422.260(c)(3) imposes limits on the 

scope of requests for an administrative 

review. We propose to revise the 

language at § 422.260(c)(2)(vii) to 

provide the CMS Administrator the 

opportunity to review and modify the 

hearing officer’s decision within 10 

business days of its issuance. We 

propose that if the Administrator does 

not review and issue a decision within 

10 business days, the hearing officer’s 

decision is final and binding. Under this 

proposal, if the Administrator does 

review and modify the hearing officer’s 

decision, a new decision will be issued 

as directed by the Administrator. If 

finalized, this proposed amendment 

would be implemented for all QBP 

appeals after the effective date of the 

final rule. 

VIII. Improvements for Special Needs 

Plans 

A. Verification of Eligibility for C–SNPs 

(§ 422.52(f)) 

Section 1859(b)(6) of the Act defines 

specialized MA plans for special needs 

individuals, as well as the term ‘‘special 

needs individual.’’ Section 1859(f)(1) of 

the Act provides that notwithstanding 

any other provision of Part C of the 

Medicare statute and in accordance with 

regulations of the Secretary, an MA 

special needs plan (SNP) may restrict 

the enrollment of individuals under the 

plan to individuals who are within one 

or more classes of special needs 

individuals. The regulation governing 

eligibility for MA SNPs is at § 422.52. In 

addition to meeting the definition of a 

special needs individual in § 422.2 and 

the general eligibility requirements for 

MA enrollment in § 422.50, an 

individual must meet the eligibility 

requirements for the specific MA SNP in 

which the individual seeks to enroll. 

Currently, § 422.52(f) provides that each 

MA SNP must employ a process 

approved by CMS to verify the 

eligibility of each individual enrolling 

in the SNP. CMS adopted this provision 

in paragraph (f) in the final rule with 

comment period ‘‘Medicare Program; 

Medicare Advantage and Prescription 

Drug Benefit Programs: Negotiated 

Pricing and Remaining Revisions,’’ 

which appeared in the Federal Register 

on January 12, 2009 (74 FR 1494). 

Historically, we have provided 

operational guidance related to 

eligibility criteria for enrollment in an 

MA SNP that exclusively enrolls 

individuals who meet the definition of 

special needs individual under § 422.2 

in our sub-regulatory manuals.148

We propose to revise paragraph 

§ 422.52(f) to codify, with minor 

modifications and clarifications, our 

longstanding guidance on procedural 

steps MA plans must take to verify an 

individual’s eligibility for enrollment in 

a chronic condition SNP (C–SNP). C– 

SNPs are SNPs that restrict enrollment 

to special needs individuals with 

specific severe or disabling chronic 

conditions, defined at § 422.2. By 

codifying the verification requirements, 

we intend to provide transparency and 

stability for MA organizations offering 

C–SNPs and other interested parties 


ddrumheller on DSK120RN23PROD with PROPOSALS2
Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78563 

149CMS provides an outline of the Pre-enrollment 

Qualification Assessment Tool in section 40.2.1 of 

chapter 16–B of the Medicare Managed Care 

Manual (MMCM). In 2017, CMS released a memo 

entitled, ‘‘Discontinuation of CMS Approval 

Process for C–SNP Pre-Enrollment Qualification 

Assessment Tool,’’ stating that we would no longer 

require chronic condition special needs plans (C– 

SNPs) to seek CMS approval prior to using a PreEnrollment Qualification Assessment Tool. CMS 

approval is granted for tools that meet the standards 

articulated in section 40.2.1 of the MMCM and 

individual review and approval of plan-specific 

tools is not required. Therefore, MA organizations 

are no longer required to submit these tools 

individually to CMS for approval so long as the 

standards outlined in the guidance are met. 

150This guidance can be found in chapter 16–B, 

Special Needs Plans, section 40.2 of the Medicare 

Managed Care Manual. 

about this aspect of the MA program. It 

will also clarify the SNP’s roles and 

responsibilities and further assist MA 

organizations in meeting the 

requirements pertaining to verification 

of eligibility for C–SNPs. 

Specifically, we propose in new 

§ 422.52(f)(1) to codify existing guidance 

stating that for enrollments into a C– 

SNP, the MA organization must contact 

the individual applicant’s current 

physician to confirm that the enrollee 

has the specific severe or disabling 

chronic condition(s). Although the 

current sub-regulatory guidance in 

chapter 16–B, section 40.2.1 of the 

Medicare Managed Care Manual refers 

only to the applicant’s existing provider, 

we believe that a physician—either the 

applicant’s primary care physician or a 

specialist treating the qualifying 

condition(s)—should provide the 

required verification of the applicant’s 

condition to ensure the accuracy and 

integrity of the verification process. 

Therefore, we are proposing to use the 

term ‘‘physician’’ throughout proposed 

new § 422.52(f). 

To further clarify the verification 

process, we also propose in new 

§ 422.52(f)(1)(i) that the physician must 

be the enrollee’s primary care physician 

or specialist treating the chronic 

condition, or conditions in the case of 

an individual seeking enrollment in a 

multi-condition C–SNP. The MA 

organization may either (1) as proposed 

at new § 422.52(f)(1)(i), contact the 

applicant’s physician or physician’s 

office and obtain verification of the 

condition prior to enrollment, or (2) as 

proposed at new § 422.52(f)(1)(ii), use a 

Pre-enrollment Qualification 

Assessment Tool (PQAT) prior to 

enrollment and subsequently (which 

can be after enrollment) obtain 

verification of the condition(s) from the 

enrollee’s physician no later than the 

end of the individual’s first month of 

enrollment in the C–SNP.149 Both 

proposed options are discussed in the 

current guidance. We continue to 

believe that these procedures will allow 

the MA organization to efficiently serve 

special needs populations while 

maintaining the integrity of SNP 

offerings under the MA program. 

As part of this process, we propose at 

new § 422.52(f)(1)(i) that verification of 

the chronic condition(s) from the 

applicant’s primary care physician or 

treating specialist must be in a form and 

manner authorized by CMS. Existing 

guidance states that this verification can 

be in the form of a note from a provider 

or the provider’s office or documented 

telephone contact with the physician or 

physician’s office confirming that the 

enrollee has the specific severe or 

disabling chronic condition. These 

would remain acceptable under this 

proposal. Performing this preenrollment verification with the 

applicant’s primary care physician or 

specialist treating the qualifying 

condition will mean that the C–SNP 

may process the enrollment promptly. 

Use of the PQAT requires both preenrollment and post-enrollment actions 

by the C–SNP to conduct an assessment 

and subsequently confirm the 

information. The PQAT, per existing 

guidance,150 would collect information 

about the chronic condition(s) targeted 

by the C–SNP directly from the enrollee 

and must include a signature line for a 

physician to confirm the individual’s 

eligibility for C–SNP enrollment. In 

order for the PQAT to be complete, a 

physician must be the person who goes 

through the PQAT with the enrollee. 

The physician that goes through the 

PQAT with the enrollee can be either 

the enrollee’s physician or a physician 

employed or contracted by the plan. A 

physician must later review the 

document to confirm that the 

information supports a determination 

that the enrollee is eligible for the C– 

SNP, even without their presence at the 

time of the determination by the 

physician. The physician providing the 

review and signature must be the 

enrollee’s physician. Ultimately, a 

physician’s review of and signature on 

the completed PQAT provide 

verification of the applicant’s special 

needs status with regards to the 

applicable chronic condition(s). 

Currently, C–SNPs are not required to 

submit the PQAT to CMS for review and 

approval before the PQAT is used by the 

C–SNP and CMS proposes to codify that 

policy. The PQAT must meet the 

standards articulated in proposed 

§ 422.52(f)(1)(ii)(A), and therefore 

review and approval of plan-specific 

tools by CMS are not required. 

• As proposed at 

§ 422.52(f)(1)(ii)(A)(1), the PQAT must 

include a set of clinically appropriate 

questions relevant to the chronic 

condition(s) on which the C–SNP 

focuses. For example, an MA 

organization sponsoring a Diabetes 

Mellitus C–SNP would perhaps include 

questions related to diagnoses of 

diabetes, such as blood glucose level or 

whether the enrollee is currently taking 

a medication for diabetes mellitus. 

• As proposed at 

§ 422.52(f)(1)(ii)(A)(2), the PQAT must 

gather information on the applicant’s 

past medical history, current signs and/ 

or symptoms, and current medications 

sufficient to provide reliable evidence 

that the applicant has the applicable 

condition(s). 

• As proposed at 

§ 422.52(f)(1)(ii)(A)(3), the PQAT must 

include the date and time of the 

assessment if completed during a faceto-face interview with the applicant, or 

the receipt date if the C–SNP receives 

the completed PQAT by mail or by 

electronic means (if available). 

• As proposed at 

§ 422.52(f)(1)(ii)(A)(4), the PQAT must 

include a signature line for and be 

signed by a physician to confirm the 

individual’s eligibility for C–SNP 

enrollment. (We are also proposing that 

this signature be from the applicant/ 

enrollee’s primary care physician or 

treating specialist.) 

• As proposed at § 422.52(f)(1)(ii)(B), 

the C–SNP must conduct a postenrollment confirmation of each 

enrollee’s information and eligibility 

using medical information (medical 

history, current signs and/or symptoms, 

diagnostic testing, and current 

medications) provided by the enrollee’s 

primary care physician or the specialist 

treating the enrollee’s chronic 

condition. 

• As proposed at § 422.52(f)(1)(ii)(C), 

the C–SNP must include the 

information gathered in the PQAT and 

used in this verification process in the 

records related to or about the enrollee 

that are subject to the confidentiality 

requirements in § 422.118. 

• As proposed at § 422.52(f)(1)(ii)(D), 

the C–SNP must track the total number 

of enrollees and the number and percent 

by condition whose post-enrollment 

verification matches the pre-enrollment 

assessment and the data and supporting 

documentation must be made available 

upon request by CMS. 

In addition, we propose to codify at 

§ 422.52(f)(1)(ii)(E) our longstanding 


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151This guidance can be found in chapter 2, 

section 20.10, and chapter 16–B, Special Needs 

Plans, section 40.2 of the Medicare Managed Care 

Manual. 

152https://www.cms.gov/regulations-andguidance/guidance/manuals/downloads/ 

mc86c16b.pdf. 

guidance 151 to MA organizations 

offering C–SNPs that choose see to use 

a PQAT that the MA organization has 

until the end of the first month of 

enrollment to confirm that the 

individual has the qualifying 

condition(s) necessary for enrollment 

into the C–SNP. If the C–SNP cannot 

confirm that the enrollee has the 

qualifying condition(s) within that time, 

the C–SNP has the first seven calendar 

days of the following month (i.e., the 

second month of enrollment) in which 

to send the enrollee notice of 

disenrollment for not having the 

qualifying condition(s). Disenrollment is 

effective at the end of the second month 

of enrollment; however, as also outlined 

in current guidance, the C–SNP must 

continue the individual’s enrollment in 

the C–SNP if confirmation of the 

qualifying condition(s) is obtained at 

any point prior to the end of the second 

month of enrollment. We propose to 

codify at § 422.52(f)(1)(ii)(F), consistent 

with existing guidance, that the C–SNP 

must continue the enrollment of the 

individual in the C–SNP if the C–SNP 

confirms the qualifying condition(s) 

prior to the disenrollment effective date. 

Lastly, we propose to codify at 

§ 422.52(f)(1)(iii) that the C–SNP is 

required to have the individual’s current 

physician (primary care physician or 

specialist treating the qualifying 

condition) administer the PQAT directly 

with the enrollee or provide 

confirmation (with or without the 

presence of the enrollee) that the 

information in the document supports a 

determination that the individual is 

eligible for the C–SNP. Once the 

physician has confirmed that the PQAT 

contains information that supports the 

applicant’s chronic condition and signs 

it, the PQAT is complete. Without a 

physician’s signature, the process is 

incomplete, and thus, the applicant 

must be denied enrollment if the 

enrollment has not yet happened or 

disenrolled by the end of the second 

month if the applicant had been 

enrolled. If the individual is disenrolled 

because the person’s eligibility cannot 

be verified, SNPs must recoup any 

agent/broker compensation consistent 

with § 422.2274(d)(5)(ii). 

These proposals represent the 

codification of existing guidance 

outlining the procedural steps MA 

organizations currently take to verify an 

individual’s eligibility for enrollment in 

a C–SNP, with minor modifications and 

clarifications. Therefore, we believe that 

this proposal would not result in a new 

or additional paperwork burden, as the 

policy to verify eligibility for C–SNPs 

has been in existence for some time. All 

burden impacts related to the SNP 

eligibility verification procedures have 

already been accounted for under OMB 

control number 0938–0753 (CMS–R– 

267). These requirements have been 

previously implemented and are 

currently being followed by MA 

organizations. Similarly, we do not 

believe the proposed changes would 

have any impact to the Medicare Trust 

Fund. 

B. I–SNP Network Adequacy 

In accordance with § 422.116, CMS 

conducts evaluations of the adequacy of 

provider networks of all MA 

coordinated care plans to ensure access 

to covered benefits for enrollees. For 

MA coordinated care plans, which 

generally base coverage or cost sharing 

on whether the provider that furnishes 

services to an MA enrollee is in-network 

or out-of-network, these evaluations are 

particularly important. All MA special 

needs plans (SNP) are coordinated care 

plans and subject to the current 

requirements for network adequacy. 

Within the MA program, SNPs are 

classified into three distinct types: 

Chronic Care special needs plan (C– 

SNP), Dual Eligible special needs plan 

(D–SNP), and Institutional special needs 

plan (I–SNP). An I–SNP is a SNP that 

restricts enrollment to MA-eligible 

individuals who meet the definition of 

institutionalized and institutionalizedequivalent. One specific subtype of I– 

SNP is the facility-based I–SNP. Here, 

we use the term (‘‘facility-based I–SNP’’) 

to refer to an I–SNP that restricts 

enrollment to MA-eligible individuals 

who meet the definition of 

institutionalized; owns or contracts with 

at least one institution, specified in the 

definition of institutionalized in § 422.2, 

for each county within the plan’s 

county-based service area; and owns or 

has a contractual arrangement with each 

institutional facility serving enrollees in 

the plan. Historically, the I–SNP 

industry has stated that CMS’s current 

network adequacy criteria under 

§ 422.116 create challenges for facilitybased I–SNPs because facility-based I– 

SNP enrollees access services and seek 

care in a different way than enrollees of 

other plan types. 

In the ‘‘Medicare Program; Contract 

Year 2024 Policy and Technical 

Changes to the Medicare Advantage 

Program, Medicare Prescription Drug 

Benefit Program, Medicare Cost Plan 

Program, Medicare Parts A, B, C, and D 

Overpayment Provisions of the 

Affordable Care Act and Programs of 

All-Inclusive Care for the Elderly; 

Health Information Technology 

Standards and Implementation 

Specifications’’ proposed rule, which 

appeared in the Federal Register on 

December 27, 2022 (87 FR 79452) (‘‘the 

December 2022 proposed rule’’), we 

explained in detail how I–SNPs restrict 

enrollment to MA-eligible individuals 

who are institutionalized or 

institutionalized-equivalent, as those 

terms are defined in § 422.2 and 

proposed new definitions for the 

different types of I–SNPs. As a result, 

the enrollees in I–SNPs are individuals 

who continuously reside in or are 

expected to continuously reside for 90 

days or longer in one of the specified 

facilities listed in the definition of 

‘‘institutionalized’’ at § 422.2 or 

individuals (‘‘institutionalizedequivalent’’) who are living in the 

community but require an institutional 

level of care. We refer readers to the 

December 2022 proposed rule for a more 

detailed discussion of the eligibility 

requirements for I–SNPs. (87 FR 79566 

through 79568) See also chapter 16–B, 

section 20.3 of the Medicare Managed 

Care Manual.152 Our use of the term 

‘‘facility-based I–SNP’’ in this proposed 

rule aligns with the proposed definition 

of ‘‘Facility-based Institutional special 

needs plan (FI–SNP)’’ in the December 

2022 proposed rule. 

Per section 1859(f)(2) of the Act, I– 

SNPs restrict enrollment to MA-eligible 

individuals who, for 90 days or longer, 

have had or are expected to need the 

level of services provided in a long-term 

care (LTC) facility, which includes: a 

skilled nursing facility (SNF), a nursing 

facility (NF), an intermediate care 

facility for individuals with intellectual 

disabilities (ICF/IDD), an inpatient 

psychiatric hospital, a rehabilitation 

hospital, an LTC hospital, or a swingbed hospital. See § 422.2 for the 

definition of ‘‘institutionalized’’ for the 

details of the types of facilities. Facilitybased I–SNPs serve a vulnerable cohort 

of Medicare beneficiaries with well over 

95 percent of facility-based I–SNP 

enrollees being eligible for both 

Medicare and Medicaid. Generally, 

facility-based I–SNP enrollees reside 

either temporarily or permanently in an 

institution, therefore, these enrollees 

typically receive most of their health 

care services through or at the facility in 

which they reside, most often a SNF. As 

a result of the way that these enrollees 

receive covered services, CMS’s 

established network adequacy time and 

distance standards under § 422.116 may 


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153https://www.cms.gov/files/document/ 

medicare-advantage-and-section-1876-cost-plannetwork-adequacy-guidance08302022.pdf. 

not be a meaningful way to measure 

provider network adequacy for and 

ensure access to covered benefits for 

enrollees of this plan type. Time and 

distance standards are created using 

several factors, including pattern of 

care. In order to comply with the 

network evaluation requirements in 

§ 422.116, a facility-based I–SNP must 

contract with sufficient providers of the 

various specialties within the time and 

distance requirements specified in that 

regulation. The I–SNP industry has 

indicated through public comments and 

in prior correspondence to CMS that 

many facility-based I–SNPs have 

difficulty contracting with providers 

outside their facilities, due to their 

model of care. This is because these 

providers know that enrollees of the I– 

SNP will not routinely seek care with 

these providers since they generally do 

not travel away from the facility for 

care. 

The MA organizations offering and 

those that are interested in offering 

facility-based I–SNPs have raised 

questions about whether our network 

standards are appropriate considering 

the nature of the facility-based I–SNP 

coverage model. The residential nature 

of this model creates inherent 

differences in patterns of care for 

facility-based I–SNP enrollees as 

compared to the prevailing patterns of 

community health care delivery in other 

MA plan types. For example, most 

residents of a facility receive their care 

from a provider at the facility rather 

than traveling to a provider outside the 

facility whereas individuals who live at 

home in the community would need to 

travel to a provider to receive health 

care services. 

To address these concerns, CMS is 

proposing to adopt a new exception for 

facility-based I–SNP plans from the 

network evaluation requirements. This 

provision would apply only to facilitybased I–SNPs. 

CMS adopted minimum access 

requirements for MA coordinated care 

plans (which include all SNPs) in 

§ 422.112 and network evaluation 

criteria in § 422.116 as means to 

implement and ensure compliance with 

section 1852(d)(1)(A) of the Act, which 

permits MA plans to limit coverage to 

items and services furnished by or 

through a network of providers subject 

to specific exceptions (such as 

emergency medical services) and so 

long as the MA organization makes 

benefits available and accessible to their 

enrollees. Currently, § 422.116(f) allows 

an MA plan to request an exception to 

network adequacy criteria when both of 

the following occur: (1) certain 

providers or facilities are not available 

for the MA plan to meet the network 

adequacy criteria as shown in the 

Provider Supply file (that is, a crosssectional database that includes 

information on provider and facility 

name, address, national provider 

identifier, and specialty type and is 

posted by State and specialty type); and 

(2) the MA plan has contracted with 

other providers and facilities that may 

be located beyond the limits in the time 

and distance criteria, but are currently 

available and accessible to most 

enrollees, consistent with the local 

pattern of care. In evaluating exception 

requests, CMS considers whether: (i) the 

current access to providers and facilities 

is different from the Health Service 

Delivery (HSD) reference file (as defined 

at 42 CFR 422.116(a)(4)(i)) and Provider 

Supply files for the year; (ii) there are 

other factors present, in accordance 

with § 422.112(a)(10)(v), that 

demonstrate that network access is 

consistent with or better than the 

Traditional Medicare pattern of care; 

and (iii) the approval of the exception 

is in the best interests of beneficiaries. 

CMS has provided examples of 

situations that meet the first 

requirement for an exception to be 

requested in sub-regulatory guidance, 

specifically the Medicare Advantage 

and section 1876 Cost Plan Network 

Adequacy Guidance.153 The following 

examples of situations where providers 

or facilities are not available to contract 

with the MA plan do not account for the 

issues that are unique to facility-based 

I–SNPs: 

• Provider is no longer practicing (for 

example, deceased, retired), 

• Provider does not contract with any 

organizations or contracts exclusively 

with another organization, 

• Provider does not provide services 

at the office/facility address listed in the 

supply file, 

• Provider does not provide services 

in the specialty type listed in the supply 

file, 

• Provider has opted out of Medicare, 

or 

• Provider is sanctioned and on the 

List of Excluded Individuals and 

Entities. 

In addition, the use of Traditional 

Medicare telehealth providers or mobile 

providers and the specific patterns of 

care in a community that would be the 

basis for an approval exception do not 

account for the provider network issues 

unique to facility-based I–SNPs that we 

propose to address in this rule. 

Therefore, we are proposing to amend 

our network adequacy regulations at 

§ 422.116(f) to establish an additional 

exception to the current CMS network 

adequacy requirements outlined in 

§ 422.116 and we are proposing that this 

exception be specific to facility-based I– 

SNPs. Under this proposal, facilitybased I–SNPs would not be required to 

meet the current two prerequisites to 

request an exception from the network 

adequacy requirements in § 422.116 but 

would have alternate bases on which to 

request an exception. 

First, CMS is proposing to broaden 

the acceptable rationales for an 

exception from the requirements in 

§ 422.116(b) through (e) for facilitybased I–SNPs. We are proposing that a 

facility-based I–SNP may request an 

exception from the network adequacy 

requirements in § 422.116 when one of 

two situations occurs. To add these 

proposed new rationales to 

§ 422.116(f)(1), we are reorganizing the 

current regulation text; the two current 

requirements for an exception request 

will be moved to new paragraphs 

(f)(1)(i)(A) and (B) and the proposed 

new rationales for an exception request 

will be in new paragraphs (f)(1)(ii)(A) 

and (B). Second, we are proposing new 

considerations CMS will use when 

determining whether to grant an 

exception under § 422.116(f) that are 

specific to the proposed new acceptable 

rationales for an exception request. We 

are proposing to add a new paragraph 

(f)(2)(iv) to specify the proposed new 

considerations that will apply to the 

new exceptions for facility-based I– 

SNPs, which will be added to the 

existing considerations in 

§ 422.116(f)(2). 

Our proposal includes new bases on 

which only facility-based I–SNPs may 

request an exception from the network 

adequacy requirements, additional 

considerations for CMS when deciding 

whether to approve an exception 

request from a facility-based I–SNP, and 

a new contract term for facility-based I– 

SNPs that receive the exception from 

the § 422.116 network adequacy 

evaluation. Because we evaluate 

network adequacy and grant an 

exception at the contract level, the 

proposed new exception is limited to 

contracts that include only facilitybased I–SNPs. 

The first proposed new basis for an 

exception request is that a facility-based 

I–SNP is unable to contract with certain 

specialty types required under 

§ 422.116(b) because of the way 

enrollees in facility-based I–SNPs 

receive care. For purposes of this first 

proposed new basis for an exception, 

the inability to contract means the MA 

organization offering the facility-based 


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I–SNP could not successfully negotiate 

and establish a contract with a provider, 

including individual providers and 

facilities. This is broader than the 

existing condition for an exception that 

certain providers are unavailable for the 

MA plan. The non-interference 

provision at section 1854(a)(6) of the 

Act prohibits CMS from requiring any 

MA organization to contract with a 

particular hospital, physician, or other 

entity or individual to furnish items and 

services or require a particular price 

structure for payment under such a 

contract. As such, CMS cannot assume 

the role of arbitrating or judging the 

bona fides of contract negotiations 

between an MA organization and 

available providers or facilities. 

Currently, CMS does not regard an MA 

organization’s inability to contract with 

a provider as a valid rationale for an 

exception from the network adequacy 

evaluation but interested parties have 

indicated through public comments and 

in prior correspondence to CMS that, 

historically, facility-based I–SNP plans 

have encountered significant struggles 

contracting with the necessary number 

of providers to meet CMS network 

adequacy standards due to their unique 

care model. We propose to add this new 

basis for an exception request to 

§ 422.116(f)(1)(ii)(A). CMS is also 

proposing that its decision whether to 

approve an exception for a facility-based 

I–SNP on this specific basis (that the I– 

SNP is unable to contract with certain 

specialty types required under 

§ 422.116(b) because of the way 

enrollees in facility-based I–SNPs 

receive care) will be based on whether 

the facility-based I–SNP submits 

evidence of the inability to contract 

with certain specialty types required 

under § 422.116 due to the way 

enrollees in facility-based I–SNPs 

receive care. For example, an 

organization could submit letters or 

emails to and from the providers’ offices 

demonstrating that the providers were 

declining to contract with any facilitybased I–SNP. CMS proposes to add this 

requirement in a new paragraph 

(f)(2)(iv)(A). Under this proposal, CMS 

will also consider the existing factors in 

addition to the new factors proposed 

here that are unique to the specific new 

exception proposed for facility-based I– 

SNPs. We solicit comment on this 

proposed new rationale for an exception 

from the network adequacy 

requirements in § 422.116(b) through (e) 

and on the type of evidence we should 

consider in determining whether to 

grant an exception. 

We are also proposing a second basis 

on which a facility-based I–SNP may 

request an exception from the network 

adequacy requirements in § 422.116(b) 

through (e) if: 

(1) A facility-based I–SNP provides 

sufficient and adequate access to basic 

benefits through additional telehealth 

benefits (in compliance with § 422.135) 

when using telehealth providers of the 

specialties listed in paragraph (d)(5) in 

place of in-person providers to fulfill 

network adequacy standards in 

paragraphs (b) through (e). 

(2) Substantial and credible evidence 

that sufficient and adequate access to 

basic benefits is provided to enrollees 

using additional telehealth benefits (in 

compliance with § 422.135) furnished 

by providers of the specialties listed in 

paragraph (d)(5) of this section and the 

facility-based I–SNP covers out-ofnetwork services furnished by a 

provider in person when requested by 

the enrollee as provided in 

§ 422.135(c)(1) and (2), with in-network 

cost sharing for the enrollee. 

We believe it is appropriate to permit 

exceptions in these situations because 

enrollees in facility-based I–SNP plans 

do not generally travel to receive care, 

so the time and distance standards that 

apply to other plan types are not 

appropriate for I–SNP plans. As part of 

this proposal, we are proposing to add 

to the factors that CMS will consider 

whether to approve the exception 

request a new factor specifically related 

to this type of exception. 

Finally, we are proposing regulation 

text to ensure that the exception for 

facility-based I–SNPs is used by and 

available only to facility-based I–SNPs. 

We are proposing a new paragraph (f)(3) 

at § 422.116 to require any MA 

organization that receives the exception 

provided for facility-based I–SNPs to 

agree to offer only facility-based I–SNPs 

on the contract that receives the 

exception. To support the provision 

outlined at § 422.116(f)(3), CMS also 

proposes to add, at § 422.504(a)(21), a 

new contract provision that MA 

organizations must not establish 

additional plans (or plan benefit 

packages, called PBPs) that are not 

facility-based I–SNPs to a contract that 

is within the scope of proposed 

§ 422.116(f)(3). This will ensure MA 

organizations that have received the 

exception do not submit additional 

PBPs that are not facility-based I–SNPs 

to their facility-based I–SNP-only 

contracts. CMS reviews networks at the 

contract level which means if an MA 

organization were to add an MA plan 

(that is, a PBP) that is not a facilitybased I–SNP to a contract, the exception 

we propose here would not be 

appropriate. We welcome comment on 

this aspect of our proposal and whether 

additional guardrails are necessary to 

ensure that the proposed new exception 

from network adequacy evaluations is 

limited to facility-based I–SNPs 

consistent with our rationale for it. 

Under our proposal, facility-based I– 

SNPs would still be required to adhere 

to § 422.112 regarding access to covered 

benefits. For example, 

§ 422.112(a)(1)(iii) requires an MA 

coordinated care plan to arrange for and 

cover any medically necessary covered 

benefit outside of the plan provider 

network, but at in-network cost sharing, 

when an in-network provider or benefit 

is unavailable or inadequate to meet an 

enrollee’s medical needs. Because all 

SNPs, including facility-based I–SNPs, 

are coordinated care plans, this 

beneficiary protection applies to them. 

Similarly, the timeliness of access to 

care requirements newly adopted at 

§ 422.112(a)(6)(i) would apply. We 

believe that our proposal appropriately 

balances the need to ensure access to 

covered benefits for enrollees in facilitybased I–SNPs while recognizing the 

unique way this type of MA plan 

furnishes benefits and how enrollees 

generally receive services at the 

institution where the enrollee resides. 

Expanding this proposed new exception 

from the § 422.116 network adequacy 

requirements to other I–SNPs that enroll 

special needs individuals that reside in 

the community or other SNPs or MA 

plans that are not designed to furnish 

services to institutionalized special 

needs individuals would not be 

appropriate or serve the best interests of 

the Medicare program or Medicare 

beneficiaries. 

We request comment on this proposal. 

C. Increasing the Percentage of Dually 

Eligible Managed Care Enrollees Who 

Receive Medicare and Medicaid 

Services From the Same Organization 

(§§ 422.503, 422.504, 422.514, 422.530, 

and 423.38) 

Dually eligible individuals face a 

complex range of enrollment options 

based on MA plan types (that is, HMOs, 

PPOs, private fee-for-service plans, MA 

special needs plans, etc.), enrollment 

eligibility, and plan performance, but 

which do not consider the enrollee’s 

Medicaid choice. Further, many of the 

coverage options available to dually 

eligible individuals—even including 

many dual eligible special needs plans 

(D–SNP)—do not meaningfully integrate 

Medicare and Medicaid, chiefly because 

the parent organization of the D–SNP 

does not also provide the enrollee’s 

Medicaid services. The current managed 

care enrollment and eligibility policies 

have resulted in a proliferation of such 

D–SNPs and leave dually eligible 


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154 42 CFR 422.2 (definition of ‘‘aligned 

enrollment’’). 

155MedPAC response to Congressional request for 

information on dual-eligible beneficiaries, page 2, 

January 13, 2023. 

156MACPAC response to proposed rule on policy 

and technical changes to Medicare Advantage and 

Medicare Part D for contract year 2024 (CMS–4201– 

P), page 1, February 13, 2023. 157MACPAC response to request for information 

on data and recommendations to improve care for 

dually eligible beneficiaries, page 3, January 13, 

2023. 158Effective 2025, FIDE SNPs as defined in 

§ 422.2 are required to have EAE and would 

therefore be AIPs by definition. To receive the FIDE 

designation, a D–SNP would be required to provide 

nearly all Medicaid services, including long-term 

services and supports, Medicaid behavioral health 

services, home health and DME. 159HIDE SNPs as defined in § 422.2 are required 

to cover long-term services and supports or 

behavioral health services but may have more 

Medicaid services carved out relative to plans with 

the FIDE designation. HIDE SNPs that also operate 

with EAE would meet the definition of an AIP, but 

there is no requirement for EAE for the HIDE 

designation. 

160AIPs as defined in § 422.561 are D–SNPs with 

EAE, where the companion Medicaid MCO covers 

Medicaid benefits including primary care and acute 

care, Medicare cost-sharing, and at a minimum one 

of the following: home health services, medical 

supplies, equipment and appliances (DME), or 

nursing facility services. 

161 Dual eligible special needs plans (D–SNPs) are 

defined at § 422.2. ‘‘Coordination-only’’ D–SNPs are 

D–SNPs that neither meet the FIDE SNP nor HIDE 

SNP definition at § 422.2 and for which there are 

no Federal requirements to cover any Medicaid 

benefits either directly or through an affiliated 

Medicaid managed care plan. 

individuals susceptible to aggressive 

marketing tactics from agents and 

brokers throughout the year. 

Over the last decade, we have taken 

numerous steps to improve the 

experiences and outcomes for dually 

eligible individuals through various 

forms of Medicare-Medicaid integrated 

care. Despite progress, there remain a 

significant number of enrollees who 

receive Medicare services through one 

managed care entity and Medicaid 

services through a different entity 

(misaligned enrollment), rather than 

from one organization delivering both 

Medicare and Medicaid services 

(aligned enrollment 154). In the final rule 

titled Medicare and Medicaid Programs; 

Policy and Technical Changes to the 

Medicare Advantage, Medicare 

Prescription Drug Benefit, Programs of 

All-Inclusive Care for the Elderly 

(PACE), Medicaid Fee-For-Service, and 

Medicaid Managed Care Programs for 

Years 2020 and 2021 (CMS–4185–F) 

(hereinafter referred to as the April 2019 

final rule), we expressed our belief that 

aligned enrollment, and especially 

exclusively aligned enrollment, is a 

critical part of improving experiences 

and outcomes for dually eligible 

individuals. Exclusively aligned 

enrollment (EAE) occurs when 

enrollment in a parent organization’s D– 

SNP is limited to individuals who are 

also enrolled in that organization’s 

Medicaid managed care organization. 

Congress’ advisory commissions have 

emphasized similar themes: the 

Medicare Payment Advisory 

Commission (MedPAC) has ‘‘long 

believed that D–SNPs should have a 

high level of integration so they have 

the proper incentives to coordinate care 

across Medicare and Medicaid.’’ 155 The 

Medicaid and CHIP Payment and 

Access Commission’s (MACPAC’s) 

‘‘long-term vision is for all dually 

eligible beneficiaries to be enrolled in 

an integrated model’’ 156 and has noted 

that a key feature of integrated care is 

‘‘financial alignment where a single 

entity receives a single payment to cover 

all Medicare and Medicaid services.’’ 157

Longer term, for dually eligible 

individuals who are in Medicare and 

Medicaid managed care, we believe that 

we should continue to drive toward 

increasing aligned enrollment until it is 

the normative, if not only, managed care 

enrollment scenario. Our proposals here 

represent an incremental step in that 

direction, balancing our long-term 

policy vision with our interest in 

limiting disruption in the short term. 

For dually eligible individuals that elect 

MA plans, we are focused on increasing 

enrollment in integrated D–SNPs: fully 

integrated dual eligible special needs 

plans (FIDE SNPs),158 highly integrated 

dual eligible special needs plans (HIDE 

SNPs),159 and applicable integrated 

plans (AIPs).160 These D–SNP types 

more meaningfully integrate Medicare 

and Medicaid services than 

coordination-only D–SNPs 161 that are 

not also AIPs. 

In this section we describe 

interconnected proposals that would (1) 

replace the current quarterly special 

enrollment period (SEP) with a onetime-per month SEP for dually eligible 

individuals and other LIS eligible 

individuals to elect a standalone PDP, 

(2) create a new integrated care SEP to 

allow dually eligible individuals to elect 

an integrated D–SNP on a monthly 

basis, (3) limit enrollment in certain D– 

SNPs to those individuals who are also 

enrolled in an affiliated Medicaid 

managed care organization (MCO), and 

(4) limit the number of D–SNPs an MA 

organization, its parent organization, or 

an entity that shares a parent 

organization with the MA organization, 

can offer in the same service area as an 

affiliated Medicaid MCO in order to 

reduce ‘‘choice overload’’ of D–SNP 

options in certain markets. Affiliated 

Medicaid MCOs are Medicaid MCOs 

offered by the MA organization, the 

same parent organization, or another 

subsidiary of the parent organization. In 

combination, our proposals would 

create more opportunities for dually 

eligible individuals to elect integrated 

D–SNPs, more opportunities to switch 

to Traditional Medicare, and fewer 

opportunities to enroll in MA–PD plans 

that do not integrate Medicare and 

Medicaid services. Table HC1 

summarizes the combined effects of 

these proposals, then we describe each 

proposal in greater detail. 


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78568 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

162We propose that during AEP and other 

available enrollment periods, MA organizations 

would not be permitted to enroll dually eligible 

individuals into a D–SNP where such enrollment 

would not result in aligned enrollment with an 

affiliated Medicaid MCO offered in the same service 

area (that is, a Medicaid MCO offered by the MA 

organization, its parent organization, or another 

subsidiary of the parent organization). 

163Medicare Program; Policy and Technical 

Changes to the Medicare Advantage and the 

Medicare Prescription Drug Benefit Programs 

(CMS–4085–F) (75 FR 19720 (April 15, 2010)). 

1. Changes to the Special Enrollment 

Periods for Dually Eligible Individuals 

and Other LIS Eligible Individuals 

Section 1860D–1(b)(3)(D) of the Act 

directs the Secretary to establish a SEP 

for full-benefit dually eligible 

individuals under Part D. The SEP, 

subsequently referred to as the 

continuous dual SEP, codified at 

§ 423.38(c)(4), was later extended to all 

other subsidy-eligible beneficiaries by 

regulation.163 The continuous dual SEP 

allowed eligible beneficiaries to make 

Part D enrollment changes (that is, 

enroll in, disenroll from, or change Part 

D plans, including Medicare Advantage 

Prescription Drug (MA–PD) plans) 

throughout the year, unlike other Part D 

enrollees who generally may switch 

plans only during the AEP or via other 

applicable SEPs each year. 

In the April 2018 final rule, we cited 

concerns with usage of the continuous 

dual SEP related to enrollees changing 

plans frequently, hindering care 

coordination efforts by D–SNPs; plans 

having less incentive to innovate and 

invest in serving high-cost enrollees 

who may disenroll at any time; and 

agents and brokers targeting dually 

eligible individuals due to their ability 

to make enrollment elections 

throughout the year (83 FR 16514). We 

had considered limiting use of the SEP 

to once per calendar year, limiting use 

of the SEP to two or three uses per 

calendar year, or prohibiting use of the 

SEP for enrollment into non-integrated 

MA–PD plans, but allowing continuous 

use of the SEP to allow eligible 

beneficiaries to enroll into (a) integrated 

D–SNPs for dually eligible individuals 

or (b) standalone PDPs (83 FR 16515). 

We received a mix of concern and 

support from commenters on our 

proposals. 


ddrumheller on DSK120RN23PROD with PROPOSALS2EP15NO23.020</GPH>

TABLE HCl: ENROLLMENT SCENARIOS UNDER CURRENT RULES AND 

PROPOSED AMENDMENT-INDIVIDUAL PERSPECTIVE 

(NOIE: This table does not include other applicable seps) 

Elect any MA plan during initial 

coverage election period (ICEP) or 

annual election period (AEP), or 

switch between any plans during 

MA open enrollment period (MAOEP 

Elect Medicare fee-for-service 

(FFS) and standalone prescription 

dru lan PDP , mid- ear 

Elect an integrated D-SNP (FIDE 

SNP, HIDE SNP, or AIP) as 

eli "ble, mid- ear 

Elect a non-integrated D-SNP or 

other MA lan, mid- ear 

Elect any MA plan during ICEP or 

AEP, or switches between any plans 

durin MA-OEP 

Elect Medicare FFS and standalone 

PDP, mid- ear 

Elect an MA plan, mid-year 

Permitted 

One change 

permitted per 

quarter(exceptthe 

last quarter) 

Permitted 

One change 

permitted per 

quarter(exceptthe 

last uarter 

Permitted, except individuals in 

Medicaid MCOs would not be able 

to select a misaligned D-SNP 

where applicable162 

Permitted each month 

Permitted each month, but must be 

aligned enrollment 

Not permitted 

Permitted 

Permitted each month 

Not permitted 

Our proposals create a new SEP and revise the duals/LIS SEP, but otherwise do not change the remaining SEPs. To 

highlight the changes in our proposals without overly complicating this table, we did not reference the other SEPs. 
Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78569 

164Medicare Program; Contract Year 2024 Policy 

and Technical Changes to the Medicare Advantage 

Program, Medicare Prescription Drug Benefit 

Program, Medicare Cost Plan Program, and 

Programs of All-Inclusive Care for the Elderly 

(CMS–4201–F) (88 FR 22122 (April 12, 2023)). 

165Medicare Program; Policy and Technical 

Changes to the Medicare Advantage and the 

Medicare Prescription Drug Benefit Programs 

(CMS–4085–F) (75 FR 19720 (April 15, 2010)). 

166Medicare Payment Advisory Commission, 

‘‘Report to Congress: Medicare Payment Policy,’’ 

March 2008. 

167 Dual eligible special needs plans (D–SNPs) are 

defined at § 422.2. ‘‘Coordination-only’’ D–SNPs are 

Continued 

Ultimately, the April 2018 final rule 

amended the continuous dual SEP to 

allow usage once per calendar quarter 

during the first nine months of the year 

(that is, one election during each of the 

following time periods: January–March, 

April–June, July–September). We noted 

that our changes struck a balance 

between allowing dually eligible 

individuals opportunities to change 

plans while also maintaining stability 

with care coordination and case 

management (83 FR 16515). 

The quarterly dual SEP reduced 

individuals moving from one Part D 

plan (including an MA–PD) to another 

Part D plan (including an MA–PD) as 

frequently. However, we have concerns 

with the quarterly dual SEP: 

• Marketing. We finalized numerous 

policies to reduce aggressive marketing 

tactics in the April 2023 final rule,164

but we remain concerned about 

marketing opportunities, especially 

when they focus on dually eligible 

individuals who, as a group, have lower 

levels of education, health literacy, and 

access to resources that could help 

overcome sub-optimal coverage 

decisions. Because the quarterly dual 

SEP still allows the vast majority of 

dually eligible individuals to enroll in 

almost any MA–PD plan, they remain a 

target for marketing activities from all 

types of plans throughout the year. 

• Ability to enroll in integrated D– 

SNPs. The quarterly dual SEP does not 

allow dually eligible individuals to 

enroll in integrated D–SNPs after those 

individuals have exhausted the 

opportunities allowed by the quarterly 

dual SEP. 

• Complexity for States. State 

Medicaid agencies have shown interest 

in opportunities to bring Medicare and 

Medicaid managed care enrollment 

policies into greater alignment and 

reduce complexity. The quarterly dual 

SEP has created some challenges related 

to aligning Medicare and Medicaid 

enrollment dates for dually eligible 

individuals seeking to enroll in 

integrated products. For example, 

California needed expenditure authority 

to waive § 438.56(e)(1) under a section 

1115(a) demonstration to allow for a 

Medicaid MCO disenrollment to be 

delayed during the last calendar quarter 

to maintain exclusively aligned 

enrollment with a corresponding D– 

SNP. This expenditure authority would 

not have been necessary if the dual SEP 

was available to make elections 

throughout the year. In the capitated 

financial alignment models of the 

Financial Alignment Initiative (FAI), we 

waived the quarterly dual SEP rules at 

State request to allow for monthly 

opportunities for individuals to enroll 

or disenroll. This alleviated the 

complexity of different Medicare and 

Medicaid enrollment periods and allows 

dually eligible individuals more 

opportunities to enroll in integrated 

products. 

• Complexity for enrollment 

counselors and individuals. Enrollment 

counselors such as State Health 

Insurance Assistance Programs (SHIPs) 

and State ombudsman programs have 

also noted that the once-per-quarter rule 

is complicated. Without any accessible 

central data source on who has already 

used the quarterly dual SEP, it is not 

clear to options counselors (or 

sometimes to beneficiaries themselves) 

what enrollment options are truly 

available to dually eligible individuals 

at any given time. 

To further protect Medicare 

beneficiaries, reduce complexity for 

States and enrollment counselors, and 

increasingly promote integrated care, we 

are proposing two SEP changes. Section 

1860D–1(b)(3)(D) of the Act requires the 

Secretary to establish special enrollment 

periods for full-benefit dually eligible 

individuals, although it does not specify 

the frequency or mechanics of those 

SEPs. Further, section 1860D–1(b)(3)(C) 

of the Act grants the Secretary the 

authority to create SEPs for individuals 

who meet other exceptional 

circumstances.165 Section 1859(f)(1) of 

the Act permits the Secretary to set forth 

regulations related to how MA 

organizations restrict the enrollment of 

individuals who are within one or more 

classes of special needs individuals. 

Section 1859(f)(6) establishes the 

authority to adopt a transition process to 

move dually eligible individuals out of 

SNPs when they are not eligible for the 

SNP. Section 1859(f)(8) of the Act also 

reflects an interest in and goal of 

furthering the integration of D–SNPs; 

the requirement for us to establish 

procedures for unified grievance and 

appeals processes and requirement, in 

section 1859(f)(8)(D), for a mandatory 

minimum level of integration illustrate 

how efforts to increase integration in 

implementing and adopting standards 

for the MA program further the goals of 

the program. Based on these authorities, 

we propose to amend § 423.38(c)(4)(i) to 

replace the quarterly dual SEP with a 

simpler new dual/LIS SEP. The 

proposed dual/LIS SEP would allow 

dually eligible and other LIS-enrolled 

individuals to enroll once per month 

into any standalone prescription drug 

plan. 

Functionally, the revised dual/LIS 

SEP would mean that such individuals 

could, in any month, switch PDPs or 

leave their MA–PD for Traditional 

Medicare plus a standalone PDP (plans 

that only offer prescription drug 

coverage). However, the dual/LIS SEP 

would no longer permit enrollment into 

MA–PD plans or changes between MA– 

PD plans, although such options would 

still be available where another election 

period permits. 

In conjunction, based on the statutory 

authorities described above, we also 

propose to create a new integrated care 

SEP at § 423.38(c)(35) for dually eligible 

individuals. This new integrated care 

SEP would allow enrollment in any 

month into FIDE SNPs, HIDE SNPs, and 

AIPs for those dually eligible 

individuals who meet the qualifications 

for such plans. 

In combination, our SEP proposals 

draw heavily from MedPAC’s 2008 

recommendation to Congress, which 

proposed eliminating dually eligible 

individuals’ ability to enroll in MA–PD 

plans, except special needs plans with 

State contracts, outside of open 

enrollment. MedPAC also recommended 

dually eligible individuals be able to 

disenroll from an MA–PD plan and 

return to Traditional Medicare at any 

time of the year.166

For dually eligible individuals, our 

two SEP proposals would allow a 

monthly election to: 

• Leave an MA–PD plan for 

Traditional Medicare by enrolling in a 

standalone PDP, 

• Switch between standalone PDPs, 

or 

• Enroll in an integrated D–SNP such 

as a FIDE, HIDE, or AIP. 

If an eligible individual attempts to 

use, or uses, both the monthly dual/LIS 

SEP and the integrated care SEP within 

the same month, the application date of 

whichever SEP is elected last in time is 

the SEP effectuated the first of the 

following month. 

As a result of these proposals, dually 

eligible and other LIS-eligible 

individuals, like other Medicare 

beneficiaries, would be able to enroll 

into non-AIP coordination-only D– 

SNPs 167 or other MA plans only during 


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78570 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

D–SNPs that neither meet the FIDE SNP nor HIDE 

SNP definition at § 422.2 and are not required to 

cover any Medicaid benefits. 

168We note that enrollment in a standalone PDP 

would not result in automatic disenrollment from 

a Medicare MA-only Private Fee-for-Service plan 

unless that plan also offers Part D. 

169 GAO Report to Congressional Requesters, 

Medicare Advantage Disenrollment, pages 19–20, 

June 2021. 170https://www.gao.gov/assets/gao-17-393.pdf. 171https://www.healthaffairs.org/doi/10.1377/ 

hlthaff.2015.0272. 

172There is no Federal prohibition on partialbenefit dually eligible individuals enrolling in HIDE 

SNPs. However, most States limit enrollment in 

HIDE SNPs to full-benefit dually eligible 

individuals. 

173Section 11404 of the Inflation Reduction Act 

(IRA) amended section 1860D–14 of the Act to 

expand eligibility for the full LIS to individuals 

with incomes up to 150 percent of the Federal 

poverty level (FPL) beginning on or after January 1, 

2024. See Medicare Program; Contract Year 2024 

Policy and Technical Changes to the Medicare 

Advantage Program, Medicare Prescription Drug 

Benefit Program, Medicare Cost Plan Program, and 

Programs of All-Inclusive Care for the Elderly 

(CMS–4201–F) (88 FR 22123 (April 12, 2023)). 

174Medicare Program; Contract Year 2019 Policy 

and Technical Changes to the Medicare Advantage, 

Medicare Cost Plan, Medicare Fee-for-Service, the 

Medicare Prescription Drug Benefit Programs, and 

the PACE Program (CMS–4182–F) (83 FR 16516 

(April 16, 2018)). 

the ICEP, AEP, or where another SEP 

permits. While the proposed changes 

constrain some enrollment options at 

certain times of the year, dually eligible 

individuals and other LIS-eligible 

individuals would never have fewer 

choices than people who are not dually 

or LIS eligible. 

We believe the proposed SEP changes 

would: 

• Create more opportunity for dually 

eligible or LIS individuals to leave MA– 

PD plans if MA is not working well for 

them, by providing an opportunity to 

enroll in a standalone PDP, which 

results in disenrollment from the MA– 

PD plan and enrollment in Traditional 

Medicare.168

• Reduce the incentive for most plans 

to deploy aggressive sales tactics 

targeted at dually eligible or LISenrolled individuals outside of the AEP. 

Based on our review of 2023 plans, 

approximately 5 percent of the plans 

that can currently enroll dually eligible 

individuals using the quarterly dual SEP 

would be available as options for dually 

eligible individuals using the proposed 

new monthly integrated care SEP. 

• Increase transparency for Medicare 

beneficiaries and enrollment 

counselors-such as SHIPs-on 

opportunities to change plans, by 

eliminating the need to determine 

whether the current once-per-quarter 

SEP opportunity had already been used. 

• Create more opportunities for 

enrollment into integrated D–SNPs 

through which an individual could 

receive Medicare and Medicaid services 

and care coordination from the same 

organization. 

• Reduce the burden on States 

working to align Medicaid MCO 

enrollment to D–SNP enrollment, 

particularly for States transitioning their 

FAI demonstrations to integrated D– 

SNPs (all FAI demonstration States 

waived the implementation of the 

quarterly dual SEP as it proved too 

operationally challenging to implement 

for Medicare-Medicaid Plans). 

• Strengthen incentives for MA 

sponsors to also compete for Medicaid 

managed care contracts. 

While there are advantages to the new 

proposed SEP changes, we recognize 

there are potential challenges: 

• In States with few or no integrated 

D–SNPs, dually eligible individuals 

would not be able to change MA–PD 

plans outside of the AEP, MA–OEP, or 

other available SEPs, limiting their 

ability to change plans as their needs 

change. Choices outside of AEP, MA– 

OEP, or other available SEPs would 

similarly be limited in States where 

integrated D–SNPs only serve limited 

geographic regions. 

• MA plans may have marginally less 

incentive to innovate and invest in 

meeting the needs of high-cost dually 

eligible enrollees in a situation where 

these enrollees may disenroll at any 

time. This could exacerbate the 

phenomenon of higher-cost dually 

eligible individuals disenrolling from 

MA.169 170 171

• Some dually eligible individuals 

would be able to change between 

integrated care plans monthly, which 

could hinder care coordination and case 

management efforts by those plans. 

• Finally, since LIS individuals 

without Medicaid are ineligible for 

integrated D–SNPs, our proposal would 

limit how the dual/LIS SEP can be used 

for these individuals compared to the 

current scope of the SEP. LIS eligible 

individuals without full Medicaid and 

partial-benefit dually eligible 

individuals would have the opportunity 

to disenroll from an MA–PD plan (to 

Traditional Medicare) in any month 

throughout the year, and could switch 

between standalone PDPs on a monthly 

basis, but—with few exceptions—could 

not use the new integrated care SEP to 

enroll in an MA–PD.172 These 

individuals could elect an MA–PD or 

non-AIP coordination-only D–SNP for 

which they are eligible only during the 

ICEP, the AEP, the MA–OEP (as 

applicable), or by using a different SEP. 

We estimate approximately one million 

partial-benefit dually eligible 

individuals and other LIS eligible 

individuals, or 7.5 percent of all 

individuals with LIS, would no longer 

be able to make quarterly MA–PD 

elections.173 Dually eligible and other 

LIS-eligible individuals would also 

continue to be eligible, if applicable, for 

other SEPs outlined in §§ 422.62(b) and 

423.38(c), which include circumstances 

like enrolling into a 5-star plan, change 

in residence, or enrollment in PACE.174

Section 423.40(c) currently provides 

that the effective date of an enrollment 

change in Part D during a special 

enrollment period specified in 

§ 423.38(c), including the existing SEP 

for dually eligible and other LIS-eligible 

individuals, will be the first day of the 

calendar month following the month in 

which the election is made, unless 

otherwise noted. We are considering 

using flexibilities at section 1851(f)(4) of 

the Act (as cross-referenced at section 

1860D–1(b)(1)(B)(iv) of the Act) and at 

§ 423.40(c) to establish a Medicare 

enrollment effective date for the 

proposed integrated care SEP at 

§ 423.38(c)(35) that differs from the 

effective date in the current quarterly 

dual/LIS SEP at § 423.38(c)(4). 

Establishing a different enrollment 

effective date could allow better 

alignment with Medicaid enrollment 

effective dates, for example, in 

situations where States are unable to 

enroll individuals on the first of the 

month following an enrollment request 

after a certain cut-off date and delay the 

effective date until the first of the 

following month. However, aligning 

with Medicaid enrollment effective 

dates may delay enrollment in 

integrated care plans and prevent dually 

eligible individuals from selecting an 

integrated D–SNP on a monthly basis. 

We welcome comments on utilizing 

these flexibilities to establish a different 

enrollment effective date for the 

proposed integrated care SEP. See 

section VIII.E. for further discussion of 

alignment of enrollment effective dates 

and a request for comments on this 

topic. 

We also welcome comments on the 

proposed changes to the dual SEP, the 

proposed integrated care SEP, and their 

combined impacts. 

2. Enrollment Limitations for NonIntegrated Medicare Advantage Plans 

Aligned enrollment is a key feature of 

the FAI, PACE, and other long-standing 

integrated care programs such as the 

Massachusetts’ Senior Care Options and 

Minnesota’s Senior Health Options that 

started as demonstration programs that 

were precursors to D–SNPs. Individual 

States may also use their State Medicaid 

agency contracts (SMAC) to limit 


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175See 42 CFR 438.2 for definitions of the terms 

managed care organization (MCO), prepaid 

ambulatory health plan, and prepaid inpatient 

health plan. 

176MedPAC Report to Congress, Promoting 

integration in dual-eligible special needs, table 12– 

6, page 436, June 2019. 

177The FY22 CMS Medicare-Medicaid 

Coordination Office Report to Congress indicates 

that as of July 2022, 1.75 million full-benefit dually 

eligible individuals were enrolled in managed care 

arrangements where the same organization covers 

both Medicare and Medicaid services. CMS utilized 

the underlying data to estimate that of the 1.75 

million, 1.26 million were enrolled in a D–SNP and 

affiliated Medicaid MCO offered by the same 

organization. The remaining half million were 

enrolled in Medicare-Medicaid plans, PACE, and 

managed fee-for-service arrangements. The FY22 

Medicare-Medicaid Coordination Office Report to 

Congress can be accessed here: https://

www.cms.gov/files/document/mmco-reportcongress.pdf-0. 

178 Velasquez, David E., E. John Orav, and Jose ́ F. 

Figueroa. Enrollment and characteristics of dualeligible Medicare and Medicaid beneficiaries in 

integrated care programs, Health Affairs 42, No. 5 

(2023), 685. 

179MedPAC Report to Congress, Promoting 

integration in dual-eligible special needs plans, 

Chapter 12, page 422, June 2019. Retrieved from 

https://www.medpac.gov/wp-content/uploads/ 

import_data/scrape_files/docs/default-source/ 

reports/jun19_ch12_medpac_reporttocongress_

sec.pdf. 

enrollment in a D–SNP to the enrollees 

in an affiliated Medicaid MCO. Further, 

we have adopted, as part of the 

definition in § 422.2, enrollment limits 

for FIDE SNPs that require, beginning 

January 1, 2025, FIDE SNPs to have 

exclusively aligned enrollment. 

Separate from contracting with D– 

SNPs via SMACs, States have discretion 

in how they arrange their Medicaid 

managed care programs and may use 

Medicaid MCOs to cover a 

comprehensive scope of Medicaid 

benefits or use prepaid health plans to 

cover a smaller scope of Medicaid 

benefits.175 Many States with Medicaid 

managed care programs select a limited 

number of Medicaid MCOs through a 

competitive procurement process. State 

approaches vary regarding eligibility for 

Medicaid MCOs that are part of the 

State’s managed care program (for 

example, whether plans cover just 

dually eligible enrollees or additional 

Medicaid populations), service areas, 

and carved-in benefits for dually eligible 

enrollees. While there may be some 

overlap in plan parent organizations 

operating both Medicaid MCOs and D– 

SNPs within a State, it is not always the 

case.176 Service areas are commonly 

misaligned between Medicaid MCOs 

and D–SNPs. States have the option to 

pursue EAE when it meets their own 

Medicaid managed care policy goals and 

objectives; however, placing 

responsibility solely on States to 

implement and facilitate EAE has often 

led to a complex market of D–SNPs, 

many of which only meet minimum 

integration requirements, as well as a 

complex set of Federal and State 

enrollment policies for States, plans, 

advocates, and beneficiaries to navigate. 

In many service areas, dually eligible 

individuals face complicated enrollment 

policies, overwhelming marketing, and 

an increasingly complex array of plans 

purportedly designed especially for 

them but that do not offer meaningful 

Medicare and Medicaid integration due 

to service area and enrollment 

misalignment. Enrollment in D–SNPs 

has increased rapidly and now exceeds 

five million. We estimate that 

approximately 1.26 million were in 

aligned enrollment as of July 2022, and 

this number has also grown over 

time.177 However, the majority of D– 

SNP enrollment remains in unaligned 

plans where the individual is either in 

a non-AIP coordination-only D–SNP or 

in one parent organization’s D–SNP and 

another parent organization’s Medicaid 

MCO, and the increases in enrollment in 

such plans has exceeded the increases 

in enrollment for integrated D–SNPs.178

Analysis by MedPAC in 2019 found that 

‘‘14 percent of [D–SNP] enrollees 

qualify for full Medicaid benefits and 

are in D–SNPs that have a companion 

managed long term services and 

supports (MLTSS) plan run by the same 

parent company, but they are not 

enrolled in that MLTSS plan.’’ As 

MedPAC noted, ‘‘some enrollees may 

not be required to enroll in an MLTSS 

plan, but for those who are, these cases 

of misaligned enrollment are unlikely to 

lead to any meaningful integration given 

the inherent challenges of coordinating 

the efforts of two separate managed care 

companies.’’ 179

While some States have utilized 

SMACs and selective contracting to 

limit the availability of D–SNPs in the 

State to those MA organizations that 

also have contracts with the State to 

cover Medicaid services, other D–SNP 

markets have grown without any 

limitations on non-integrated plans. In 

some markets, parent organizations of 

MA organizations have acquired 

multiple D–SNPs by purchasing smaller 

plans and have not consolidated the 

various plans, resulting in one parent 

organization operating multiple D–SNPs 

within a single State, often with 

overlapping service areas. For States 

that do not require parent organizations 

to consolidate their plans, multiple D– 

SNPs of this type may continue to 

operate indefinitely. This creates a 

market with a large number D–SNP 

options that often do not offer 

significantly different benefits or 

networks, which creates confusion for 

plan selection and could lead to 

individuals choosing unaligned 

Medicare and Medicaid plans. 

One State provides a useful (but not 

necessarily unique) example. In this 

State, for 2023, there are 47 D–SNP plan 

benefit packages (PBPs) offered through 

24 different plan contracts. A few parent 

organizations’ D–SNPs account for a 

large share of the plans in this State: 

UnitedHealth Group operates 15 D–SNP 

PBPs across six different MA contracts, 

Humana offers eight D–SNP PBPs across 

two MA contracts, and Centene offers 

five D–SNP PBPs across three MA 

contracts. A search of available options 

in Medicare Plan Finder (MPF) for a 

dually eligible individual in a zip code 

in this State yields 69 MA–PD options, 

including 19 D–SNPs. Of the 19 D– 

SNPs, five are offered by Centene, three 

are offered by Elevance, three are 

offered by UnitedHealth Group, and two 

are offered by Humana. The large 

number of D–SNPs operated by a 

relatively small group of parent 

organizations in this State illustrates the 

‘‘choice overload’’ faced by dually 

eligible individuals, their families, 

advocates, and enrollment counselors. 

Although Medicaid managed care in 

this State is mandatory for dually 

eligible individuals, and many of the 

same D–SNP parent organizations 

operate Medicaid MCOs in the State, 

there is currently no EAE required. 

Additionally, D–SNP and Medicaid 

MCO service areas are misaligned 

throughout the State, hindering 

meaningful integration and robust care 

coordination for enrollees despite a 

relatively small group of parent 

organizations. Further, the abundance of 

non-AIP coordination-only D–SNP 

options reduces the likelihood that a 

dually eligible individual would select 

a more integrated option. Additionally, 

numerous plan options in one service 

area increases the potential for 

marketing issues including agents and 

brokers targeting dually eligible 

individuals to switch into another plan. 

We recognize that States have policy 

interests and goals that shape their 

Medicaid managed care programs, and 

our intent is to help further support 

States interested in implementing EAE. 

We have historically deferred to States 

to use SMACs to align Medicare and 

Medicaid plan offerings consistent with 

State policy priorities. However, as the 

number of dually eligible individuals 

with misaligned enrollment and sheer 

number of D–SNPs have grown, we now 

believe that Federal rulemaking is 

warranted to promote greater alignment 

of D–SNPs and Medicaid MCOs and to 

begin to simplify the array of choices. 


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78572 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

We have authority, per section 

1857(e)(1) of the Act, to add MA 

contract terms and conditions not 

inconsistent with the MA statute (that is 

Part C of Title XVIII of the Act) as the 

Secretary may find necessary and 

appropriate. Given how section 

1859(f)(8) of the Act reflects a goal of 

furthering the integration of D–SNPs 

and how our proposal is designed to 

reduce choice overload situations for 

dually eligible individuals while 

furthering opportunities for enrollment 

in integrated D–SNPs (that is, FIDE 

SNPs, HIDE SNPs, and AIPs), we believe 

that the standard in section 1857(e)(1) is 

met. Further, section 1854(a)(5) of the 

Act is clear that we are not obligated to 

accept any and every MA plan bid. 

Based on these authorities, we are 

proposing new regulations (at 

§§ 422.503(b)(8), 422.504(a)(20), 

422.514(h), and 422.530(c)(4)(iii)) 

related to how MA organizations offer 

and enroll eligible individuals into D– 

SNPs. Proposed § 422.503(b)(8) would 

establish a new qualification for an MA 

organization (or new applicant to be an 

MA organization) to offer D–SNP(s) 

while proposed § 422.504(a)(20) would 

establish a new contract term for certain 

MA organizations; both are tied to the 

substantive limits we are proposing in 

§ 422.514(h). Proposed § 422.514(h) 

would establish conditions for how 

certain MA organizations and D–SNPs 

may enroll dually eligible individuals 

and limit the number of D–SNPs that 

may be offered by certain MA 

organizations. Finally, proposed 

§ 422.530(c)(4)(iii) would establish a 

new crosswalk to authorize MA 

organizations that are subject to these 

new enrollment limitations to crosswalk 

their enrollees to a single D–SNP to 

accomplish aligned enrollment. 

Together, our proposals at 

§§ 422.503(b)(8), 422.504(a)(20), and 

422.514(h)(1) and (2) would require the 

following: 

• Beginning in plan year 2027, when 

an MA organization, its parent 

organization, or an entity that shares a 

parent organization with the MA 

organization, also contracts with a State 

as a Medicaid MCO that enrolls dually 

eligible individuals in the same service 

area, D–SNPs offered by the MA 

organization, its parent organization, or 

an entity that shares a parent 

organization with the MA organization, 

must limit new enrollment to 

individuals enrolled in (or in the 

process of enrolling in) the D–SNP’s 

affiliated Medicaid MCO. This would 

apply when any part of the D–SNP 

service area(s) overlaps with any part of 

the Medicaid MCO service area, even if 

the two service areas do not perfectly 

align. Additionally, only one D–SNP 

may be offered by an MA organization, 

its parent organization, or another MA 

organization with the same parent 

organization in the same service area as 

the aligned Medicaid MCO. We would 

only enter into a contract with one D– 

SNP for full-benefit dually eligible 

individuals in the same service area as 

that MA organization’s affiliated 

Medicaid MCO (with limited exceptions 

as described below). 

• Beginning in 2030, such D–SNPs 

must only enroll (or continue to enroll) 

individuals enrolled in (or in the 

process of enrolling in) the affiliated 

Medicaid MCO. Therefore, by 2030, 

integrated D–SNPs would be required to 

disenroll individuals who are not 

enrolled in both the D–SNP and 

Medicaid MCO offered under the same 

parent organization (that is, offered by 

the parent organization or any 

subsidiary), except that D–SNPs would 

still be able to use a period of deemed 

continued eligibility to retain enrollees 

who temporarily lost Medicaid coverage 

as described in § 422.52(d). This also 

means that where an enrollee is 

temporarily disenrolled from the 

affiliated Medicaid MCO but is expected 

to be re-enrolled in the affiliated 

Medicaid MCO within the period of 

deemed continued eligibility, the D– 

SNP would not be required to disenroll 

that enrollee during that period. 

Consistent with how CMS believes 

MA organizations under the same 

parent organization share operational 

and administrative functions, we are 

proposing to apply the proposed 

regulations at the parent organization 

level. 

We are proposing a corresponding 

new provision at § 422.530(c)(4)(iii) that 

would provide a new crosswalk 

exception to allow one or more MA 

organizations that share a parent 

organization and offer D–SNPs subject 

to these proposed new limits to 

crosswalk enrollees (within the same 

parent organization and among 

consistent plan types) when the MA 

organization chooses to non-renew or 

consolidate its current D–SNPs to 

comply with the new rules in proposed 

§§ 422.504(a)(20) and 422.514(h). 

Currently, § 422.530(a)(2) does not allow 

enrollee crosswalks across different 

contracts or plan types. The proposed 

new crosswalk exception would 

explicitly permit moving enrollments 

across contracts held by MA 

organizations with the same parent 

organization; because we are not 

including any explicit exception from 

the rule in § 422.530(a)(2) prohibiting 

crosswalks to different plan types, the 

receiving D–SNP must be the same plan 

type as the D–SNP out of which the 

enrollees are crosswalked. We expect 

MA organizations who offer D–SNPs to 

leverage § 422.530(c)(4)(iii)—as well as 

standard MA processes to add or 

remove service areas—to come into 

compliance with § 422.514(h). 

We believe that allowing this 

crosswalk would limit enrollee 

disruption if MA organizations nonrenew D–SNPs to comply with our 

proposal. In addition, we believe this 

new crosswalk is consistent with 

preserving the evergreen nature of 

enrollee elections given the differences 

in the benefits being offered by the D– 

SNPs that are owned or controlled by 

the same parent organization are 

generally not meaningful beyond the 

scope of annual changes explained in 

the Annual Notice of Change. For 

example, in contract year 2023, there is 

one parent organization with three MA 

organizations that offer a total of 13 

HMO D–SNP benefit packages in one 

State. Only five of those D–SNPs enroll 

full-benefit dually eligible individuals, 

and the benefits offered in each of the 

D–SNPs are substantively similar. 

We are proposing the following 

exceptions to our proposals at 

§§ 422.504(a)(20) and 422.514(h)(1) and 

(2): 

• In certain circumstances, State D– 

SNP policy may require the need for 

more than one D–SNP for full-benefit 

dually eligible individuals to operate in 

the same service area. Under 

§ 422.514(h)(3)(i), we propose to permit 

an MA organization, its parent 

organization, or an entity that shares a 

parent organization with the MA 

organization, offering more than one D– 

SNP for full-benefit dually eligible 

individuals in the same service area as 

that MA organization’s affiliated 

Medicaid MCO only when a SMAC 

requires it. For example, where a SMAC 

limits enrollment for certain groups into 

certain D–SNPs (such as by age group), 

the MA organization may offer 

additional D–SNPs for different groups 

of full-benefit dually eligible 

individuals in the same service area 

accordingly. This exception allows for 

States that currently have different 

integrated D–SNP programs based on 

age or benefit design to continue to 

operate these programs and allows 

States the flexibility to design future 

integrated D–SNP programs with 

eligibility nuances should they so 

choose. This proposed exception would 

only be available where the SMAC 

requires different eligibility groups for 

the different D–SNPs that are offered by 

the same MA organization, its parent 

organization, or another MA 


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Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78573 

organization that shares the parent 

organization. 

• Numerous parent organizations 

operate both HMO and PPO D–SNPs in 

States where they also contract with a 

State as a Medicaid MCO, and the 

proposed regulation at §§ 422.504(a)(20) 

and 422.514(h)(1) and (2) would apply 

to both HMO and PPO D–SNPs. 

However, as noted above, 

§ 422.530(a)(2) does not allow enrollee 

crosswalks across different plan types, 

and we are not including any exception 

from that existing rule in the new 

crosswalk exception proposed at 

§ 422.530(c)(4)(iii). To minimize 

enrollee disruption, our proposal would 

not prohibit an MA organization, its 

parent organization, or another MA 

organization that shares a parent 

organization with the MA organization, 

from continuing to operate both an 

HMO D–SNP and a PPO D–SNP in a 

State where the proposed new policy 

applies. However, to achieve the goals 

of the new regulation, including 

simplification of the D–SNP market and 

promotion of integrated care through 

aligned Medicare and Medicaid 

products, we propose at 

§ 422.514(h)(3)(ii) that the MA 

organization, its parent organization, or 

another MA organization that shares a 

parent organization with the MA 

organization may offer (or continue to 

offer) both the HMO and PPO D–SNPs 

only if they no longer accept new fullbenefit dually eligible enrollees in the 

same service area as the D–SNP affected 

by the new regulations at 

§§ 422.504(a)(20) and 422.514(h). Under 

this proposal, the MA organization, its 

parent organization, and another MA 

organization that shares a parent 

organization with the MA organization 

may only accept new enrollment in one 

D–SNP for full-benefit dually eligible 

individuals in the same service area as 

an affiliated Medicaid MCO, and such 

new enrollment is limited to the fullbenefit dually eligible individuals who 

are enrolled (or are enrolling) in the 

affiliated Medicaid MCO. 

We also propose at § 422.503(b)(8) 

that in service areas in which a D–SNP 

limits enrollment to individuals 

enrolled in (or in the process of 

enrolling in) an affiliated Medicaid 

MCO, the MA organization, its parent 

organization, or entities that share a 

parent organization with the MA 

organization may not newly offer 

another D–SNP for full-benefit dually 

eligible individuals, if it would result in 

noncompliance with § 422.514(h). 

Additionally, we propose at 

§ 422.504(a)(20) to establish a new 

contract term for MA organizations that 

offer D–SNPs to require compliance 

with the enrollment limits we are 

proposing to add to § 422.514(h). These 

proposals would apply regardless of any 

EAE requirements in State SMACs, 

unless the exception to accommodate 

State policy choices, described in 

proposed § 422.514(h)(3)(i), applies. 

Table HC2 summarizes enrollment 

scenarios to illustrate the combined 

effects of our proposed SEP changes and 

enrollment limitations. The term ‘‘D– 

SNP’s parent organization’’ as used in 

the table includes the MA organization 

that offers the D–SNP, the MA 

organization’s parent organization, and 

any other entity (MA organization or 

otherwise) that shares the parent 

organization with the MA organization 

that offers the D–SNP. 

We look to a hypothetical example of 

how the proposed regulations would 

likely play out in the market. For this 

example, Parent Organization Alpha 

operates three MA organizations in 

Montgomery County. For the sake of 

this example, the service areas for all D– 

SNPs encompass Montgomery County, 

and each of the D–SNPs enrolls both 

full-benefit and partial-benefit dually 

eligible individuals of all ages. 


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TABLE HC2: 2027 SCENARIOS FOR D-SNP ENROLLMENT UNDER THE 

PROPOSED INTEGRATED CARE SEP AND PROPOSED ENROLLMENT 

LIMITATIONS-PLAN PERSPECTIVE 

D-SNP' s parent organization 

has an affiliated Medicaid 

MCO that enrolls full-benefit 

dually eligible individuals in 

same service area 

D-SNP' s parent organization 

does NOT have an affiliated 

Medicaid MCO that enrolls 

full-benefit dually eligible 

individuals in same service 

area 

Only enrollees in the parent 

organization's companion 

Medicaid MCO who also 

meet eligibility requirements 

based on terms of that State's 

SMAC 

Any individuals who meet 

eligibility requirements based 

on terms of that State's 

SMAC 

Each month 

Only during ICEP, AEP, 

MA-OEP, or via an existing 

SEP 
78574 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

We anticipate that under proposed 

§ 422.514(h), for periods beginning on or 

after January 1, 2027, Parent 

Organization Alpha would have to 

choose one of the three D–SNPs offered 

by its MA organization subsidiaries to 

align with the Plan Omega Medicaid 

MCO. For this example, MA 

Organization Omega chooses HIDE D– 

SNP Omega 001 to serve as the D–SNP 

aligned with Medicaid MCO Omega and 

permitted to continue under proposed 

§ 422.514(h). Under the proposed 

crosswalk authority at 

§ 422.530(c)(4)(iii), MA Organization 

Omega and MA Organization Gamma 

would be able to move enrollees from 

Gamma 001 into Omega 001 on January 

1, 2027. MA Organization Gamma could 

then convert HIDE D–SNP Gamma 001 

to coordination-only D–SNP Gamma 

001 and keep that plan open for partialbenefit dually eligible individuals, or 

elect to non-renew Gamma 001 and 

keep only Omega 001 as the plan 

aligned with the Omega Medicaid MCO 

into which full-benefit dually eligible 

individuals may enroll so long as they 

are also enrolled in the Omega Medicaid 

MCO. Further, under proposed 

§ 422.514(h)(3)(ii), MA Organization 

Omega could retain the HIDE PPO D– 

SNP, but it would be closed to new 

enrollment for full-benefit dually 

eligible individuals in Montgomery 

County. 

Our proposals on enrollment 

limitations for non-integrated D–SNPs 

would apply based on an MA 

organization having an affiliated 

Medicaid MCO. However, we are 

considering whether our proposals 

should apply where an MA organization 

has other affiliated Medicaid managed 

care plan options as well, including 

prepaid inpatient health plans (PIHPs) 

and prepaid ambulatory health plans 

(PAHPs). PIHPs and PAHPs are limited 

in what they cover and do not have 

comprehensive risk contracts. Some 

States use PIHPs or PAHPs to deliver 

specific categories of services, like 

behavioral health, or a single benefit, 

such as non-emergency medical 

transportation, using a single contractor. 

The revenue for a PIHP or PAHP is 

usually less than the revenue for an 

MCO. As such, to the extent our 

proposal incentivizes an organization to 

end its Medicaid managed care 

contracts to avoid our new contracting 

limitations, that incentive would be 

stronger for a PIHP or PAHP than an 

MCO. Therefore, we are concerned that 

applying our proposals to PIHPs and 

PAHPs could create incentives that are 

disruptive yet do not significantly 

further the goals of our proposals. We 

welcome comments on this issue. 

If we finalize our proposals, we would 

consider updates to the systems and 

supports designed to aid individuals in 


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TABLE HC3: HYPOTHETICAL EXAMPLE-D-SNP CURRENT LANDSCAPE 

Parent Organization Alpha 

MA Organization MA Organization Omega Medicaid MCO Gamma Omega (in 

HIDEHMOD- HIDE PPO D-SNP HIDE HMO D-SNP Omega 001 Montgomery 

SNP Gamma 001 Omega County) 

TABLE HC4: HYPOTHETICAL EXAMPLE - POSSIBLE D-SNP LANDSCAPE AFTER 

POTENTIAL ACTIONS BY PARENT ORGANIZATION* 

Parent Or2anization Alpha-under proposed rule 

MA Organization Omega 

HIDE HMO D-SNP Omega 001 * now 

aligned with Medicaid MCO Omega for Medicaid MCO HIDE PPO D-SNP full-benefit dually eligible individuals: Omega (in Omega* • 2027: new enrollment limited to individuals 

Now frozen to new enrolled in ( or in the process of enrolling in) Montgomery County) 

enrollment Medicaid MCO Omega 

• 2030: 100 percent of enrollment aligned with 

Medicaid MCO Omega; unaligned enrollees 

would be disenrolled 

*In Table HC4, MA orgamzation has non-renewed Gamma 001. 
Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78575 

180MMCO memo on 42 CFR 422.107(e) available 

here: https://www.cms.gov/files/document/ 

stateoppsintegratedcareprogs.pdf. 

making Medicare choices. This would 

include MPF, HPMS, and other 

resources that help to outline available 

plan choices to individuals, SHIP 

counselors, and others. This may be 

especially important where dually 

eligible individuals have choices that 

would vary based on the type of plan 

and time of year. We would consider the 

best ways to show only those plans 

available to individuals and highlight 

options that align with Medicaid 

enrollment. We welcome 

recommendations on how the choice 

architecture could best support the 

proposals or objectives described in this 

section. 

Overall, we believe our proposals at 

§§ 422.503(b)(8), 422.504(a)(20), 

422.514(h), and 422.530(c)(4)(iii) would: 

• Increase the percentage of D–SNP 

enrollees who are in aligned enrollment, 

and—over time—exclusively aligned 

enrollment (EAE), which would 

increase access to the comprehensive 

coordination of care, unified appeal 

processes across Medicare and 

Medicaid, continuation of Medicare 

services during an appeal, and 

integrated materials that come with 

enrollment in one or more of the various 

types of integrated D–SNPs. The impact 

would be concentrated in those States 

that have Medicaid managed care but do 

not have EAE requirements already. In 

such States, to comply with the 

proposals, MA organizations that have 

multiple D–SNP PBPs available to fullbenefit dually eligible individuals and 

that also offer (or have parent 

organizations that offer) Medicaid MCOs 

in the same service area would likely 

choose to consolidate their PBPs down 

to a single PBP for full-benefit dually 

eligible individuals that is aligned with 

their Medicaid MCO that fully or 

partially overlaps the D–SNPs service 

area. Such MA organizations could 

operate non-AIP coordination-only D– 

SNPs both for service areas where they 

do not serve beneficiaries on the 

Medicaid side and for partial-benefit 

dually eligible individuals. (We believe 

that consolidation is more likely due to 

the potential administrative burden of 

offering multiple D–SNPs for which 

enrollment is restricted.) 

• Reduce the number of D–SNP 

options overall, and thus reduce choice 

overload and market complexity where 

parent organizations offer multiple D– 

SNP options in the same or overlapping 

service areas. 

• Remove some incentives for agents 

and brokers to target dually eligible 

individuals (especially among employed 

or captive agents affiliated with plans 

that do not offer integrated D–SNPs), 

thus lessening the assistance needed 

from advocates and SHIP counselors to 

correct enrollment issues. 

• Simplify provider billing and lower 

the risk of inappropriate billing, as more 

enrollees would be in D–SNPs with 

aligned enrollment. 

• Promote integrated care and create 

more opportunities to provide truly 

integrated experience for beneficiaries 

by requiring plans to align enrollment 

(for example, D–SNPs can better 

coordinate care across Medicare and 

Medicaid when plans are aligned). 

• In 2030, increase the number of D– 

SNPs with EAE, and therefore increase 

the number of D–SNPs that would be 

AIPs that are required to use unified 

appeals and grievance procedures and 

continuation of Medicare benefits 

pending appeal. 

• Potentially lead to more States 

requiring D–SNP-only contracts (see 

§ 422.107(e)) after 2030, as aligned 

enrollment and service areas for D– 

SNPs with affiliated Medicaid MCOs 

would be Federally required, allowing 

States to receive the benefits of D–SNPonly contracts (like HPMS access for 

oversight and information sharing, 

greater transparency on Star Ratings 

specific to D–SNP enrollees in their 

State, increased transparency on health 

care spending, among other benefits).180

While there are many benefits to our 

proposals, we acknowledge there are 

certain challenges: 

• Our proposals would reduce the 

number of D–SNP options for Medicaid 

MCO enrollees in some States. In 

general, we share MedPAC’s assessment 

that cases of misaligned enrollment are 

unlikely to lead to any meaningful 

integration. However, it is plausible that 

some dually eligible individuals could 

benefit from the unique combinations of 

provider networks and supplemental 

benefits that could be possible only by 

enrolling in misaligned Medicare and 

Medicaid plans. 

• Making plan choices clear under 

our proposals to dually eligible 

individuals, SHIP counselors and others 

would require changes to MPF, HPMS, 

and other CMS public materials 

explaining Medicare coverage options. 

Systems changes often present unknown 

challenges and a learning curve for 

users while they become accustomed to 

new updates. 

• It also may seem that our proposal 

on limiting enrollment in D–SNPs 

offered by MA organizations with 

affiliated Medicaid MCOs, in isolation, 

would disadvantage parent 

organizations that choose to offer 

Medicaid MCOs as well as D–SNPs 

because such organizations would be 

limited in the number of D–SNP 

offerings and would be required to align 

their enrollment between D–SNP and 

MCO for full-benefit dually eligible 

individuals. However, our SEP 

proposals would have the opposite 

effect by permitting enrollment into 

integrated D–SNP options that cover 

both Medicare and Medicaid benefits 

using the new one-time-per month SEP. 

Therefore, we believe our proposals, in 

combination, would maintain a high 

level of competition and choice, even 

while imposing some new constraints. 

• MA organizations that operate both 

D–SNPs and Medicaid MCOs might 

elect to participate in fewer competitive 

Medicaid procurements (or exit 

Medicaid managed care in ‘‘any willing 

provider’’ States) to be exempted from 

the proposed restrictions on plan 

enrollment and number of plan 

offerings. This could adversely affect 

competition and the minimum choice 

requirements in § 438.52 for Medicaid 

managed care programs. However, our 

SEP proposals would have the opposite 

effect, since only integrated D–SNPs 

could benefit from the new integrated 

care SEP, and overall, we believe our 

proposals, in combination, maintain 

strong incentives for organizations to 

compete for Medicaid managed care 

contracts. 

• The enrollment and eligibility 

restrictions—without the offsetting 

proposed SEP changes—could 

incentivize sponsors to create D–SNP 

look-alikes or other types of MA plans 

to build enrollment of dually eligible 

individuals without being subject to the 

enrollment limits and integration 

requirements associated with D–SNPs 

(although we plan to mitigate this risk 

with proposed revisions to § 422.514(d) 

and (e) in section VIII.G of this proposed 

rule). Finally, beginning in 2030, our 

proposal would no longer allow some 

enrollees to stay in their current D– 

SNPs, causing some enrollee disruption 

where the D–SNPs were unable to 

completely align their D–SNP and 

Medicaid MCO populations. 

We welcome comments on our overall 

policy direction, specific proposals, and 

analysis of their likely effects. 

D. Comment Solicitation: Medicare Plan 

Finder and Information on Certain 

Integrated D–SNPs 

Medicare Plan Finder (MPF) is an 

online searchable tool located on the 

Medicare.gov website that allows 

individuals to compare options for 

enrolling in MA or Part D plans. 

Medicare beneficiaries can also enroll in 

a plan using MPF. Each year, we work 


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181The My Care My Choice website is available 

at: https://www.mycaremychoice.org/en. 

to improve its functionality by 

implementing enhancements to MPF. 

MPF users can find information on D– 

SNPs that also provide Medicaid 

benefits for dually eligible individuals. 

However, the extent to which MPF 

highlights those plans is currently 

limited. We are soliciting comment to 

inform our intent to improve MPF 

functionality in the future to make it 

easier for dually eligible MPF users to 

assess MA plans that cover their full 

array of Medicare and Medicaid 

benefits. 

One important consideration is how 

MPF displays benefits offered by MA 

and Part D plans. Currently, MPF only 

displays benefits that are included in 

the MA plan benefit package (PBP) (that 

is, Medicare Parts A and B benefits, Part 

D coverage, approved Medicare 

supplemental benefits, and Value Based 

Insurance Design (VBID)/Uniform 

Flexibility (UF)/Supplemental Benefits 

for Chronically Ill (SSBCI)). For most 

MPF users, this represents the totality of 

their coverage. 

However, for applicable integrated 

plans (AIPs), as defined at § 422.561, D– 

SNP enrollment is limited to those 

individuals who also receive Medicaid 

benefits through the D–SNP or affiliated 

Medicaid managed care organization 

(MCO) under the same parent 

organization. For these D–SNPs, the 

benefits listed in MPF accurately reflect 

those covered by Medicare but do not 

reflect all the benefits available to all 

enrollees in the D–SNP. 

For example, in most States, all dually 

eligible individuals who qualify to 

enroll in an AIP would have access to 

Medicaid-covered non-emergency 

medical transportation (NEMT). 

However, MPF currently only displays 

NEMT as a covered benefit for any MA 

plan if it is also covered as an MA 

supplemental benefit. As such, all other 

things equal, an MA plan that offers 

NEMT as an MA supplemental benefit 

appears in MPF to have more generous 

coverage than an AIP that does not 

cover NEMT as an MA supplemental 

benefit but does cover it under the 

affiliated Medicaid MCO contract. 

Information about only Medicare 

benefits covered by MA plans available 

to the individual, although accurate, 

may not provide as much information to 

dually eligible MPF users as would be 

beneficial, since the combination of 

available Medicare and Medicaid 

benefits available through some 

integrated D–SNPs may be greater than 

the Medicare benefits reflected in MPF. 

It may also create a perverse incentive 

for D–SNPs to offer certain types of 

supplemental benefits for Medicare 

marketing purposes even when the same 

services are already available to all 

enrollees in the plan through Medicaid. 

We believe there is an opportunity to 

better inform dually eligible MPF users. 

For AIPs, we are considering adding a 

limited number of specific Medicaidcovered benefits (for example, dental, 

NEMT, certain types of home and 

community-based services, or others) to 

MPF when those services are available 

to enrollees through the D–SNP or the 

affiliated Medicaid MCO. We would 

limit this functionality to AIPs, because 

in such plans all enrollees—by 

definition—receive Medicaid benefits 

through the AIP. 

We would not include in the MPF 

display any Medicaid benefits that are 

available but only through a separate 

carve-out. Consider, for example, a State 

in which NEMT is available to dually 

eligible individuals but through a 

Statewide vendor separate from the AIP. 

In this instance, displaying NEMT in 

MPF would accurately represent that all 

D–SNP enrollees have coverage for 

NEMT in Medicaid, but it would not 

accurately characterize the D–SNP’s role 

(or the role of the affiliated Medicaid 

MCO offered by D–SNP parent 

organization) in delivering the service. 

We continue to consider whether to 

indicate which services are Medicare 

supplemental benefits and which are 

Medicaid, weighing whether the 

additional information would be worth 

the added complexity. 

Displaying Medicaid benefits in MPF, 

even with the limitations described 

above, would present new operational 

challenges for CMS. We do not currently 

capture the necessary information for 

AIPs or other D–SNPs in a systematic 

manner to populate MPF with 

information about Medicaid benefits 

covered by D–SNPs. (Medicaid benefit 

information is included in State 

Medicaid agency contracts (SMACs) that 

D–SNPs submit annually to CMS, but 

the information is not standardized and 

can be inconsistent and difficult to 

retrieve. Also, the current timing of 

SMAC submissions by the first Monday 

in July may not allow CMS enough time 

to review the SMACs and make the 

Medicaid benefits information available 

to MPF for an early October release.) 

Another way to potentially capture the 

necessary information would be for us 

to provide a mechanism by which D– 

SNPs can report it to us annually. We 

solicit comment on the practicality and 

means for accomplishing this. Our 

experiences with integrated PBPs in the 

Medicare-Medicaid Financial 

Alignment Initiative would inform our 

implementation, but enhancements to 

MPF would require effort and some 

opportunity cost. Nonetheless, we 

believe we can better inform dually 

eligible MPF users about the benefits to 

which they are entitled and, in doing so, 

better integrate their experience across 

Medicare and Medicaid. With support 

from the Administration for Community 

Living and the National Council on 

Aging, the My Care My Choice website 

is currently available to showcase 

integrated care plan options (and more) 

for three States (California, Michigan, 

and Ohio).181 We are also interested in 

stakeholders submitting comments 

about any features from the My Care My 

Choice website that are particularly 

helpful for individuals in understanding 

and making plan choices. 

Such enhancements to MPF would 

not require rulemaking. We are 

soliciting comments on the concepts 

described above to inform our decision 

about whether and how to implement 

changes to MPF along these lines. 

E. Comment Solicitation: State 

Enrollment Vendors and Enrollment in 

Integrated D–SNPs 

We, along with our State partners, 

have worked to create integrated care 

options for dually eligible individuals. 

When individuals choose to enroll, we 

want the enrollment process to be easy 

to navigate. Unfortunately, there remain 

technical challenges that can impede 

the ease of enrollment in integrated D– 

SNPs, including misalignment of 

Medicare and Medicaid enrollment 

processes, start dates, and related 

operational challenges for States and 

plans, as well as potentially confusing 

non-integrated enrollee communication 

materials. 

In the FAI, CMS delegated eligibility 

and enrollment functions for MedicareMedicaid Plans (MMPs) to States by 

waiving regulations at 42 CFR part 422, 

subpart B, insofar as they were 

inconsistent with the passive 

enrollment process used for each 

demonstration and with limiting 

enrollment in MMPs to certain dually 

eligible individuals. Operationally, 

many States have leveraged their State 

Medicaid enrollment vendors to 

operationalize enrollment, eligibility, or 

both. Which functions FAI States have 

chosen to delegate to their enrollment 

vendors or keep in-house (for example, 

enrollment vendor call center, 

enrollment noticing, eligibility 

determinations and enrollment 

processing) vary depending on the State. 

Within the context of the FAI 

demonstrations, the use of a State 

enrollment vendor serves multiple 

purposes: 


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• Effectuating Medicare and Medicaid 

enrollment simultaneously to avoid 

misalignment between enrollment start 

and end dates, 

• Serving as an unbiased source of 

information about integrated managed 

care plans and coverage options, and 

• Reducing the risk of real or 

perceived conflicts of interest when 

plans initiate enrollment directly. 

Outside of the FAI, dually eligible 

individuals elect MA plans, including 

D–SNPs, by enrolling directly with the 

plan, or Third-Party Marketing 

Organizations, or via 1–800–Medicare 

and the Medicare Online Enrollment 

Center. This creates special challenges 

for D–SNPs that have exclusively 

aligned enrollment (EAE) with affiliated 

Medicaid MCOs because these D–SNPs 

then need to separately coordinate 

enrollment of the dually eligible 

individual into the D–SNP’s affiliated 

Medicaid MCO. Some States have 

expressed interest in leveraging State 

enrollment vendors, including 

enrollment brokers as described in 

section 1903(b)(4) of the Act, to 

effectuate EAE for integrated D–SNPs 

and their affiliated Medicaid MCOs. 

Based on this experience, we are 

assessing ways to: 

• Promote enrollment in integrated 

D–SNPs and reduce the likelihood of 

misaligned Medicare and Medicaid 

managed care enrollment for 

beneficiaries, 

• Work toward an integrated D–SNP 

enrollment process that is operationally 

practical for both CMS and States, 

• Create alignment—to the extent 

feasible—between Medicare and 

Medicaid managed care enrollment start 

and end dates, 

• Protect beneficiaries from abusive 

enrollment practices without creating 

barriers to enrollment into a plan of 

choice, and 

• Streamline beneficiary messaging 

and communication related to 

enrollment. 

1. Current Opportunity for Use of State 

Enrollment Vendors for Enrollment in 

Integrated D–SNPs 

States can utilize Medicaid 

enrollment vendors for enrollment in 

integrated D–SNPs through 

requirements in the SMAC required by 

§ 422.107. States may thus require D– 

SNPs to contract directly with the 

State’s enrollment vendor to verify D– 

SNP eligibility and effectuate D–SNP 

enrollment transactions. While these 

contracts could govern the respective 

obligations of the broker and the D– 

SNP, they would have to be uniform for 

all D–SNPs in the State, and in order to 

avoid a violation of section 1903(b)(4) of 

the Act and §§ 438.71(c)(2) and 438.810 

regarding a broker having a financial 

interest in a provider or managed care 

plan in the State, the State would have 

to compensate its enrollment broker for 

performing these functions. D–SNPs 

would be in the position to provide the 

necessary information and oversight of 

the enrollment mechanisms and 

activities. D–SNPs would still be subject 

to existing regulations at § 422.504(i), 

maintaining ultimate responsibility for 

adhering to and complying with all 

terms and conditions of their contract 

with CMS. 

States can implement, and require of 

D–SNPs, specific messaging directing 

dually eligible individuals to take 

enrollment actions via the State’s 

enrollment vendor only, similar to the 

noticing and messaging that applies in 

the FAI demonstrations. States could 

choose which functions to direct the D– 

SNPs to contract with the enrollment 

vendor for via the SMAC. States could 

also choose to direct the D–SNPs via the 

SMAC to not elect use of the Medicare 

Online Enrollment Center. 

States could require D–SNPs to 

transfer prospective enrollees to the 

State’s enrollment vendor for eligibility 

confirmation, as MMPs are required to 

do under the FAI demonstrations (for 

example, via warm transfer, in which 

the D–SNP staff transfers the 

prospective enrollee to the State’s 

enrollment vendor but passes on the 

relevant information about the 

prospective enrollee). The enrollment 

vendor or the D–SNP—depending upon 

the contractual arrangement—would 

then effectuate the enrollment or 

disenrollment for Medicare and 

Medicaid. States could also require 

plans to direct enrollees to their vendor 

for disenrollments. Currently, under 

FAI, MMPs cannot accept enrollment 

requests directly from an individual or 

process the request, but instead they 

must forward the request to the State or 

State’s enrollment vendor within two 

business days. 

Under an arrangement in which a 

State requires D–SNPs to contract with 

the State’s enrollment vendor, D–SNPs 

would retain the responsibility to 

oversee any functions delegated to the 

State’s enrollment vendor under 

§ 422.504 provisions that require MA 

plans to oversee first tier, downstream, 

and related entities. However, as noted 

earlier, financial arrangements would 

need to be structured to avoid violating 

the independence and conflict of 

interest limitations that apply to 

enrollment brokers under section 

1903(b)(4) of the Act and §§ 438.71(c) 

and 438.810. 

Requiring D–SNPs to contract with a 

State’s enrollment vendor for 

enrollment and eligibility functions 

could create a simpler, streamlined 

enrollment experience for dually 

eligible individuals and may reduce the 

risk of misaligned Medicare and 

Medicaid enrollment. As in the FAI 

demonstrations, the State’s enrollment 

vendor would need to implement 

Medicare managed care eligibility and 

enrollment policies, such as Medicare 

special enrollment periods and 

Comprehensive Addition and Recovery 

Act provisions. 

Finally, like the FAI demonstrations, 

States can prohibit D–SNPs, via SMACs, 

from using agents and brokers to 

perform the activities described in 

§§ 422.2274 and 423.2274. 

2. Medicaid Managed Care Enrollment 

Cut-Off Dates 

One challenge of applying FAI 

enrollment processes outside the 

demonstration context is alignment of 

Medicaid and Medicare managed care 

enrollment start and end dates. Sections 

1851(f)(2) and 1860D–1(b)(1)(B)(iv) of 

the Social Security Act, and regulations 

codified at §§ 422.68 and 423.40(c) 

respectively, generally require that 

Medicare enrollments become effective 

on the first day of the first calendar 

month following the date on which the 

election or change is made, although 

section 1851(f)(4) of the Act and 

§§ 422.68(d) and 423.40(c) allow CMS 

flexibility to determine the effective 

dates for enrollments that occur in the 

context of special enrollment periods. 

Medicaid managed care regulations at 

§ 438.54 do not specify the timelines or 

deadlines by which any enrollment 

must be effective. 

Some States have cut-off dates after 

which enrollment in a Medicaid 

managed care plan is not effectuated 

until the first calendar day of the next 

month after the following month. (For 

example, an application received on 

March 28 would be effective May 1 in 

some States.) If a dually eligible 

individual is trying to enroll in an 

integrated D–SNP at the end of a month 

in a State with a Medicaid managed care 

enrollment cut-off date, there could be 

a monthlong lag between their Medicare 

managed care effective date and 

Medicaid managed care effective date. 

The lag in start dates between Medicare 

and Medicaid services for an integrated 

D–SNP can be confusing to enrollees, 

operationally challenging for integrated 

plans, and difficult to describe in plan 

materials, particularly in instances 

where the D–SNP and Medicaid MCO 

are described as a single integrated 

organization. 


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182CMS amended § 422.514(d)(1) in the April 

2023 final rule, so the regulation text now refers to 

plan year 2024 and subsequent years; however, the 

regulation was in effect, with the reference to 2022 

and subsequent years, as described here. 

We are interested in learning more 

about reasons for implementing 

Medicaid managed care enrollment cutoff dates and the barriers, as well as 

potential solutions, to aligning Medicare 

and Medicaid managed care enrollment 

start and end dates. We invite comment 

from interested parties, including States, 

D–SNPs, and Medicaid managed care 

plans, about their specific operational 

challenges related to potential changes 

to Medicaid cut-off dates to align them 

with the Medicare start date. 

3. Comment Solicitation 

We are seeking feedback on the 

feasibility of the approach to enrollment 

outlined above (requiring integrated D– 

SNPs to contract with State enrollment 

brokers), as well as any specific 

concerns about States implementing it. 

We are soliciting comments on, but 

not limited to, the following topics: 

• What challenges do individuals face 

when trying to enroll in integrated D– 

SNPs? 

• What are States’ reasons for having 

a specific Medicaid managed care 

enrollment cut off date in place? 

• What type of operational or systems 

barriers do States and Medicaid 

managed care plans face to making 

changes to their Medicaid enrollment 

cut-off date to align with the Medicare 

managed care enrollment start date? 

• What potential concerns would 

stakeholders have about CMS using 

flexibilities at section 1860D– 

1(b)(1)(B)(iv) of the Act and § 423.40(c) 

to determine effective dates for 

Medicare enrollments that occur in the 

context of our proposed special 

enrollment period for integrated care? 

(For example, Medicare enrollment 

effective dates that align with Medicaid 

enrollment effective dates, even if they 

are not the first day of the first calendar 

month following the date on which the 

election or change is made.) 

• Are there operational or systems 

barriers for States and Medicaid 

managed care plans to align 

disenrollment dates with Medicare? 

• What concerns, if any, should we 

consider with States requiring D–SNPs 

to route enrollment through the State 

enrollment vendor via the SMAC? Are 

there any Federal regulations, other than 

or in addition to the limitations on 

enrollment brokers under section 

1903(b)(4) and §§ 438.71(c) and 438.810, 

that interested parties view as an 

impediment to this option? 

• What type of technical assistance 

related to effectuating MA plan and D– 

SNP enrollment and eligibility 

processes would be helpful to States? 

• What concerns should we consider 

about potential abusive enrollment 

practices? 

• What are States’ current 

requirements and policies related to 

agents and brokers? 

• Are there other aspects of the 

integrated enrollment and disenrollment 

processes in FAI that should apply to 

D–SNPs? 

F. Clarification of Restrictions on New 

Enrollment Into D–SNPs via State 

Medicaid Agency Contracts (SMACs) 

(§§ 422.52 and 422.60) 

To elect a specialized MA plan for 

special needs individuals as defined at 

§ 422.2 (special needs plans or SNPs), 

an individual must meet the eligibility 

requirements for the specific type of 

SNP in which the individual wishes to 

enroll. At § 422.52(b), we define the 

eligibility requirements for individuals 

to enroll in a SNP. These eligibility 

requirements indicate that an individual 

must meet the regulatory definition of a 

special needs individual at § 422.2, meet 

the eligibility requirements for the 

specific SNP they elect to enroll in, and 

be eligible to elect an MA plan under 

§ 422.50. For D–SNPs, we also require at 

§ 422.107(c)(2) that the categories and 

criteria for eligibility for dually eligible 

individuals to enroll in the SNP be 

included in the SMAC between the 

State and the D–SNP. D–SNPs must 

restrict enrollment eligibility categories 

or criteria consistent with the SMAC. 

Currently, numerous States add 

eligibility categories and criteria to their 

SMACs that restrict new D–SNP 

enrollment to prioritize and promote 

integrated care. For example, some 

States only allow D–SNPs to enroll fullbenefit dually eligible individuals. 

Other States only allow D–SNPs to 

enroll individuals who are also in an 

affiliated Medicaid managed care plan, 

creating exclusively aligned enrollment. 

State restrictions serve an important 

purpose in maximizing the number of 

dually eligible individuals who receive 

coordinated services through the same 

organization for both Medicare and 

Medicaid; minimizing disruption for 

enrollees currently served by existing 

D–SNPs; and allowing for the creation 

of D–SNP benefit packages that are 

tailored to certain subsets of dually 

eligible individuals. 

State limitation of D–SNP enrollment 

to certain populations has been a feature 

throughout the history of D–SNPs. 

Nonetheless, we believe we can further 

clarify our regulations. 

We propose to revise § 422.52(b)(2) to 

be explicit that to be eligible to elect a 

D–SNP, an individual must also meet 

any additional eligibility requirements 

established in the SMAC. We also 

propose to revise § 422.60(a)(1) and add 

§ 422.60(a)(3) to be more explicit that 

MA organizations may restrict 

enrollment in alignment with 

§ 422.52(b)(2). Neither proposal is 

intended to change our longstanding 

policy. We do not expect any new 

burden associated with these proposed 

changes because States are already 

including eligibility categories and 

criteria in their SMACs and we are 

reviewing those accordingly. 

G. Contracting Standards for Dual 

Eligible Special Needs Plan Look-Alikes 

(§ 422.514) 

In the final rule titled Medicare 

Program; Contract Year 2021 Policy and 

Technical Changes to the Medicare 

Advantage Program, Medicare 

Prescription Drug Benefit Program, and 

Medicare Cost Plan Program which 

appeared in the Federal Register on 

June 2, 2020 (85 FR 33796) (hereinafter 

referred to as the June 2020 final rule), 

CMS finalized the contracting 

limitations for D–SNP look-alikes at 

§ 422.514(d) and the associated 

authority and procedures for 

transitioning enrollees from a D–SNP 

look-alike at § 422.514(e). For plan year 

2022 182 and subsequent years, as 

provided in § 422.514(d)(1), CMS does 

not enter into a contract for a new nonSNP MA plan that projects, in its bid 

submitted under § 422.254, that 80 

percent or more of the plan’s total 

enrollment are enrollees entitled to 

medical assistance under a State plan 

under Title XIX. For plan year 2023 and 

subsequent years, as provided in 

§ 422.514(d)(2), CMS will not renew a 

contract with a non-SNP MA plan that 

has actual enrollment, as determined by 

CMS using the January enrollment of 

the current year, consisting of 80 

percent or more of enrollees who are 

entitled to medical assistance under a 

State plan under Title XIX, unless the 

MA plan has been active for less than 

1 year and has enrollment of 200 or 

fewer individuals at the time of such 

determination. 

We established these contract 

limitations to address the proliferation 

and growth of D–SNP look-alikes, which 

raised concerns related to effective 

implementation of requirements for D– 

SNPs established by section 1859 of the 

Act (including amendments made by 

the Medicare Improvements for Patients 

and Providers Act of 2008 (Pub. L. 110– 

275) and the Bipartisan Budget Act of 


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183See June 2019 MedPAC Report to Congress, 

Chapter 12 at http://www.medpac.gov/wp-content/ 

uploads/import_data/scrape_files/docs/defaultsource/reports/ 

jun19_ch12_medpac_reporttocongress_sec.pdf. 

2018 (Pub. L. 115–123)). We adopted the 

regulation to ensure full implementation 

of requirements for D–SNPs, such as 

contracts with State Medicaid agencies, 

a minimum integration of Medicare and 

Medicaid benefits, care coordination 

through health risk assessments (HRAs), 

and evidence-based models of care. In 

addition, we noted how limiting these 

D–SNP look-alikes would address 

beneficiary confusion stemming from 

potentially misleading marketing 

practices by brokers and agents that 

market D–SNP look-alikes to dually 

eligible individuals. For a more detailed 

discussion of D–SNP look-alikes and 

their impact on the implementation of 

D–SNP Medicare and Medicaid 

integration, we direct readers to the June 

2020 final rule (85 FR 33805 through 

33820) and the proposed rule titled 

Medicare and Medicaid Programs; 

Contract Year 2021 and 2022 Policy and 

Technical Changes to the Medicare 

Advantage Program, Medicare 

Prescription Drug Benefit Program, 

Medicaid Program, Medicare Cost Plan 

Program, and Programs of All-Inclusive 

Care for the Elderly (85 FR 9018 through 

9021) (also known as the February 2020 

proposed rule). 

In the April 2023 final rule, we 

finalized amendments to close 

unforeseen loopholes in the scope of the 

regulation adopted to prohibit D–SNP 

look-alikes. Specifically, we finalized 

language at § 422.514(g) to apply the 

prohibitions on contracting with D–SNP 

look-alikes to individual segments of an 

MA plan. We also finalized language at 

§ 422.514(d)(1) to apply the D–SNP 

look-alike contracting limitation to both 

new and existing (that is, renewing) MA 

plans that are not SNPs and submit bids 

with projected enrollment of 80 percent 

or more enrollees of the plan’s total 

enrollment that are dually eligible for 

Medicare and Medicaid. 

1. Reducing Threshold for Contract 

Limitation on D–SNP Look-Alikes 

Our contracting limitations at 

§ 422.514(d) mean that we do not 

contract with non-SNP MA plans that 

have enrollment consisting of 80 

percent or more of enrollees who are 

entitled to Medicaid. We set the 

threshold at 80 percent or higher based 

on a 2019 MedPAC analysis that 

showed the proportion of dually eligible 

individuals in most geographic areas 

did not exceed the 80-percent 

threshold; 183 at that time, no MA plan 

service area had more than 50 percent 

dually eligible beneficiaries, and 

therefore dually eligible enrollment of 

80 percent or greater would not be the 

result of any plan that had not intended 

to achieve high enrollment of dually 

eligible individuals (85 FR 33812). The 

80-percent threshold also captured 

almost three-quarters of the non-SNP 

MA plans with more than 50 percent 

dually eligible enrollees (85 FR 33812). 

As described in the June 2020 final rule, 

we also considered two other 

approaches: (1) setting the threshold at 

the higher of 50 percent dually eligible 

enrollment or the proportion of dually 

eligible MA-eligible individuals in the 

plan service area plus 15 percentage 

points; and (2) setting a lower threshold 

for dually eligible enrollment at a point 

between 50 and 80 percent (85 FR 

33807). In addition to 80 percent or 

higher being an indicator that the plan 

is designed to attract disproportionate 

dually eligible enrollment, we believed 

this threshold would be easier for MA 

organizations to determine 

prospectively and operationally easier 

for CMS to implement than a threshold 

that varied across each service area. 

A number of commenters on the 

February 2020 proposed rule 

recommended that we set a threshold 

lower than 80 percent. These 

commenters expressed concern that a 

threshold of 80 percent could be 

‘‘gamed’’ by MA organizations to keep 

enrollment of dually eligible individuals 

just under the ceiling. Some 

commenters recommended that CMS set 

the ceiling for dually eligible enrollment 

at 50 percent with a commenter citing 

MACPAC analysis showing faster 

growth in projected enrollment among 

MA plans with dual eligible enrollment 

greater than 50 percent than among 

those greater than 80 percent. Another 

commenter recommended a threshold of 

60 percent. 

In the June 2020 final rule, we 

responded that we believed the 80- 

percent threshold was reasonable 

because, based on the 2019 MedPAC 

analysis on 2017 data, it far exceeded 

the share of dually eligible individuals 

in any given MA plan service area—no 

MA plan service area had more than 50 

percent dually eligible beneficiaries— 

and, therefore, would not be the result 

for any plan that had not intended to 

achieve high dually eligible enrollment. 

We also stated that we would monitor 

for potential gaming after 

implementation of the final rule by 

reviewing plan enrollment data and 

consider future rulemaking as needed 

(85 FR 33812). 

In response to our proposals to close 

unforeseen D–SNP look-alike loopholes 

in the April 2023 final rule, some 

commenters again recommended we 

lower the threshold to less than 80 

percent (88 FR 22131). A few 

commenters recommended we lower the 

threshold below 80 percent without 

recommending a specific percentage, 

and other commenters recommended 

we lower the threshold to 50 percent. 

The commenters suggested that 

lowering the threshold further would 

promote integrated care and minimize 

beneficiary confusion. As one of these 

commenters, MACPAC noted that it 

‘‘remains concerned that while CMS’s 

focus on plans where 80 percent or 

more of all enrollees are dually eligible 

addresses the most egregious instances, 

there could still be a real risk of growth 

in non-SNP MA plans falling below the 

80-percent threshold and thus 

continuing to detract from Federal and 

State efforts to integrate care.’’ We 

analyzed the percentage of non-SNP MA 

plans’ dually eligible enrollment as a 

percentage of total enrollment from plan 

years 2017 through 2023. Our analysis 

shows that the number of non-SNP MA 

plans with high levels of dually eligible 

individuals has grown substantially. 

BILLING CODE 4120–01–P 


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78580 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

184CMS analysis of Integrated Data Repository 

(IDR) data for January of each respective year. 

Analysis conducted in April 2023, as shown in 

Table 1. 

185CMS data from the Contract Year 2021 and 

2023 Landscape Plan shows the total number of 

MA–PD plans in 2017 was 2,332 and the total 

number of MA–PD plans in 2023 is 4,875. 

BILLING CODE 4120–01–C 

The rate of growth from 2017 to 2023 

in the number of non-SNP MA plans 

with 50 to 60 percent (544 percent 

increase), 60 to 70 percent (900 percent), 

and 70 to 80 percent dually eligible 

individuals as a percent of total 

enrollment (1,400 percent) 184 exceeded 

the rate of enrollment growth for all 

MA–PD plans (109 percent) over the 

same period of time.185 The increased 

growth in non-SNP MA plans with 

dually eligible individuals between 50 

and 80 percent of total enrollment 

suggests to us that MA organizations are 


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TABLE 1: TOTAL NUMBER OF NON-SNPS BY DUALLY ELIGIBLE INDIVIDUALS 

AS PERCENT OF TOTAL ENROLLMENT AND YEAR 

Year Total Number of Total Number Total Number Total Number 

Non-SNPMA ofNon-SNP ofNon-SNP of Non-SNP MA 

Plans with 50-60% MA Plans with MA Plans with Plans with 50-

Dually Eligible 60-70% Dually 70-80% Dually 80% Dually 

Individuals Eligible Eligible Eligible 

Individuals Individuals Individuals 

2017 9 4 2 15 

2018 13 6 5 24 

2019 16 19 17 52 

2020 30 18 17 65 

2021 33 25 19 77 

2022 58 35 26 119 

2023 58 40 30 128 

Percent 544% 900% 1,400% 753% 

growth from 

2017 to 2023 

Source: CMS analysis of Integrated Data Repository (IDR) data for January of each respective year. Analysis 

conducted in April 2023. 

TABLE 2: TOTAL ENROLLMENT IN NON-SNPS BY PERCENT OF DUALLY 

ELIGIBLE INDIVIDUALS ENROLLED AND YEAR 

Year Total Enrollees Total Enrollees Total Enrollees in Total Enrollees 

in Non-SNP in N on-SNP MA Non-SNPMA in N on-SNP MA 

MA Plans with Plans with 60- Plans with 70- Plans with 50-

50-60% Dually 70% Dually 80% Dually 80% Dually 

Eligible Eligible Eligible Eligible 

Individuals Individuals Individuals Individuals 

2017 26,231 3,091 246 29,568 

2018 26,132 2,570 2,957 31,659 

2019 9,204 8,171 16,459 33,834 

2020 46,319 15,939 20,320 82,578 

2021 54,185 29,738 23,652 107,575 

2022 75,926 45,522 26,481 147,929 

2023 105,534 92,100 53,334 250,968 

Percent 302% 2,880% 21,580% 749% 

growth from 

2017 to 2023 

Source: CMS analysis of Integrated Data Repository (IDR) data for January of each respective year. Analysis 

conducted in April 2023. 
Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78581 

186Ma, Y., Austin F., Roberts, E., Johnston, K., 

Phelan, J., and Figueroa, J. ‘‘Rapid Enrollment 

Growth In ‘Look-Alike’ Dual-Eligible Special Needs 

Plans: A Threat To Integrated Care’’, Health Affairs 

(July 2023) 919–927. Retrieved from https://

www.healthaffairs.org/doi/epdf/10.1377/ 

hlthaff.2023.00103. 

187See June 2019 MedPAC Report to Congress, 

Chapter 12 at https://www.medpac.gov/wp-content/ 

uploads/import_data/scrape_files/docs/defaultsource/reports/jun19_ch12_medpac_

reporttocongress_sec.pdf. 

188CMS analysis of 2023 non-SNP MA plan data 

in the IDR. Analysis conducted in April 2023, as 

shown in Table 1. 

189 June 2019 MedPAC Report to Congress, 

Chapter 12, calculated from Table 12–9 at https:// 

www.medpac.gov/wp-content/uploads/import_

data/scrape_files/docs/default-source/reports/ 

jun19_ch12_medpac_reporttocongress_sec.pdf. 

190CMS analysis of 2023 non-SNP MA plan data 

in the IDR. Analysis conducted in April 2023, as 

shown in Table 1. 

offering plans for dually eligible 

individuals but circumventing rules for 

D–SNPs, including requirements from 

the Bipartisan Budget Act of 2018, and 

detracting from Federal and State efforts 

to better integrate Medicare and 

Medicaid benefits. This growth in 

enrollment in these non-SNP plans is 

likely also drawing enrollment from 

integrated care D–SNPs and similar 

integrated programs. Recent analysis 

found that almost one-third of dually 

eligible individuals newly enrolled in 

D–SNP look-alikes were previously 

enrolled in fully integrated dual eligible 

SNPs (FIDE SNPs), other D–SNPs, PACE 

plans, or MMPs.186

We also conducted analysis with 2023 

data mimicking MedPAC’s 2019 

analysis showing the share of dually 

eligible individuals enrolled in non-SNP 

MA plans against the share of 

beneficiaries in a plan service area who 

are dually eligible individuals.187

MedPAC’s analysis showed that in most 

MA markets, the share of beneficiaries 

in a plan service area who are dually 

eligible was clustered in the 10 to 25 

percent range and in no county 

exceeded 50 percent. Their analysis 

showed that dually eligible individuals 

generally represented 30 percent or less 

of non-SNP MA plans’ total enrollment. 

MedPAC’s analysis informed our 

decision to set the threshold for dually 

eligible enrollment at 80 percent of a 

non-SNP MA plan’s enrollment because 

it far exceeded the share of dually 

eligible individuals in any given market 

(by 30 percentage points or more) at that 

point in time and, therefore, would not 

be the result for any plan that had not 

intended to achieve high dually eligible 

enrollment. Similar to the earlier 

MedPAC analysis, our analysis of 2023 

data shows the share of beneficiaries in 

a plan service area who are dually 

eligible is clustered in the 10 to 30 

percent range and does not exceed 49 

percent except in one county (at 56 

percent).188 Also like MedPAC, we 

found that for most non-SNP MA plans, 

dually eligible individuals generally 

represent 30 percent or less of the plan’s 

total enrollment. However, whereas 

MedPAC found 13 non-SNP MA plans 

with dually eligible enrollment between 

50 percent and 80 percent for 2017,189

we found 128 non-SNP MA plans with 

enrollment in that range for 2023.190

To address the substantial growth in 

non-SNP MA plans with 

disproportionately high enrollment of 

dually eligible individuals, we propose 

lowering the D–SNP look-alike 

threshold from 80 percent to 60 percent 

incrementally over a two-year period. 

We propose to lower the threshold for 

dually eligible enrollment to 60 percent 

of a non-SNP MA plan’s enrollment 

because it exceeds the share of dually 

eligible individuals in any given MA 

plan service area currently and, 

therefore, would not be the result for 

any plan that simply reflected the 

concentration of dually eligible 

enrollees in its service area. 

We propose a limitation on non-SNP 

MA plans with 70 or greater percent 

dually eligible individuals for contract 

year 2025. For contract year 2026, we 

propose to reduce the threshold from 70 

percent to 60 percent or greater dually 

eligible enrollment as a share of total 

enrollment. This incremental approach 

would minimize disruptions to dually 

eligible individuals and allow MA 

organizations and CMS to operationalize 

these transitions over a two-year period. 

As discussed in more detail below, we 

would maintain processes to minimize 

disruption for the enrollees in plans 

affected by this proposed change. 

Based on 2023 data, we expect the 

lower threshold would impact 30 nonSNP MA plans with dually eligible 

individuals representing 70 to 80 

percent of total enrollment and 40 nonSNP MA plans with dually eligible 

individuals representing 60 to 70 

percent of total enrollment. Some of the 

plans that could be affected by our 

proposal are offered in States (that is, 

California, Massachusetts, Minnesota) 

that limit contracting to integrated D– 

SNPs, such as FIDE SNPs and AIPs. 

Based on 2023 plan data, 12 non-SNP 

MA plans in California, Massachusetts, 

and Minnesota have shares of dually 

eligible enrollment between 60 and 80 

percent. These States have chosen to 

limit their markets to certain D–SNPs to 

integrate Medicare and Medicaid for 

dually eligible individuals. Lowering 

the D–SNP look-alike contracting 

limitation to 60 percent will help to 

simplify choices for dually eligible 

individuals in these States and promote 

Medicare and Medicaid integration 

objectives. 

We propose revisions to the rule on 

dually eligible enrollment at 

§ 422.514(d)(1) to apply the lower 

thresholds to new and existing non-SNP 

MA plan bids. Specifically, we propose 

amending paragraph (d)(1)(ii) such that 

CMS would not enter into or renew a 

contract for a new or existing non-SNP 

MA plan that projects enrollment in its 

bid of 80 percent or more dually eligible 

individuals for plan year 2024 (as is 

already the case under current 

regulations); 70 percent or more dually 

eligible individuals for plan year 2025; 

and 60 percent or more dually eligible 

individuals for plan year 2026 and 

subsequent years. Consistent with our 

current practice, we would apply the 

proposed changes at § 422.514(d)(1)(ii) 

to all bids for the next plan year, 

including any bids for non-SNP MA 

plans projected to exceed the threshold 

even if the actual enrollment for the 

current plan year is under the threshold 

at § 422.514(d)(1). 

Similarly, we propose revisions to 

paragraph (d)(2) to apply the lower 

thresholds to non-SNP MA plan 

enrollment. Specifically, we propose to 

amend paragraph (d)(2)(ii) to state that 

we will not renew a contract with a nonSNP MA plan that has actual 

enrollment, using January enrollment of 

the current year, in which dually 

eligible individuals constitute 80 

percent or more dually eligible 

individuals for plan year 2024 (as is 

already the case under current 

regulations); 70 percent or more dually 

eligible individuals for plan year 2025; 

or 60 percent or more dually eligible 

individuals for plan year 2026 or 

subsequent years. In operationalizing 

these proposed changes, for example, 

we would use January 2024 enrollment 

data to identify non-SNP MA plans that 

exceed the proposed 70-percent 

threshold, for purposes of determining 

whether to renew contracts with these 

plans for plan year 2025. We would use 

January 2025 enrollment data to identify 

non-SNP MA plans that exceed the 

proposed 60-percent threshold for 

purposes of determining whether to 

renew contracts with these plans for 

plan year 2026. Consistent with existing 

rules, we would not apply the 

contracting limitation in § 422.514(d)(2) 

to any non-SNP MA plan that has been 

active for less than one year and has 

enrollment of 200 or fewer individuals. 

We considered lowering the threshold 

to 50 percent, given the growth in the 

number of non-SNP MA plans between 

50 and 60 percent dually eligible 


ddrumheller on DSK120RN23PROD with PROPOSALS2
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individuals as a share of total 

enrollment. MedPAC’s analysis of 2017 

data and our analysis of 2023 data 

showed that there are some service areas 

where the entire Medicare population is 

around 50 percent dually eligible 

individuals and 50 percent non-dually 

eligible individuals. As such, lowering 

the threshold to 50 percent could 

prohibit plans that reflect the 

distribution of eligibility in that 

community. Also, it is less clear that a 

plan is designed to target dually eligible 

individuals and circumvent the 

statutory D–SNP requirements when a 

plan appeals equally to dually eligible 

individuals and non-dually eligible 

individuals. Although we propose to 

lower the threshold to 60 percent, we 

solicit comments on whether the 

alternative to reduce the threshold to 50 

percent is more appropriate to protect 

against plans circumventing the 

requirements for D–SNPs while 

enrolling a disproportionate number of 

dually eligible individuals. 

2. Amending Transition Processes and 

Procedures for D–SNP Look-Alikes 

Section 422.514(e) establishes 

parameters for transitioning individuals 

who are enrolled in a D–SNP look-alike 

to another MA–PD plan (or plans) 

offered by the MA organization to 

minimize disruption as a result of the 

prohibition on contract renewal for 

existing D–SNP look-alikes. Under the 

existing processes and procedures, an 

MA organization with a non-SNP MA 

plan determined to meet the enrollment 

threshold in proposed paragraph (d)(2) 

could transition enrollees into another 

MA–PD plan (or plans) offered by the 

same MA organization, as long as any 

such MA–PD plan meets certain 

proposed criteria. This transition 

process allows MA enrollees to be 

transitioned at the end of the year from 

one MA plan offered by an MA 

organization to another MA–PD plan (or 

plans) without having to complete an 

election form or otherwise indicate their 

enrollment choice as typically required, 

but it also permits the enrollee to make 

an affirmative choice for another MA 

plan or standalone Part D plan of his or 

her choosing during the annual election 

period (AEP) preceding the year for 

which the transition is effective. 

Consistent with our description of the 

transition process in the June 2020 final 

rule (85 FR 33816), if a transitioned 

enrollee elects to enroll in a different 

plan during the AEP, enrollment in the 

plan the enrollee selected would take 

precedence over the plan into which the 

MA organization transitioned the 

enrollee. Transitioned enrollees would 

also have additional opportunities to 

select another plan through the 

Medicare Advantage Open Enrollment 

Period described in § 422.62(a)(3) from 

January 1 through March 31. Affected 

individuals may also qualify for a SEP, 

depending on the circumstances. 

Existing provisions at paragraphs 

(e)(1)(i) through (iv) outline specific 

criteria for any MA plan to receive 

enrollment through this transition 

process to ensure that enrollees receive 

coverage under their new MA plan that 

is similarly affordable as the plan that 

would not be permitted for the next 

year. At existing paragraph (e)(1)(i), we 

allow a non-renewing D–SNP look-alike 

to transition that plan’s enrollment to 

another non-SNP plan (or plans) only if 

the resulting total enrollment in each of 

the MA plans receiving enrollment 

consists of less than the threshold 

established in paragraph (d)(2)(ii) (now, 

80 percent but with the proposed 

amendment, this would refer to the 

scheduled change in the threshold). 

SNPs receiving transitioned enrollment 

are not subject to this proposed limit on 

dually eligible individual enrollment. 

Under existing paragraph (e)(1)(ii), we 

require that any plan receiving 

transitioned enrollment be an MA–PD 

plan as defined in § 422.2. Under 

existing paragraph (e)(1)(iii), any MA 

plan receiving transitioned enrollment 

from a D–SNP look-alike is required to 

have a combined Part C and D 

beneficiary premium of $0 after 

application of the premium subsidy for 

full subsidy eligible individuals 

described at § 423.780(a). Finally, 

paragraph (e)(1)(iv) requires that the 

receiving plan be of the same plan type 

(for example, HMO or PPO) of the D– 

SNP look-alike out of which enrollees 

are transitioned. 

At existing paragraph (e)(2)(ii), the 

current transition process requires MA 

organizations to describe changes to 

MA–PD benefits and provide 

information about the MA–PD plan into 

which the individual is enrolled in the 

Annual Notice of Change (ANOC) that 

the MA organization must send, 

consistent with §§ 422.111(a), (d), and 

(e) and 422.2267(e)(3). Consistent with 

§ 422.111(d)(2), enrollees receive this 

ANOC describing the change in plan 

enrollment and any differences in plan 

enrollment at least 15 days prior to the 

first day of the AEP. 

At existing paragraph (e)(4), the 

regulation addresses situations where 

the prohibition on contracting or 

renewing a D–SNP look alike is applied 

and the D–SNP look alike is terminated. 

In such situations where an MA 

organization does not transition some or 

all current enrollees from a D–SNP lookalike to one or more of the MA 

organization’s other plans as provided 

in proposed paragraph (e)(1), the MA 

organization is required to send affected 

enrollees a written notice consistent 

with the non-renewal notice 

requirements at § 422.506(a)(2). 

This transition process is 

conceptually similar to ‘‘crosswalk 

exception’’ procedures at § 422.530(c). 

However, in contrast to the crosswalk 

exceptions, our transition process at 

§ 422.514(e) permits transition across 

contracts and across MA organizations 

under the same parent organization, as 

well as from non-SNP plans to SNPs. 

We propose to apply the existing 

transition processes and procedures at 

§ 422.514(e) to non-SNP MA plans that 

meet the proposed D–SNP look-alike 

contracting limitation of 70 percent or 

more dually eligible individuals 

effective plan year 2025 and 60 percent 

or more dually eligible individuals 

effective plan year 2026. Consistent 

with the initial years of implementation 

of the D–SNP look-alike contract 

limitations with the 80-percent 

threshold, maintaining these transition 

processes and procedures will help to 

minimize disruption as a result of the 

prohibition on contract renewal for 

existing D–SNP look-alikes. However, 

for plan year 2027 and subsequent 

years, we propose to limit the 

§ 422.514(e) transition processes and 

procedures to D–SNP look-alikes 

transitioning dually eligible enrollees 

into D–SNPs. Based on our experience 

with D–SNP look-alike transitions 

effective plan year 2023, the vast 

majority of enrollees are transitioned to 

other MA–PDs under the same parent 

organization as the D–SNP look-alike. 

Based on our review of D–SNP lookalike transition plans thus far, we expect 

the experience for transitions effective 

plan year 2024 to follow a similar 

pattern. We propose this new limitation 

on the transition process at new 

paragraph (e)(1)(v). 

MA organizations can utilize other 

CMS processes to transition D–SNP 

look-alike enrollees to non-D–SNPs. For 

example, an MA organization can utilize 

the CMS crosswalk process if it is 

transitioning the full D–SNP look-alike 

enrollment to one non-SNP plan benefit 

package (PBP) of the same type offered 

by the same MA organization under the 

same contract provided all requirements 

at § 422.530 for a crosswalk are met. An 

MA organization moving the entire 

enrollment of the D–SNP look-alike PBP 

to another PBP of the same type under 

the same contract may structure this 

action as a consolidation of PBPs and 

use the crosswalk for consolidated 

renewal process, under 

§ 422.530(b)(1)(ii). An MA organization 


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191There are currently no D–SNP PFFS plans. 

MSA plans are prohibited from enrolling dually 

eligible individuals. HMO/POS plans have 

1,423,000 enrollees as of July 2023. 192 D–SNP PPO enrollment was at approximately 

668,000 as if May 2023. 

193The four sponsors are UnitedHealth Group (69 

percent of national D–SNP PPO enrollment), 

Humana (23 percent), Centene (4 percent), and 

Elevance (2 percent). 

may utilize the crosswalk exception 

process at § 422.530(c)(2) to request to 

transition the entire enrollment of the 

MA contract (including the D–SNP lookalike) to another MA contract offered by 

another MA organization with the same 

parent organization as part of a contract 

consolidation of separate MA contracts. 

As part of reviewing a request for a 

crosswalk exception under 

§ 422.530(c)(2), CMS reviews the 

contract consolidation to ensure 

compliance with the change of 

ownership regulations (§§ 422.550 

through 422.553). 

While multiple options exist for MA 

organizations to transition D–SNP lookalike enrollees to other non-SNP MA 

plans, these pathways are not available 

for moving enrollees from D–SNP lookalikes to D–SNPs. We believe it is 

appropriate to limit the transition 

process in § 422.514(e) since although 

other options remain available to 

transition enrollees from the D–SNP 

look-alike, MA organizations do not 

have other options to transition D–SNP 

look-alike enrollees into D–SNPs, and 

movement into D–SNPs encourages 

enrollment in integrated plans. 

Furthermore, we are concerned that if 

D–SNP look-alikes continue to be 

allowed to transition enrollees into nonD–SNPs indefinitely, there is little 

incentive for MA organizations to avoid 

non-compliance with the D–SNP lookalike thresholds. Thus, for plan year 

2027 and subsequent years, we propose 

to add new paragraph § 422.514(e)(1)(v) 

to limit the existing D–SNP look-alike 

transition pathway to MA organizations 

with D–SNP look-alikes transitioning 

enrollees into D–SNPs. 

We are also considering an alternative 

to our proposal that would eliminate the 

70-percent threshold applying for plan 

year 2025 but would involve additional 

conditions and changes related to the 

transition authority Specifically, this 

alternative would: 

• Apply the 60-percent threshold 

beginning in plan year 2026; 

• Permit use of the transition 

authority into non-SNP MA plans (as 

currently permitted under § 422.514(e)) 

for plan year 2025; and 

• Limit use of transition authority 

under § 422.514(e) to transition D–SNP 

look-alike enrollees into D–SNPs for 

plan year 2026 and beyond. 

Relative to our proposal, this 

alternative would give plans with dually 

eligible individual enrollment between 

70 and 80 percent of total enrollment 

(based on January 2024 enrollment data) 

one additional year to apply for a new 

D–SNP or service area expansion to an 

existing D–SNP, such that these plans 

could transition enrollees into a D–SNP 

for plan year 2026. The alternative 

would balance the additional year using 

the existing 80-percent enrollment 

threshold to identify prohibited D–SNP 

look-alikes with an earlier limitation on 

the § 422.514(e) transition authority to 

enrollees transitioning into non-SNPs. 

We solicit comment on whether this 

alternative is a better balance of the 

goals of our policy to prohibit 

circumvention of the requirements for 

D–SNPs and to encourage and 

incentivize enrollment in integrated 

care plans. Among the factors we would 

consider in adopting the alternative 

instead of our proposal is the extent to 

which plans with between 70 and 80 

percent dually eligible enrollment in 

plan year 2024 expect to be able to 

establish a D–SNP in the same service 

area as the D–SNP look-alike if given an 

additional year (that is, 2026) to 

transition enrollees. Based on 2023 plan 

year data, approximately two-thirds of 

the MA organizations with non-SNP MA 

plans with between 70 and 80 percent 

dually eligible individuals already have 

a D–SNP under the same MA 

organization with the vast majority of 

those D–SNPs having a service area that 

covers the same service area as the nonSNP MA plan. The other approximately 

one-third of the MA organizations with 

non-SNP MA plans with between 70 

and 80 percent dually eligible 

individuals do not have a D–SNP in the 

same service area in plan year 2023. If 

given an additional year, these MA 

organizations would have more time in 

which to establish D–SNPs in the same 

service areas as non-SNP MA plans and 

transition the enrollees into a D–SNP. 

We also propose a technical edit at 

§ 422.514(e)(1)(i) to make the term 

‘‘specialized MA plan for special needs 

individuals’’ lowercase, consistent with 

the definition of D–SNPs at § 422.2. 

H. For D–SNP PPOs, Limit Out-ofNetwork Cost Sharing (§ 422.100) 

MA organizations offer a range of 

health plan options including Medicare 

savings account (MSA) plans, private 

fee-for-service (PFFS) plans, preferred 

provider organizations (PPOs), health 

maintenance organizations (HMOs) and 

health maintenance organizations with 

point of services benefits (HMO/POS). 

(See § 422.4.) The most common health 

plan options are HMOs and PPOs. 

HMOs generally require enrollees to use 

network providers. PPOs have a 

network of providers but also pay for 

services delivered by providers not 

contracted with the MA organization as 

a network provider. PPOs can be 

attractive to Medicare beneficiaries who 

want a broader choice of providers than 

would be available through an HMO or 

who have a specific preferred provider, 

like a psychiatrist, who is not in 

network. MA organizations offer PPOs 

that are open to all Medicare 

beneficiaries as well as D–SNP PPOs 

that enroll only individuals dually 

eligible for Medicare and Medicaid.191

Enrollment in D–SNP PPOs has 

increased in recent years, rising to 

approximately 925,000 enrollees as of 

May 2023, accounting for about 17 

percent of total D–SNP enrollment. D– 

SNP PPO enrollment has increased by 

38 percent from May 2022 to May 

2023.192 Four national MA sponsors 

account for over 98 percent of D–SNP 

PPO enrollment.193

Like PPOs offered primarily to 

Medicare beneficiaries not entitled to 

Medicaid benefits, D–SNP PPOs 

generally have higher cost sharing for 

out-of-network services than for the 

same services obtained from network 

providers. For non-D–SNP PPOs, the 

higher out-of-network cost sharing is 

meant to incentivize use of in-network 

providers. In D–SNP PPOs, however, the 

large majority of enrollees are protected 

from being billed for covered Medicare 

services by Medicare providers, 

including out-of-network providers. 

Instead, when these enrollees access 

services, either State Medicaid agencies 

pay the cost sharing or, if State payment 

of cost sharing is limited by a Medicaid 

rate for the service that is lower than the 

amount the D–SNP paid the provider, 

the provider must forego receipt of the 

cost sharing amounts. 

Those cost sharing amounts for out-ofnetwork services in D–SNP PPOs are 

often significantly higher than the cost 

sharing for the same services under 

original Medicare. 

Our review of D–SNP PPO out-ofnetwork cost sharing shows that for 

some important services, the cost 

sharing applicable to out-of-network 

services far exceeds the Medicare FFS 

cost sharing for these Part A and B 

benefits. For example, as of 2023: 

• Primary care providers: 59 percent 

of D–SNP PPOs charge out-of-network 

coinsurance above 20 percent, with 

most ranging from 30 to 40 percent. 

• Part B prescription drugs: 53 

percent of D–SNP PPOs charge an outof-network coinsurance above 20 

percent, with most ranging from 30 to 

40 percent. 


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194For example, if the Medicare (or MA) rate for 

a service is $100, of which $20 is beneficiary 

coinsurance, and the Medicaid rate for the service 

is $90, the State would only pay $10. If the 

Medicaid rate is $80 or lower, the State would make 

no payment. This is often referred to as the ‘‘lesser 

of’’ policy. Under the ‘‘lesser of’’ policy, a State 

caps its payment of Medicare cost-sharing at the 

Medicaid rate for a particular service. 

195For more information on cost sharing 

protections applicable to dually eligible 

individuals, see: https://www.cms.gov/medicaremedicaid-coordination/medicare-and-medicaidcoordination/medicare-medicaid-coordinationoffice/qmb. 

• DME: 50 percent of D–SNP PPOs 

charge an out-of-network coinsurance 

above 20 percent, with most ranging 

from 30 to 50 percent. 

• Home health: 41 percent of D–SNP 

PPOs charge an out-of-network 

coinsurance for home health services 

(original Medicare has no coinsurance). 

Out-of-network coinsurance ranged 

from 20 percent to 40 percent. 

• Dialysis: Three percent of D–SNP 

PPOs charge an out-of-network 

coinsurance above 20 percent for 

dialysis. 

• Skilled Nursing Facility (SNF): 46 

percent of D–SNP PPOs charge between 

20 and 50 percent coinsurance for outof-network SNF stays, considerably 

more than Traditional Medicare, which 

charges nothing for the first 20 days of 

a stay and a per diem charge for days 

21–100. 

• Inpatient Hospital (Acute): 47 

percent of D–SNP PPOs charged 

between 20 and 50 percent for an 

inpatient stay at an out-of-network acute 

care hospital, which can be 

substantially more than the Part A 

deductible in Traditional Medicare. 

• Inpatient Hospital (Psychiatric): 46 

percent of D–SNP PPOs charge between 

20 and 50 percent coinsurance for outof-network inpatient psychiatric 

services, substantially greater than the 

inpatient deductible charged under 

Traditional Medicare. 

By contrast, cost sharing for innetwork services in these D–SNP PPOs 

largely tracks the cost sharing structure 

in Traditional Medicare. Seventy-nine 

percent charge a Part B deductible. 

Eighty-five percent charge 20 percent for 

professional services, like visits with 

primary care and specialist physicians, 

and 100 percent charge 20 percent 

coinsurance for Part B drugs and DME, 

consistent with Traditional Medicare. 

While this in-network benefit design is 

consistent with statutory and regulatory 

requirements for overall and servicespecific limits under § 422.100(f)(6) 

(which sets specific cost sharing limits 

for certain in-network services tied to 

the maximum out-of-pocket (MOOP) 

limit used by the plan) and (j) (which 

identifies services for which in-network 

cost sharing must not exceed cost 

sharing in Traditional Medicare) for innetwork benefits, it differs from non-D– 

SNP PPOs which generally provide 

greater reductions in in-network cost 

sharing (compared to Traditional 

Medicare cost sharing) as supplemental 

benefits. 

This higher cost sharing for out-ofnetwork services in D–SNP PPOs raises 

several concerns. 

First, when State Medicaid agencies 

pay the cost sharing for out-of-network 

services, these levels of cost sharing 

raise costs for State Medicaid programs. 

This is especially true for those few 

States that, by policy, pay the full 

Medicare cost sharing amounts for all 

Medicare services, rather than for 

specific services in the Medicaid 

benefit. 

Second, certain dually eligible 

enrollees, specifically full-benefit dually 

eligible enrollees who are not Qualified 

Medicare Beneficiaries (QMBs), are 

liable for cost sharing if they go out of 

network to providers not enrolled in 

Medicaid, as services from these 

providers are not covered by Medicaid 

unless the provider is enrolled in 

Medicaid. (QMBs, in contrast, have 

applicable Medicare cost-sharing 

amounts covered by Medicaid based on 

coverage of cost-sharing for Medicare 

covered services.) Non-QMB full-benefit 

dually eligible individuals are protected 

from cost sharing under 

§ 422.504(g)(1)(iii) if they use innetwork providers, including providers 

not enrolled in Medicaid. The 

regulation imposes obligations on MA 

organizations to ensure that their 

contracted—that is, in-network— 

providers do not collect cost sharing 

from enrollees when the State is 

responsible for paying such amounts. 

However, this protection does not 

extend to out-of-network providers not 

enrolled in Medicaid. 

Third, the higher out-of-network cost 

sharing disadvantages out-of-network 

safety net providers serving D–SNP PPO 

enrollees in States where limits 

established by Medicaid rates for the 

service result in no State payment of 

cost sharing.194 In such a scenario, the 

provider may receive 70 or 60 percent 

of the Traditional Medicare rate for the 

services rather than the 80 percent that 

the provider would receive under 

Traditional Medicare (or as an innetwork provider). We are concerned 

that this effective payment cut 

disincentivizes providers from serving 

dually eligible enrollees, which may 

compromise access to services for these 

enrollees. In addition, we are concerned 

that such disincentives undermine the 

promise of out-of-network access that is 

a key component of how D–SNP PPOs 

are marketed to potential enrollees. 

In addition to the potential impact on 

States, safety net providers and dually 

eligible individuals of this cost sharing 

structure, we believe such higher cost 

sharing for out-of-network services may 

result in situations that are inconsistent 

with the policy goals underlying section 

1852(a)(2) of the Act. Section 

1852(a)(2)(A) of the Act describes how 

MA organizations can satisfy the 

requirement to cover Traditional 

Medicare services (that is, Part A and B 

benefits, with limited exceptions) under 

section 1852(a)(1)(A) when covered 

services are furnished by non-contracted 

(that is, out-of-network) providers. This 

statute provides that the MA 

organization has satisfied its coverage 

obligation for out-of-network services if 

the plan provides payment in an 

amount ‘‘so that the sum of such 

payment and any cost sharing provided 

for under the plan is equal to at least the 

total dollar amount for payment for such 

items and services as would otherwise 

be authorized under parts A and B 

(including any balance billing permitted 

under such parts).’’ 

For a non-D–SNP PPO, in which the 

majority of plan enrollees must pay plan 

cost sharing, the total dollar amount for 

a service paid at the Medicare rate will 

equal the total dollar amount under 

parts A and B, even if the cost sharing 

exceeds the cost sharing under original 

Medicare. 

For a D–SNP PPO, however, the vast 

majority of plan enrollees are not liable 

for cost sharing for out-of-network 

services, just as they are not liable for 

such cost sharing under Traditional 

Medicare.195 Therefore, whenever State 

Medicaid limits on payment of 

Medicare cost sharing result in no 

payment of cost sharing or payment of 

only a portion of cost sharing, the total 

dollar amount of payment received by 

the out-of-network provider for these 

covered services is less than the 

provider would collect under 

Traditional Medicare whenever the plan 

out-of-network cost sharing exceeds the 

cost sharing for those services under 

Traditional Medicare. 

For example, a provider in a State that 

capped its cost sharing payments at a 

Medicaid primary care rate that is 70 

percent of the Medicare rate would 

receive just 70 percent of that Medicare 

rate when the provider is not in the 

PPO’s network and the PPO’s out-ofnetwork cost sharing is 30 percent or 

higher. That provider would receive 80 

percent of the Medicare rate under 


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196Only 14 States have Medicaid primary care 

rates that are greater than 80 percent of the 

Medicare rate. See: https://www.kff.org/medicaid/ 

state-indicator/medicaid-to-medicare-fee-index/

?currentTimeframe=0&sortModel=

%7B%22colId%22:%22Location%22,%22sort%22:

%22asc%22%7D. 

Traditional Medicare for the covered 

service. 

This lesser net out-of-network 

provider payment in a D–SNP PPO 

undermines the balance of obligations 

and benefits among MA organizations 

and Medicare providers that the statute 

creates to regulate out-of-network 

payments and beneficiary access for the 

MA program. While section 

1852(a)(2)(A) of the Act requires the 

total dollar amount to be at least as 

much as would be authorized under 

Traditional Medicare, Medicare 

providers are required by sections 

1852(k)(1) and 1866(a)(1)(O) of the Act 

to accept such amounts as payment in 

full. When a D–SNP PPO imposes cost 

sharing greater than Traditional 

Medicare and that cost sharing is 

unpaid by the State and uncollectable 

from the beneficiary, the MA 

organization has, in effect, failed to 

fulfill the spirit of its side of this 

statutory scheme and the providers are 

in effect forced to accept less than they 

would receive under original Medicare 

if they agree to treat the D–SNP PPO 

enrollee. 

In a D–SNP PPO, therefore, we are 

concerned that the combination of these 

issues results in a situation frustrating 

the underlying intent of section 

1852(a)(2)(A) of the Act because, for 

services furnished to many (if not all) 

enrollees in the D–SNP PPO, the out-ofnetwork provider potentially receives a 

total payment that is less than the total 

payment available under Traditional 

Medicare. To address these concerns, 

we are proposing new limits on out-ofnetwork cost sharing under D–SNP 

PPOs. We have authority under section 

1856(b)(1) of the Act to establish 

standards for MA organizations and MA 

plans to carry out the MA statute (that 

is, Part C of Title XVIII of the Act) in 

addition to authority, under section 

1857(e)(1) of the Act, to adopt 

additional terms and conditions for MA 

contracts that are not inconsistent with 

the Part C statute and that are necessary 

and appropriate for the MA program. 

Further, CMS is not obligated to accept 

any and every bid from an MA 

organization and is authorized to 

negotiate MA bids under section 

1854(a)(5)(C) and (a)(6)(B) of the Act. 

This proposal would establish 

minimum standards for D–SNP PPO 

plans that are consistent with and 

necessary and appropriate for the MA 

program to address our concerns. 

We propose at § 422.100(o)(1) that an 

MA organization offering a local PPO 

plan or regional PPO plan that is a dual 

eligible special needs plan (that is, a D– 

SNP) cap out-of-network cost sharing for 

professional services at the cost sharing 

limits for such services established at 

§ 422.100(f)(6) when such services are 

delivered in network starting in 2026. 

The term ‘‘professional services’’ as 

used here means the same thing as it 

does in existing § 422.100(f)(6)(iii) and 

includes primary care services, 

physician specialist services, partial 

hospitalization, and rehabilitation 

services. Under this proposal, a D–SNP 

PPO with a catastrophic limit set at the 

mandatory MOOP limit in 2026 and 

subsequent years must have cost sharing 

for a visit with an out-of-network 

psychiatrist or other specialist (that is, 

cost sharing subject to paragraph 

(f)(6)(iii)) that is capped at 30 percent 

coinsurance. If the catastrophic limit is 

set at the intermediate MOOP limit in 

2026 and subsequent years, the 

coinsurance cap would be set at 40 

percent. If the catastrophic limit is set 

at the lower MOOP limit in 2026 and 

subsequent years, the coinsurance cap 

would be 50 percent. Under our 

proposal, the rules in § 422.100(f)(6) and 

(j)(1) about how we assess that 

copayments that are actuarially 

equivalent to coinsurance would apply 

here as well. 

We propose to apply cost sharing 

limits on out-of-network professional 

services because this category of 

services includes the physician and 

psychiatry services most utilized out-ofnetwork in D–SNP PPOs. In addition, 

physician services are among the 

services for which Medicaid rates will 

most commonly either result in no 

payment of cost sharing due to limits on 

Medicaid rates or will increase State 

liability for cost sharing but still not 

result in total payment of at least 80 

percent of the Medicare rate.196

Our proposal at § 422.100(o)(1) also 

would require that cost sharing for outof-network acute and psychiatric 

inpatient services be limited by the cost 

sharing caps under § 422.100(f)(6) that 

now apply only to in-network benefits. 

Using the same methodology to 

calculate comparable FFS cost sharing 

in § 422.100(f)(6)(iv), the cost sharing 

limit for a D–SNP PPO with a 

catastrophic limit set at the mandatory 

MOOP limit could not exceed 100 

percent of estimated Medicare FFS cost 

sharing, including the projected Part A 

deductible and related Part B costs, for 

each length-of-stay scenario in an outof-network inpatient or psychiatric 

hospital. For catastrophic limits 

equivalent to the intermediate and 

lower MOOP amounts, higher cost 

sharing for out-of-network cost sharing 

for inpatient and psychiatric stays could 

be charged as described at 

§ 422.100(f)(6)(iv)(D)(2) and (3), 

respectively. 

We also propose at § 422.100(o)(2), by 

cross-referencing § 422.100(j)(1), that 

cost sharing for out-of-network services 

under D–SNP PPOs be limited to the 

existing cost sharing limits now 

applicable to specific in-network 

services for all MA plans: 

• Cost sharing for chemotherapy 

administration services, including 

chemotherapy/radiation drugs and 

radiation therapy integral to the 

treatment regimen, other Part B drugs, 

and renal dialysis services as defined at 

section 1881(b)(14)(B) of the Act, would 

be capped at the cost sharing applicable 

for those service under Traditional 

Medicare. 

• For skilled nursing care, defined as 

services provided during a covered stay 

in a skilled nursing facility (SNF) during 

the period for which cost sharing would 

apply under Traditional Medicare, cost 

sharing would be limited to the cost 

sharing amounts under Traditional 

Medicare when the MA plan establishes 

the mandatory MOOP catastrophic limit 

under § 422.101(d)(3). When the MA 

plan establishes the lower MOOP 

catastrophic limit, the cost sharing 

could not be greater than $20 per day for 

the first 20 days of a SNF stay. When the 

MA plan establishes the intermediate 

MOOP catastrophic limit, the cost 

sharing could not be greater than $10 

per day for the first 20 days of a SNF 

stay. 

• Regardless of the MOOP amount 

established by the MA plan, the per-day 

cost sharing for days 21 through 100 

could not be greater than one eighth of 

the projected (or actual) Part A 

deductible amount. 


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• For home health services (as 

defined in section 1861(m) of the Act), 

when the MA plan establishes a 

mandatory or intermediate MOOP type, 

cost sharing could not be greater than 

Traditional Medicare. When the MA 

plan establishes the lower MOOP 

catastrophic limit, the cost sharing 

could not be greater than 20 percent 

coinsurance or an actuarially equivalent 

copayment. 

• Cost sharing could not be greater 

than the applicable cost sharing under 

Traditional Medicare, when the MA 

plan establishes the mandatory MOOP 

catastrophic limit for the following 

specific service categories of durable 

medical equipment (DME): equipment, 

prosthetics, medical supplies, diabetes 

monitoring supplies, diabetic shoes or 

inserts. 

For regional PPO D–SNPs, we propose 

to exclude paragraph (j)(1)(C)(2) and the 

last sentence of paragraph (j)(1)(E) 

regarding overall actuarial equivalence 

requirements to avoid conflict with 

section 1852(a)(1)(B)(ii) of the Act. 

We propose applying out-of-network 

cost sharing limits to those services 

enumerated at § 422.100(f)(6) and (j)(1) 

because MA organizations and CMS 

have experience limiting cost sharing to 

Traditional Medicare for these 

categories of services when they are 

furnished in-network. In addition, this 

would establish alignment and 

consistency between the in-network and 

out-of-network cost sharing used by D– 

SNP PPOs for these services. We also 

note that section 1852(a)(1)(B)(iv) of the 

Act limits cost sharing for some of these 

services, including chemotherapy 

administration and dialysis, to cost 

sharing levels in Traditional Medicare, 

which CMS has implemented in 

§ 422.100(j) to apply to in-network 

benefits. As noted above, these services 

are among those services for which D– 

SNP PPOs most often impose cost 

sharing greater than Traditional 

Medicare. 

We are considering a requirement to 

limit all D–SNP PPO out-of-network 

cost sharing to no greater than 

Traditional Medicare, or using a limit 

specifically for physician services, 

including psychiatric and other mental 

health services, rather than using the 

cost sharing limits in § 422.100(f)(6). 

These are among the most commonly 

accessed services out-of-network in D– 

SNP PPOs, and these safety net 

providers are most likely to see reduced 

payment compared to their Traditional 

Medicare patients, which weighs in 

favor of requiring cost sharing to align 

with Traditional Medicare. Although we 

continue to consider these alternatives 

and request comment on them, we 

decided to propose application of the 

cost sharing limits that are applicable 

for in-network coverage for specific 

benefit categories, some of which are 

capped at Traditional Medicare cost 

sharing and some of which are higher. 

We propose to take this measured 

approach on the one hand to impose 

cost sharing limits on those services 

where the limits would have the most 

impact—those services most used outof-network in D–SNP PPOs and where 

the greater cost sharing has the most 

impact on provider payment and, for 

those dually eligible beneficiaries liable 

for cost sharing, ability to pay. We also 

believe this approach, at least initially, 

would mitigate any negative impact on 

MA organizations and D–SNP PPO 

enrollees as MA organizations redirect 

funds from other supplemental benefits 

to reduce cost sharing for these out-ofnetwork services. However, we seek 

comment on whether there are 

additional out-of-network services for 

which cost sharing should be limited to 

the levels applicable in Traditional 

Medicare. 

We considered proposing out-ofnetwork cost sharing limits for D–SNP 

PPOs only for services for which the 

Medicaid payment of cost sharing did 

not result in a total payment that was at 

least equivalent to the payment under 

Traditional Medicare. That approach 

would address our concern about how 

high out-of-network costs sharing by D– 

SNP PPOs appears to circumvent the 

goal of section 1852(a)(2)(A) of the Act 

that the out-of-network providers that 

furnish covered services to enrollees in 

MA plans receive the amount that the 

provider would have received under 

Traditional Medicare. However, such an 

approach would create an overly 

complex and likely unworkable system 

of cost sharing limits that differed both 

by State (depending on whether State 

policy limited cost sharing for specific 

services), by service, and—in some 

cases—by individual provider. For 

example, a State may pay the full 

Medicare cost sharing for Part B drugs 

administered by an oncologist but set 

the rate for administration of those 

drugs at 50 percent of the Medicare rate, 

resulting in no payment of cost sharing. 

That would result in two parts of a 

single services—payment for 

chemotherapy drugs and administration 

of such drugs—being subject to different 

cost sharing limits. The services subject 

to cost sharing limits could also change 

over time as States changed the rates at 

which they reimbursed for such 

services. 

We also considered proposing out-ofnetwork cost sharing limits only for 

services furnished out of network to 

QMBs because they are always 

protected from being billed cost sharing 

(see sections 1848(g)(3), 1866(a)(1)(A), 

1902(n), and 1905(p)(3) of the Act). 

However, this would not allow for the 

MA organization to apply its benefit 

uniformly to all its members, as 

required by 42 CFR 422.100(d)(2)(i), 

unless the SMAC limits enrollment in 

the D–SNP PPO to QMBs. In addition, 

managing cost sharing benefits in a nonuniform way could be administratively 

burdensome for both MA organizations 

and providers or difficult to clearly and 

accurately explain to enrollees in the 

member materials. 

Finally, we believe our proposed 

uniform application of out-of-network 

cost sharing limits for all PPO D–SNPs 

is the appropriate way to address our 

concerns about section 1852(a)(2)(A), 

the shifting of costs to States, the 

reduction in net payments to safety net 

providers, and the potential for 

excessive cost sharing for those dually 

eligible individuals, who, while low 

income, do not benefit from cost sharing 

protections out of network. 

To provide the industry time to adjust 

to and for CMS to operationalize these 

new requirements, we propose to 

implement these new limits starting for 

the 2026 plan year. 

Currently, D–SNP PPOs already 

submit out-of-network benefits for a 

limited review to ensure that cost 

sharing does not exceed 50 percent of 

the costs (as required by 

§ 422.100(f)(6)(i)) and in-network 

benefits for a review to ensure 

compliance with the cost sharing limits 

we propose to apply to out-of-network 

cost sharing. Therefore, we do not 

believe this proposed rule creates 

substantial information collection 

requirements. 

We do not expect any new burden to 

be associated with these proposed 

changes, as MA organizations are 

currently required to include 

information on MA cost sharing in their 

bids. Further, we do not expect any 

additional burden on CMS, as 

modifications to account for this 

proposed provision would be completed 

as part of normal business operations. 

IX. Updates to Program of All-Inclusive 

Care for the Elderly (PACE) Policy 

A. Corrective Action (§ 460.194) 

Sections 1894(e)(4) and 1934(e)(4) of 

the Act require CMS, in cooperation 

with the State administering agency 

(SAA), to conduct comprehensive 

reviews of PACE organizations’ 

compliance with all significant program 

requirements. Additionally, sections 

18941(e)(6)(A)(i) and 1934(e)(6)(A)(i) of 


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the Act condition the continuation of 

the PACE program agreement upon 

timely execution of a corrective action 

plan if the PACE provider fails to 

substantially comply with the program 

requirements as set forth in the Act and 

regulation. In the 1999 PACE interim 

final rule, we specified at § 460.194(a) 

and (c) that PACE organizations must 

take action to correct deficiencies 

identified by CMS or the SAA, or PACE 

organizations may be subject to sanction 

or termination (84 FR 66296). The 2019 

PACE final rule amended § 460.194(a) to 

expand the ways CMS or the SAA may 

identify deficiencies that the PACE 

organization must correct (84 FR 25677). 

These include ongoing monitoring, 

reviews, audits, or participant or 

caregiver complaints, and for any other 

instance in which CMS or SAA 

identifies programmatic deficiencies 

requiring correction (84 FR 25677). 

The 1999 PACE interim final rule also 

specified at § 460.194(b) that CMS or the 

SAA monitors the effectiveness of PACE 

organizations’ corrective actions. The 

burden on CMS and SAAs to always 

monitor the effectiveness of every 

corrective action taken by the 

organization after an audit is high, and 

the number of audits, and thus the 

number of instances in which 

monitoring is required, increases each 

year because the PACE program 

continues to rapidly grow, and CMS is 

required to conduct audits in each year 

of the three-year trial period for new 

PACE contracts. However, our 

experience overseeing this program has 

shown that it is not always necessary or 

worthwhile for CMS to monitor the 

effectiveness of every corrective action 

taken by an audited organization. For 

example, a PACE organization may 

implement a corrective action that 

impacts its unscheduled reassessments 

due to a change in participant status, 

but historically, these types of 

assessments are not conducted 

frequently, therefore, it may not be 

worthwhile for CMS or the states to 

spend resources monitoring the 

effectiveness of that correction due to 

limited data available for CMS or the 

SAA to monitor. Therefore, we propose 

to revise § 460.194(b) to specify that, at 

their discretion, CMS or the SAA may 

monitor the effectiveness of corrective 

actions. This proposal would give CMS 

and the SAA the flexibility to determine 

how to use their oversight resources 

most effectively, which will be 

increasingly important as PACE 

continues to grow. 

This proposal would not change our 

expectation that PACE organizations 

expeditiously and fully correct any 

identified deficiencies, and CMS and 

the SAAs would continue to engage in 

monitoring efforts that prioritize 

participant health and safety and 

program integrity. In addition, as a part 

of a PACE organization’s oversight 

compliance program, we require at 

§ 460.63 that PACE organizations adopt 

and implement effective oversight 

requirements, which include measures 

that prevent, detect and correct noncompliance with CMS’s program 

requirements. A PACE organization’s 

oversight compliance program must, at 

a minimum, include establishment and 

implementation of procedures and a 

system for promptly responding to 

compliance issues as they are raised. In 

addition, compliance oversight 

programs must ensure ongoing 

compliance with CMS requirements. 

Since the effect of the proposed 

change would be to provide CMS and 

the SAA more flexibility when 

monitoring the effectiveness of 

corrective actions without placing new 

requirements on CMS, the SAAs, or 

PACE organizations, we believe this 

change would create no additional 

burden for PACE organizations. 

Additionally, we do not expect this 

change to have economic impact on the 

Medicare Trust Fund. 

We solicit comment on this proposal. 

B. Service Determination Requests 

Pending Initial Plan of Care (§ 460.121) 

Sections 1894(b)(2)(B) and 

1934(b)(2)(B) of the Act specify that 

PACE organizations must have in effect 

written safeguards of the rights of 

enrolled participants, including 

procedures for grievances and appeals. 

Along with the regulations at § 460.120 

related to grievances, and § 460.122 

related to appeals, CMS created a 

process for service determination 

requests, the first stage of an appeal, at 

§ 460.121. 

The PACE regulations define a service 

determination request as a request to 

initiate a service; modify an existing 

service, including to increase, reduce, 

eliminate, or otherwise change a service; 

or to continue coverage of a service that 

the PACE organization is recommending 

be discontinued or reduced (see 

§ 460.121(b)(1)(i) through (iii)). In the 

January 2021 final rule (86 FR 6024), we 

finalized an exception to the definition 

of service determination request at 

§ 460.121(b)(2), which, as amended, 

provides that requests to initiate, 

modify, or continue a service do not 

constitute a service determination 

request if the request is made prior to 

completing the development of the 

initial plan of care. When we proposed 

this exception in the February 2020 

proposed rule, we noted that the 

exception would apply any time before 

the initial plan was finalized and 

discussions among the interdisciplinary 

team (IDT) ceased (85 FR 9125). We 

explained that we believed this change 

would benefit both participants and 

PACE organizations because it would 

allow the IDT and the participant and/ 

or caregiver ‘‘to continue to discuss the 

comprehensive plan of care taking into 

account all aspects of the participant’s 

condition as well as the participant’s 

wishes’’ (Id.). We also stated that ‘‘if a 

service was not incorporated into the 

plan of care in a way that satisfies the 

participant, the participant would 

always have the right to make a service 

determination request at that time’’ (85 

FR 9126). 

Our intention for this provision was 

that the IDT would discuss specific 

requests made by a participant and/or 

caregiver as part of the care planning 

process and determine whether these 

requests needed to be addressed in the 

plan of care. We stated in the February 

2020 proposed rule that if a participant 

asked for a specific number of home 

care hours, that the request would not 

need to be processed as a service 

determination request because the IDT 

was actively considering how many 

home care hours the participant should 

receive as part of the development of the 

initial plan of care (85 FR 9125). This 

rationale is also consistent with our 

statement in the proposed rule titled 

‘‘Medicare and Medicaid Programs; 

Programs of All-Inclusive Care for the 

Elderly (PACE),’’ which appeared in the 

August 16, 2016 Federal Register, that 

‘‘CMS expects the plan of care to reflect 

that the participant was assessed for all 

services even where a determination is 

made that certain services were 

unnecessary at that time’’ (81 FR 54684). 


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However, as part of our oversight and 

monitoring of PACE organizations, we 

have found that often requests made by 

participants and/or caregivers prior to 

the finalizing of the care plan are not 

discussed during the care planning 

process and are therefore not considered 

by the IDT. These requests are some of 

the first communications from 

participants related to the care they will 

be receiving from the PACE organization 

and would otherwise be considered 

service determination requests at any 

other stage of their enrollment. While 

we continue to believe that it is not 

prudent for the PACE organization to 

process these requests as service 

determination requests, it is important 

that the IDT consider these requests and 

determine whether they are necessary 

for the participant. 

Therefore, we propose to modify the 

regulation text at § 460.121(b)(2) to 

specify that service requests made prior 

to developing the participant’s initial 

plan of care must either be approved 

and incorporated into the participant’s 

initial plan of care, or the rationale for 

why it was not approved and 

incorporated must be documented. 

Specifically, we propose to add the add 

the following language at 

§ 460.121(b)(2). For all requests 

identified in this section, the 

interdisciplinary team must— 

• Document the request; and 

• Discuss the request during the care 

plan meeting and either— 

++ Approve the requested service and 

incorporate it into the participant’s 

initial plan of care; or 

++ Document their rationale for not 

approving the service in the initial plan 

of care. 

We believe this change is consistent 

with existing plan of care requirements 

at § 460.104(b) and aligns with our plan 

of care proposals in the December 2022 

proposed rule (87 FR 79452). 

As the development of the plan of 

care is a typical responsibility for the 

IDT, any burden associated with this 

would be incurred by persons in their 

normal course of business. Therefore, 

the burden associated with 

documenting the determination of any 

assessment of a participant and/or 

caregiver service request during the 

initial care planning process is exempt 

from the PRA in accordance with 5 CFR 

1320.3(b)(2). 

X. Collection of Information 

Requirements 

Under the Paperwork Reduction Act 

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

we are required to provide 60-day notice 

in the Federal Register and solicit 

public comment before a ‘‘collection of 

information,’’ as defined under 5 CFR 

1320.3(c) of the PRA’s implementing 

regulations, is submitted to the Office of 

Management and Budget (OMB) for 

review and approval. To fairly evaluate 

whether an information collection 

requirement should be approved by 

OMB, section 3506(c)(2)(A) of the PRA 

requires that we solicit comment on the 

following issues: 

• The need for the information 

collection and its usefulness in carrying 

out the proper functions of our agency. 

• The accuracy of our estimate of the 

information collection burden. 

• The quality, utility, and clarity of 

the information to be collected. 

• Recommendations to minimize the 

information collection burden on the 

affected public, including automated 

collection techniques. 

We are soliciting public comment (see 

section VII.D. of this preamble for 

further information) on each of these 

issues for the following sections of this 

document that contain information 

collection requirements. Comments, if 

received, will be responded to within 

the subsequent final rule. 

A. Wage Data 

1. Private Sector 

To derive mean costs, we are using 

data from the most current U.S. Bureau 

of Labor Statistics’ (BLS’s) National 

Occupational Employment and Wage 

Estimates for all salary estimates 

(https://www.bls.gov/oes/2022/may/ 

oes_nat.htm), which, at the time of 

publication of this proposed rule, 

provides May 2022 wages. In this 

regard, Table J1 presents BLS’ mean 

hourly wage, our estimated cost of 

fringe benefits and other indirect costs 

(calculated at 100 percent of salary), and 

our adjusted hourly wage. 

As indicated, except for Insurance 

Sales Agents, we are adjusting our 

employee hourly wage estimates by a 

factor of 100 percent. This is necessarily 

a rough adjustment, both because fringe 

benefits and other indirect costs vary 

significantly from employer to employer 

and because methods of estimating 

these costs vary widely from study to 

study. In this regard, we believe that 

doubling the hourly wage to estimate 

costs is a reasonably accurate estimation 

method. 

However, the mean wage for 

Insurance Sales Agent is being applied 


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TABLE Jl: NATIONAL OCCUPATIONAL EMPLOYMENT AND WAGE ESTIMATES 

Fringe 

Benefits 

and 

Other 

Indirect Adjusted 

Occupation Mean Hourly Costs Hourly 

Code Wa2e ($/hr) ($/hr) Wa2e ($/hr) 

Business ooerations soecialists (all others) 13-1199 39.75 39.75 79.50 

Compliance officers 13-1041 37.01 37.01 74.02 

Comouter oro=mmer 15-1251 49.42 49.42 98.84 

fusurance Sales Agent (Agent-Broker) 41-3021 37.00 n/a n/a 

Pharmacist 29-1051 62.22 62.22 124.44 

Pharmacy Technician 29-2052 19.35 19.35 38.70 

Phvsician all others 29-1229 114.76 114.76 229.52 

Software and Web Develooers. Pro=mmers Testers 15-1250 60.07 60.07 120.14 

Software Developers 15-1252 63.91 63.91 127.82 

Registered Nurse 24-1141 42.8 42.8 85.6 
Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78589 

to Agent-Brokers who work on behalf of 

Medicare Advantage plans. We are not 

adjusting their mean hourly wage for 

fringe benefits and other indirect costs 

because this proposed rule includes a 

proposal which accounts for payments 

for certain administrative activities 

while explicitly precluding others. 

These proposed payments would have 

their own annual update. 

2. Beneficiaries 

We believe that the cost for 

beneficiaries undertaking administrative 

and other tasks on their own time is a 

post-tax wage of $20.71/hr. The Valuing 

Time in U.S. Department of Health and 

Human Services Regulatory Impact 

Analyses: Conceptual Framework and 

Best Practices identifies the approach 

for valuing time when individuals 

undertake activities on their own time. 

To derive the costs for beneficiaries, a 

measurement of the usual weekly 

earnings of wage and salary workers of 

$998, divided by 40 hours to calculate 

an hourly pre-tax wage rate of $24.95/ 

hr. This rate is adjusted downwards by 

an estimate of the effective tax rate for 

median income households of about 17 

percent, resulting in the post-tax hourly 

wage rate of $20.71/hr. Unlike our 

private sector wage adjustments, we are 

not adjusting beneficiary wages for 

fringe benefits and other indirect costs 

since the individuals’ activities, if any, 

would occur outside the scope of their 

employment. 

For valuing time spent outside of 

work, there is logic to this approach but 

also to using a fully loaded wage. In the 

past we have used occupational code 

00–0000, the average of all occupational 

codes, which currently is $29.76/hr. 

Thus we propose a range for enrollees 

of $20.71/hr–$29.76/hr. Nevertheless, 

the upper limit is based on an average 

over all occupations while the lower 

limit reflects a detailed analysis by 

ASPE targeted at enrollees many of 

whom are over 65 and unemployed; 

consequently, in our primary estimates 

we will use the lower limit as we 

consider it more accurate. The effect of 

this range will be footnoted in Table J5 

and the summary table. Since the 

impact to beneficiaries is approximately 

$54,000, increasing the wage by 50 

percent would result in a roughly 

$24,000 increase. 

B. Proposed Information Collection 

Requirements (ICRs) 

The following ICRs are listed in the 

order of appearance within the 

preamble of this proposed rule. 

1. ICRs Regarding Network Adequacy in 

Behavioral Health (§ 422.116(b)(2) and 

(d)(2) and (5)) 

The following proposed changes will 

be submitted to OMB for review under 

control number 0938–1346 (CMS– 

10636). 

To ensure that MA enrollees have 

access to provider networks sufficient to 

provide covered services, including 

behavioral health service providers, we 

are proposing to add one new facilityspecialty type that will be subject to 

network adequacy evaluation under 

§ 422.116. As discussed in the 

‘‘Expanding Network Adequacy 

Requirements for Behavioral Health’’ 

section of the preamble, we are 

proposing to amend the network 

adequacy requirements to add one 

combined facility-specialty category 

called ‘‘Outpatient Behavioral Health’’ 

under § 422.116(b)(2) and to add 

‘‘Outpatient Behavioral Health’’ to the 

time and distance requirements in 

§ 422.116(d)(2). This new category can 

include, for network adequacy 

evaluation purposes, provider types 

including Marriage and Family 

Therapists (MFTs), Mental Health 

Counselors (MHCs), Opioid Treatment 

Program (OTP) providers Community 

Mental Health Centers or other 

behavioral health and addiction 

medicine specialists and facilities. 

Based on the current regulation at 

§ 422.116(e)(2) for all facility-specialty 

types other than acute inpatient 

hospitals, the minimum provider 

number requirement for this proposed 

new provider type is one. Finally, we 

also propose to add the new ‘‘Outpatient 

Behavioral Health’’ facility-specialty 

type to the list at § 422.116(d)(5) of the 

specialty types that will receive a 10- 

percentage point credit towards the 

percentage of beneficiaries that reside 

within published time and distance 

standards for certain providers when the 

plan includes one or more telehealth 

providers of that specialty type that 

provide additional telehealth benefits, 

as defined in § 422.135, in its contracted 

network. To determine the potential 

burden regarding this proposal, we 

considered cost estimates for MA 

organizations to update policies and 

procedures. However, the burden for 

updating the HPMS system is a burden 

to CMS and its contractors and hence 

not subject to COI review. 

Although there is a no cost for MA 

organizations to report new specialty 

types to CMS for their network 

adequacy reviews as this proposal 

requires, we have determined that there 

is a minimal one-time cost for MA 

organizations to update their policies 

and procedures associated with this 

proposal. 

First, regarding reporting the 

proposed new specialty types to CMS, 

MA organizations are already 

conducting ongoing work related to 

network adequacy reviews that happen 

during the initial or service area 

application, or every 3 years for the 

triennial review. This proposal would 

only require that the proposed specialty 

type be added to the Health Services 

Delivery (HSD) tables during any 

network adequacy evaluation requested 

by CMS. The time to conduct tasks 

related to adding additional specialty 

types on the HSD tables is negligible. 

We understand that MA organizations 

will need to update their policies and 

procedures related to submission of 

HSD tables to ensure that the new 

required behavioral health specialty 

type is included. We estimate that it 

would take 5 minutes (0.0833 hr) at 

$79.50/hr for a business operations 

specialist to update of policies and 

procedures related to this task. In 

aggregate we estimate a one-time burden 

of 62 hours (742 MA contracts * 0.0833 

hr) at a cost $4,929 (62 hr * $79.50/hr). 

2. ICRs Regarding Standards for 

Electronic Prescribing ((§ 423.160 and 

45 CFR 170.205 and 170.299) 

In section III.B. of this proposed rule, 

we propose updates to the standards to 

be used for electronic transmission of 

prescriptions and prescription-related 

information for Part D covered drugs for 

Part D eligible individuals. This 

includes: (1) after a transition period, 

requiring the National Council for 

Prescription Drug Plans (NDPDP) 

SCRIPT standard version 202301, 

proposed for adoption at 45 CFR 

170.205(b)(2), and retiring use of NCPDP 

SCRIPT standard version 2017071 for 

communication of a prescription or 

prescription-related information 

supported by Part D sponsors; (2) 

requiring use of NCPDP RTPB standard 

version 13 for prescriber RTBTs 

implemented by Part D sponsors 

beginning January 1, 2027; and (3) 

requiring use of NCPDP Formulary and 

Benefit (F&B) standard version 60, 

proposed for adoption at 45 CFR 

170.205(u), and retiring use of NCPDP 

F&B version 3.0 for transmitting 

formulary and benefit information 

between prescribers and Part D 

sponsors. These proposals update 

existing standards that have historically 

been exempt from the PRA, as explained 

in this section. 

The initial electronic prescribing 

standards for the Medicare Part D 

program were adopted in the final rule 

‘‘Medicare Program; Standards for EVerDate Sep<11>2014 20:26 Nov 14, 2023 Jkt 262001 PO 00000 Frm 00115 Fmt 4701 Sfmt 4702 E:\FR\FM\15NOP2.SGM 15NOP2

ddrumheller on DSK120RN23PROD with PROPOSALS2
78590 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

Prescribing Under Medicare Part D and 

Identification of Backward Compatible 

Version of Adopted Standard for EPrescribing and the Medicare 

Prescription Drug Program (Version 

8.1)’’ (Initial Standards final rule), 

which appeared in the April 4, 2008, 

Federal Register (73 FR 18917). The 

Initial Standards final rule implemented 

the first update to the electronic 

prescribing foundation standards in the 

Part D program that had been adopted 

in the final rule ‘‘Medicare Program; EPrescribing and the Prescription Drug 

Program’’ (Foundation Standards final 

rule), which appeared in the November 

7, 2005, Federal Register (70 FR 67567). 

The Initial Standards final rule adopted 

the updated the National Council for 

Prescription Drug Programs (NCPDP) 

SCRIPT standard version 8.1 and retired 

the previous NCPDP SCRIPT standard 

version 5.0. With respect to ICRs in the 

Initial Standards final rule, CMS stated 

that as a third-party disclosure 

requirement subject to the PRA, 

Medicare Part D sponsors must support 

and comply with the adopted eprescribing standards relating to 

covered Medicare Part D drugs, 

prescribed for Medicare Part D eligible 

individuals. However, the requirement 

that Medicare Part D sponsors support 

electronic prescription drug programs in 

accordance with standards set forth in 

this section, as established by the 

Secretary, does not require that 

prescriptions be written or transmitted 

electronically by prescribers or 

dispensers. These entities are required 

to comply with the adopted standards 

when they electronically transmit 

prescription or prescription-related 

information for covered transactions. 

Testimony presented to the [National 

Committee on Vital and Health 

Statistics] indicates that most health 

plans/[pharmacy benefit managers] 

currently have [electronic] prescribing 

capability either directly or through 

contract with another entity. Therefore, 

we do not believe that utilizing the 

adopted standards will impose an 

additional burden on Medicare Part D 

sponsors. Since the standards that have 

been adopted are already familiar to 

industry, we believe the requirement to 

utilize them in covered [electronic] 

prescribing transactions constitutes a 

usual and customary business practice. 

As such, the burden associated with the 

requirements is exempt from the PRA as 

stipulated under 5 CFR 1320.3(b)(2). 

Subsequent rules which have updated 

electronic prescribing standards in the 

Medicare Part D program have not 

included any burden estimates. 

Specifically— 

• The ‘‘Medicare Program; Revisions 

to Payment Policies Under the 

Physician Fee Schedule, DME Face-toFace Encounters, Elimination of the 

Requirement for Termination of NonRandom Prepayment Complex Medical 

Review and Other Revisions to Part B 

for CY 2013’’ final rule, which appeared 

in the November 16, 2012, Federal 

Register (77 FR 68891). This final rule 

updated the electronic prescribing 

standards in Medicare Part D from 

NCPDP SCRIPT standard version 8.1 to 

version 10.6; 

• The ‘‘Medicare Program; Revisions 

to Payment Policies Under the 

Physician Fee Schedule, Clinical 

Laboratory Fee Schedule & Other 

Revisions to Part B for CY 2014’’ final 

rule, which appeared in the Federal 

Register December 10, 2013 (78 FR 

74229). This final rule updated the 

electronic prescribing standards in 

Medicare Part D from NCPDP Formulary 

and Benefit (F&B) standard version 1.0 

to 3.0; and 

• The ‘‘Medicare Program; Contract 

Year 2019 Policy and Technical 

Changes to the Medicare Advantage, 

Medicare Cost Plan, Medicare Fee-forService, the Medicare Prescription Drug 

Benefit Programs, and the PACE 

Program’’ final rule, which appeared in 

the Federal Register April 16, 2018 (83 

FR 16640). This final rule updated the 

electronic prescribing standards in 

Medicare Part D from NCPDP SCRIPT 

standard version 10.6 to 2017071. 

Rationale that further supports CMS’s 

longstanding approach to not estimate 

burden associated with updating 

electronic prescribing standards is 

described in the proposed rule 

‘‘Medicare Program; Contract Year 2019 

Policy and Technical Changes to the 

Medicare Advantage, Medicare Cost 

Plan, Medicare Fee-for-Service, the 

Medicare Prescription Drug Benefit 

Programs, and the PACE Program’’ 

(November 2017 proposed rule), which 

appeared in the November 28, 2017, 

Federal Register (82 FR 56336). When 

describing the proposed update of the 

NCPDP SCRIPT standard from version 

10.6 to 2017071 in the November 2017 

proposed rule, CMS stated that we 

believe that transitioning to the new 

2017071 versions of the transactions 

already covered by the current Part D 

[electronic] prescribing standard 

(version 10.6 of the NCPDP SCRIPT) 

will impose de minimis cost on the 

industry as the burden in using the 

updated standards is anticipated to be 

the same as using the old standards for 

the transactions currently covered by 

the program. We believe that prescribers 

and dispensers that are now prescribing 

[electronically] largely invested in the 

hardware, software, and connectivity 

necessary to prescribe [electronically]. 

We do not anticipate that the retirement 

of NCPDP SCRIPT 10.6 in favor of 

NCPDP SCRIPT 2017071 will result in 

significant costs. 

Similarly, Part D sponsors have been 

required support real-time benefit tools 

(RTBTs) since January 1, 2021, as 

finalized in the ‘‘Modernizing Part D 

and Medicare Advantage to Lower Drug 

Prices and Reduce Out-of-Pocket 

Expenses’’ final rule, which appeared in 

the Federal Register May 23, 2019 (84 

FR 23832). Because Part D sponsors 

have invested in the hardware, software, 

and connectivity necessary to utilize 

RTBTs, we believe that adopting the 

NCPDP Real-Time Prescription Benefit 

(RTPB) standard version 13 will impose 

de minimis cost on the industry and 

that costs will be largely offset by the 

advantages and efficiencies associated 

with interoperability that a standard 

brings. 

The operations associated with 

updates to standards that we propose in 

this proposed rule are analogous to the 

operations associated with updates to 

standards in the prior rules described. 

Therefore, the proposals in section III.B. 

of this proposed rule are exempt from 

the PRA. 

3. ICRs Regarding to Improvements to 

Drug Management Programs (§§ 423.100 

and 423.153) 

The following proposed changes will 

be submitted to OMB for review under 

control number 0938–TBD (CMS– 

10874). At this time, the OMB control 

number has not been determined, but it 

will be assigned by OMB upon their 

clearance of our proposed collection of 

information request. We intend to 

identify the new control number in the 

subsequent final rule. The control 

number’s expiration date will be issued 

by OMB upon their approval of our final 

rule’s collection of information request. 

When ready, the expiration date can be 

found on reginfo.gov. 

Ordinarily, the proposed changes 

would be submitted to OMB for review 

under control number 0938–0964 

(CMS–10141), where the current OMBapproved Part D drug management 

program (DMP) information collection 

and burden is located. However, based 

on internal review, we are removing the 

DMP information collection and related 

burden from CMS–10141 and 

submitting it under a new collection of 

information request (OMB 0938–TBD, 

CMS–10874). This change will 

streamline clearance processes and 

minimize duplicative administrative 

burden for CMS and other stakeholders. 

Although we are proposing to remove 


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Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78591 

DMP burden from CMS–10141, that 

collection will continue to include 

burden associated with many other 

aspects of the Part D program. 

As described in section III.E. of this 

proposed rule, we propose to amend 

regulations regarding Part D DMPs for 

beneficiaries at risk of abuse or misuse 

of frequently abused drugs (FADs). 

Specifically, we propose to amend the 

definition of ‘‘exempted beneficiary’’ at 

§ 423.100 by replacing the reference to 

‘‘active cancer-related pain’’ with 

‘‘cancer-related pain.’’ This proposed 

change would reduce the overall burden 

associated with sponsors providing 

DMP case management and notices to 

potentially at-risk beneficiaries (PARBs) 

and at-risk beneficiaries (ARBs) because 

some beneficiaries identified as PARBs 

under the current definition would be 

excluded under the amended definition. 

Under § 423.153(a), all Part D plan 

sponsors must have a DMP to address 

overutilization of FADs for enrollees in 

their prescription drug benefit plans. 

Based on 2023 data, there are 319 Part 

D parent organizations. The provisions 

codified at § 423.153(f)(2) require that 

Part D sponsors conduct case 

management of beneficiaries identified 

by the minimum overutilization 

monitoring system (OMS) criteria 

through contact with their prescribers to 

determine if a beneficiary is at-risk for 

abuse or misuse of opioids and/or 

benzodiazepines. Case management 

must include informing the 

beneficiary’s prescriber(s) of the 

beneficiary’s potential risk for misuse or 

abuse of FADs and requesting 

information from the prescribers 

relevant to evaluating the beneficiary’s 

risk, including whether they meet the 

regulatory definition of exempted 

beneficiary. Under current CMS 

regulations at § 423.100, if a beneficiary 

meets the definition of an exempted 

beneficiary, the beneficiary does not 

meet the definition of a PARB. For this 

reason, exempted beneficiaries cannot 

be placed in a Part D sponsor’s DMP. 

In 2022, the OMS identified 43,915 

PARBs meeting the minimum criteria 

prior to applying exclusions and 30,411 

after excluding exempted beneficiaries. 

Thus, 13,504 beneficiaries (43,915 ¥ 

30,411) met the definition of exempted 

beneficiary. Amending the definition of 

‘‘exempted beneficiary’’ at § 423.100 by 

replacing the reference to ‘‘active 

cancer-related pain’’ with ‘‘cancerrelated pain’’ would result in 46 

additional enrollees meeting the 

definition of exempted beneficiary, or 

13,550 exempted beneficiaries total 

(13,504 + 46). This yields 30,365 (43,915 

¥ 13,550) instead of 30,411 

beneficiaries requiring case management 

under the amended definition. 

We estimate it takes an average of 5 

hours for a sponsor to conduct case 

management for a PARB. We assume 

certain components of case management 

can be completed by staff of differing 

specialization and credentialing. Of the 

5 hours, we assume that 2 hours at 

$124.44/hr would be conducted by a 

pharmacist (such as initial review of 

medication profiles, utilization, etc.), 2 

hours at $38.70/hr would be conducted 

by a pharmacy technician, and 1 hour 

at $229.52/hr would be conducted by a 

physician to work directly with 

prescribers on discussing available 

options and determining the best course 

of action. The case management team 

would require 5 hours at a cost of 

$555.80 per PARB case managed ([2 hr 

× $124.44/hr] + [2 hr * $38.70/hr] + [1 

hr * $229.52/hr]). Therefore, the case 

management team’s average hourly 

wage is $111.16/hr ($555.80/5 hr). In 

aggregate, we estimate annual burden 

with the proposed changes for case 

management is 151,825 hours (30,365 

enrollees subject to case management * 

5 hr/response) at a cost of $16,876,867 

(30,365 enrollees * (5 hr * $111.16/hr); 

see case management row in Table J3. 

CMS 10141 included an estimate for the 

current case management burden of 

178,855 hours and, with the hourly 

wage updated, a cost of $19,881,522; see 

case management row in Table J2. Thus, 

we calculate a savings of 27,033 hours 

(178,855 ¥ 151,825) and $3,004,655 

($19,955,671 ¥ $16,876,867) with this 

current proposed burden; see case 

management row in Table J4 and note 

that in Table J4 we list savings as a 

negative number. 

As a result of case management, a 

portion of PARBs may receive notice 

from a plan sponsor, informing the 

beneficiary of the sponsor’s intention to 

limit their access to coverage of opioids 

and/or benzodiazepines. Approximately 

5 percent of PARBs identified by OMS 

criteria receive an initial and either a 

second notice or an alternate second 

notice. Amending the definition of 

‘‘exempted beneficiary’’ would reduce 

the number of notices sent. Therefore, it 

follows that 2 fewer PARBs would 

receive notices (46 additional 

individuals * 0.05) and there would be 

4 fewer notices total (2 enrollees * 2 

notices/enrollee). Approximately 1,518 

(30,365 * 0.05) PARBs overall would 

receive an initial and second notice (or 

alternate second notice) annually. We 

estimate it takes a pharmacy technician 

at $38.70/hr approximately 5 minutes 

(0.0833 hr) to send each notice and a 

total of 10 minutes (0.1667 hr) per 

enrollee to send both notices. In 

aggregate, we estimate an annual burden 

with the proposed changes for sending 

notices of 253 hours (1,518 enrollees * 

0.1667 hr) at a cost of $9,791 (253 hr * 

$38.70/hr) to send both notices; see the 

row for notification for enrollees in 

Table J3. CMS 10141, presenting the 

current burden, includes an estimated 

notice burden of 1,319 hours and, with 

the hourly wage updated, a cost of 

$51,045; see the row for notification for 

enrollees in Table J2. Thus, we calculate 

a savings of 1,066 hours (1,319 ¥ 253) 

and $41,254 ($51,045 ¥ $9,791) with 

this current proposed burden; see the 

row for notification for enrollees in 

Table J4 and note that in Table J4 we list 

savings as a negative number. 

Amending the definition of 

‘‘exempted beneficiary’’ would also 

reduce the burden of disclosure of DMP 

data to CMS based on the outcome of 

case management of PARBs. Using 

30,365 beneficiaries requiring DMP data 

disclosure, we estimate that it would 

take (on average) 1 minute (0.0167 hr) 

at $38.70/hr for a sponsor’s pharmacy 

technician to document the outcome of 

case management and any applicable 

coverage limitations in OMS and/or 

MARx. In aggregate, we estimate an 

annual burden with the proposed 

changes for notification to CMS of 507 

hours (30,365 PARBs * 0.0167 hr) at a 

cost of $19,621 (507 hr * $38.70/hr); see 

the row for notification to CMS in Table 

J3. CMS–10141, presenting the current 

burden, includes an estimated data 

disclosure burden of 597 hours and, 

with updated hourly wages, a cost of 

$23,104; see the row for notification to 

CMS of Table J2. Thus, we calculate a 

savings of 90 hours (597 ¥ 507) and 

$3,483 ($23,104 ¥ $19,621) with this 

current proposed burden; see the row 

for notification to CMS in Table J4 and 

note that in Table J4 we list savings as 

a negative number. 

Table J2, presents information from 

the current package, CMS–10141, with 

wages adjusted to 2022 wages. 

BILLING CODE 4120–01–P 


ddrumheller on DSK120RN23PROD with PROPOSALS2
78592 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

Table J3 presents the estimated 

burden proposed in this rule which will 

be submitted with the new package, 

CMS–10874, which uses the currently 

approved burden from CMS–10141 as a 

baseline. 

In aggregate, these proposed changes 

will result in an annual reduction of 

cost of $3,049,392 and reduction of 

28,186 hours. The aggregate burden 

change (reduction) is presented in table 

J4, and will be submitted with the new 

package, CMS–10874. 


ddrumheller on DSK120RN23PROD with PROPOSALS2EP15NO23.027</GPH> EP15NO23.028</GPH>

TABLE J2: CURRENTLY APPROVED BURDEN ESTIMATES WITH UPDATED 

WAGES 

Time per Labor 

Regulatory Number of Number of Response Total Cost 

Citation Subiect Respondents Responses (hr) Time (hr) Total Cost 

Conduct Case 

Management 

423.153([)(2) (Annualized) 306 35,771 5 178,855 111.16 19,881,522 

Send 

Notices 

423.153(£)(5-8) (Annualized) 306 7 911 0.1667 1 319 38.70 51,045 

Report to CMS 

423.153(f)(l5) (Annualized) 306 35,771 0.0167 597 38.70 23,104 

Total 306 79,453 Varies 180,771 Varies 19,955,671 

TABLE J3: ESTIMATED BURDEN FROM THIS PROPOSED RULE 

Regulatory Subject Number Number of Time per Total Labor Total 

Citation of Responses Response Time Cost($/ Proposed 

Respond (PARBs (hr) (hr) hr) Burden 

ents after 

exclusions) 

423.153(1)(2) Conduct 319 30,365 5 151825 111.16 $16,876,867 

Case 

Managemen 

t 

(Annualized) 

423.153(1)(5-8) Send 319 1,518 0.1667 253 38.70 $9,791 

Notices 

(Annualized) 

423.153(1)(15) Report to 319 30,365 0.0167 507 38.70 $19,621 

CMS 

(Annualized) 

Total 319 62248 Varies 152 585 Varies $16 906279 
Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78593 

197Billingsly A. Is There a Biosimilar for Humira? 

Yes, Here Are 9 Humira Biosimilars Launching in 

2023. GoodRxHealth. July 12, 2023. Available from: 

https://www.goodrx.com/humira/biosimilars. 

BILLING CODE 4120–01–C 

4. ICRs Regarding Additional Changes to 

an Approved Formulary—Biosimilar 

Biological Product Maintenance 

Changes and Timing of Substitutions 

(§§ 423.4, 423.100, and 423.120(e)(2)) 

In section III.F. of this proposal, we 

are proposing a limited number of 

changes to update regulatory text we 

originally proposed in section III.Q. 

Changes to an Approved Formulary of 

the December 2022 proposed rule. In the 

December 2022 proposed rule, we 

proposed to reorganize current 

regulatory text to incorporate and as 

necessary conform with longstanding 

sub-regulatory guidance and operations 

with respect to changes to an approved 

formulary and associated notice 

provisions. We also proposed to permit 

the immediate substitution of 

interchangeable biological products. 

The proposals discussed in section III.Q. 

of the December 2022 proposed rule 

have not been finalized and remain 

under consideration. 

Specifically, in section III.F. of this 

proposed rule, we are now proposing to 

update the regulatory text proposed in 

December 2022 to the extent necessary 

to permit Part D sponsors to treat 

substitutions of biosimilar biological 

products other than interchangeable 

biological products as ‘‘maintenance 

changes’’ under § 423.100 as proposed 

in the December 2022 rule. We also are 

proposing to revise paragraphs (1) and 

(2) of the § 423.100 definition of 

‘‘maintenance changes’’ to clarify that 

certain substitutions need not take place 

‘‘at the same time’’ but that Part D 

sponsors can remove or make negative 

changes to a brand name drug or 

reference product within a certain time 

period after adding a corresponding 

drug or a biosimilar biological product 

other than an interchangeable biological 

product to the formulary. Lastly, we are 

proposing a few technical changes, 

including in support of the above 

specified proposals. 

In section VII.B.10. of the December 

2022 proposed rule (87 FR 79680), we 

outlined ICRs regarding the proposed 

provision ‘‘Changes to an Approved 

Formulary.’’ We described the 

methodology used to quantify burden, 

labor, and non-labor costs incurred by 

Part D plan sponsors related to making 

changes to their approved Part D 

formularies. The information collection 

responses included: (1) submitting a 

negative change request to CMS; (2) 

updating the formulary in CMS’s Health 

Plan Management System (HPMS); (3) 

updating the formulary and providing 

online notice of changes on the plan 

website; and (4) providing direct written 

notice to affected enrollees. The burden 

estimates in the December 2022 

proposed rule were based on actual 

formulary changes submitted to CMS 

since the ‘‘Changes to an Approved 

Formulary’’ proposals set out to codify 

existing guidance that Part D sponsors 

had already been following. 

We are not revising the December 

2022 proposed rule’s burden estimates 

for the purposes of this CMS–4205–P 

proposal which permits formulary 

substitutions of a biosimilar biological 

product other than an interchangeable 

biological product for the reference 

product as a maintenance change. New 

drugs and biological products are 

approved or licensed by the FDA and 

become available on the market at 

irregular intervals. Therefore, with 

respect to this provision, we cannot 

predict when new biosimilar biological 

products will enter the market or to 

what extent Part D sponsors will make 

formulary substitutions as a result. 

Several biosimilar biological products 

entered the market in 2023,197 but CMS 

has not seen a corresponding influx of 

non-maintenance negative change 

requests from Part D sponsors. It is 

unclear whether Part D sponsors are not 

requesting midyear formulary changes 

due to concerns about patient and 

provider hesitancy towards biosimilar 

biological products, or if the current 

policy that treats such formulary 

changes as non-maintenance changes 

disincentivizes Part D sponsors from 

making midyear formulary changes that 

will not apply to all enrollees currently 

taking the reference product. 

We will continue to base our burden 

estimates on CMS’s internal data on 

formulary changes from a recent 

contract year, as described in section 

VII.B.10. of the December 2022 

proposed rule and will consider 

comments received. We will revise our 

estimates, as appropriate, based on 

current data when finalizing the 

proposals from the December 2022 

proposed rule. The changes will also be 

posted for public review under control 

number 0938–0964 (CMS–10141) using 

the standard non-rule PRA process 

which includes the publication of 60- 

and 30-day Federal Register notices. 

The 60-day notice will publish soon 


ddrumheller on DSK120RN23PROD with PROPOSALS2EP15NO23.029</GPH>

TABLE J4: BURDEN CHANGES * 

Number 

of 

responses Time 

(PARBs per Total Labor Total 

Regulatory after response Time Cost Proposed 

Citation Subiect exclusion) (hr) (hr) ($/hr) Burden 

Conduct Case Management 

423 .153( f)(2) (Annualized) (5,406) 5 (27,030) 111.16 (3,004,655) 

423.153(f)(5-

8) Send Notices (annualized) (6_393) 0.1667 (L066) 38.70 (4L254) 

423.153(f)O5) Report to CMS (annualized) (5,406) 0.0167 (90) 38.70 (3,483.00) 

Total (28,186) Varies (3,049,392) 

* Table J4 is obtained by subtracting from Table J3 (burden of proposed regulation), Table J2 ( current burden). For 

example, for Case Management, -27,030=151,825 -171,855. 
78594 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

after the publication of the CMS–4205– 

F final rule. 

5. ICRs Regarding Expanding 

Permissible Data Use and Data 

Disclosure for MA Encounter Data 

(§ 422.310) 

In section III.H. of this proposed rule, 

we discuss two proposals to improve 

access to MA encounter data for certain 

purposes. We noted that our current 

regulatory language limits CMS’s ability 

to use and disclose MA encounter data 

to States for activities in support of 

administration or evaluation of the 

Medicaid program, including care 

coordination. Further, the regulation 

delays when CMS may share MA 

encounter data to State Medicaid 

agencies for care coordination and 

quality review and improvement 

activities for the Medicaid program, 

particularly with regard to dually 

eligible individuals. Our proposals to 

improve access to MA encounter data 

include all the following: 

• Adding ‘‘and Medicaid programs’’ 

to the current MA risk adjustment data 

use purposes codified at 

§ 422.310(f)(1)(vi) and (vii). 

• Adding § 422.310(f)(3)(v) to allow 

for risk adjustment data to be released 

prior to reconciliation if the data will be 

released to States for the purpose of 

coordinating care for dually eligible 

individuals. 

Together, these proposals aim to 

clarify and broaden the allowable data 

uses for CMS and external entities (for 

data disclosed in accordance with 

§ 422.310(f)(2) and (3)). We discuss the 

regulatory impact on CMS review and 

fulfillment of new MA encounter data 

requests in section XI., explaining that 

we do not anticipate any significant 

impact to CMS. 

As discussed in sections III.H. and 

XI., these proposed provisions would 

allow States to voluntarily request MA 

encounter data from CMS for certain 

allowable purposes to support the 

Medicaid program. Currently, States can 

request MA encounter data to support 

the administration of the Medicare 

program or Medicare-Medicaid 

demonstrations, and to conduct 

evaluations and other analysis to 

support the Medicare program 

(including demonstrations). In addition, 

we interpret the regulation as permitting 

use and disclosure of the MA encounter 

data for quality review and 

improvement activities for Medicaid as 

well as Medicare. 

When determining the potential 

burden of these proposals on States, we 

considered our existing data sharing 

program for States to request Medicare 

data for initiatives related to their dually 

eligible population. We expect the 

process to request MA encounter data 

would be similar to the process that 

States currently undertake to request 

new Medicare FFS claims and events 

data files or to update allowable data 

uses. All States, including the District of 

Columbia, maintain agreements with 

CMS that cover operational data 

exchanges related to the Medicare and 

Medicaid program administration as 

well as optional data requests for 

Medicare claims and events data. 

Therefore, States interested in 

requesting MA encounter data would 

not need to complete and submit a new 

data agreement for MA encounter data; 

instead, they would submit a use 

justification for the new data request 

and update their existing data 

agreement form. We note that requesting 

Medicare data is voluntary and that not 

all States currently request Medicare 

FFS claims or prescription drug events 

data for coordinating care of dually 

eligible beneficiaries, and of those States 

that request Medicare data, not all States 

request the same Medicare data files. As 

with Medicare FFS claims and events 

data, States would maintain the ability 

to choose if and when they want to 

request MA encounter data for existing 

or newly expanded uses. We further 

note that the process for States to submit 

a request for data and for CMS to review 

these requests are part of standard 

operations for CMS and many States. 

Additionally, we have technical 

assistance support to help States 

navigate the data request process and 

help States maintain their data 

agreements. 

In the August 2014 final rule, when 

we established several of the current 

provisions around CMS disclosure of 

MA encounter data, we explained that 

we had determined that ‘‘the proposed 

regulatory amendments would not 

impose a burden on the entity 

requesting data files.’’ (79 FR 50445). 

Similarly, for the proposed refinements 

to the approved data uses and the data 

disclosure in this proposed rule, we do 

not anticipate a significant change in 

burden for States as a result of these 

proposals, which clarify and expand 

MA encounter data uses and timing of 

data release. We solicit comment on our 

analysis. 

6. ICRs Regarding Standards for 

Determining Whether a Special 

Supplemental Benefit for the 

Chronically Ill Has a Reasonable 

Expectation of Improving the Health or 

Overall Function of an Enrollee 

(§ 422.102(f)(3)(iii) and (iv) and (f)(4)) 

The following proposed changes will 

be submitted to OMB for review under 

control number 0938–0753 (CMS–R– 

267). 

As explained in section IV.B. of this 

rule, due to increased offering of SSCBI, 

we are proposing to: (1) require the MA 

organization to establish, by the date on 

which it submits its bid, a bibliography 

of ‘‘relevant acceptable evidence’’ 

related to the item or service the MA 

organization would offer as an SSBCI 

during the applicable coverage year; (2) 

require that an MA plan follow its 

written policies (that must be based on 

objective criteria) for determining 

eligibility for an SSBCI when making 

such determinations; (3) require the MA 

plan to document denials of SSBCI 

eligibility rather than approvals; and (4) 

codify CMS’s authority to decline to 

accept a bid due to the SSBCI the MA 

organization includes in its bid and to 

review SSBCI offerings annually for 

compliance, taking into account the 

evidence available at the time. We now 

estimate burden. 

Item (4) is a burden specific to CMS 

and is therefore not subject to collection 

of information requirements. We choose 

to combine the burdens of: (1) and (2) 

as the evidence gathered under (1) will 

likely directly inform the criteria 

established under (2). 

In estimating the impact, we note the 

following: (i) Not all contracts offer 

SSBCI (only about 40 percent); (ii) not 

all plan benefit packages (PBP) offer 

them (only about 20 percent); (iii) the 

distribution of the number of SSBCI per 

PBP is highly skewed (for example, for 

2023 the average is about 8 while the 

median is 2); and (iv) both the median 

and 3rd quartile of the number of SSBCI 

per PBP reflect only a handful of SSBCI 

offered. 

Based on internal CMS data we are 

using 10,000 SSBCI per year for the 

three-year estimates required by the 

Collection of Information requirements. 

To comply with the requirements of the 

provision that would require 

bibliography, a staff member 

knowledgeable in health should be 

deployed. We are using a registered 

nurse. Establishing a bibliography 

requires research, including reading 

papers and assessing their quality. 

Because the bibliography would contain 

only citations and copies of the 

necessary information, and not any 

narrative, we assume these activities 

would take a day of work (8 hours), 

which can refer to the aggregate activity 

of 1 nurse working 8 hours or 2 nurses 

working 4 hours each. A plan would 

need to review and update its 

bibliography annually. We assume that 

updating an existing bibliography 

would take less time than establishing 

an initial bibliography. We estimate that 


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it would take 8 hours each year to 

update existing bibliographies. 

To create a single line-item, we 

estimate that it would take 8 hours at 

$85.60/hr for a registered nurse to create 

the bibliography for one plan. Thus, the 

median burden per plan is 16 hours (8/ 

hr per SSBCI * a median of 2 SSBCI) at 

a cost of $1,397 ($85.60/hr *16 hr). The 

aggregate cost across all plans would be 

80,000 hours (8 hours per SSBCI * 

10,000 aggregate SSBCI) at a cost of 

$6,848,000 (80,000 * $85.60/hr). 

Regarding the requirement for plans 

to document denials of SSCBI, it is 

reasonable that plans already have this 

information stored in their systems. 

Thus, we assume that plans will need to 

compile data already collected into a 

report or other transmittable format. We 

estimate that it would take 2 hours at 

$98.84/hr for a programmer to complete 

the initial software update. In aggregate, 

we estimate a one-time burden of 1,548 

hours (774 plans × 2 hr) at a cost of 

$153,004 (1,548 hr × $98.84/hr). 

7. ICRs Regarding Mid-Year Notice of 

Unused Supplemental Benefits 

(§§ 422.111 and 422.2267) 

The following proposed changes will 

be submitted to OMB for review under 

control number 0938–0753 (CMS–R– 

267). 

As explained in section IV.C of this 

proposed rule, per CMS regulations at 

§ 422.101, MA organizations are 

permitted to offer mandatory 

supplemental benefits, optional 

supplemental benefits, and special 

supplemental benefits for the 

chronically ill (SSBCI). The number of 

supplemental benefit offerings has risen 

significantly in recent years, as observed 

through trends identified in CMS’s 

annual PBP reviews. At the same time, 

CMS has received reports that MA 

organizations have observed low 

utilization for many of these benefits by 

their enrollees and it is unclear whether 

plans are actively encouraging 

utilization of these benefits by their 

enrollees. Currently, there is no 

requirement for MA organizations to 

conduct outreach to enrollees to 

encourage utilization of supplemental 

benefits. 

We have several concerns about this 

low utilization of some supplemental 

benefits. First, we are concerned that 

beneficiaries may be making enrollment 

decisions based on the allure of 

supplemental benefits that are 

extensively marketed by a given MA 

plan during the annual election period 

(AEP), but once enrolled in the plan the 

beneficiaries do not fully utilize, or 

utilize at all, those supplemental 

benefits during the plan year. Such 

under-utilization of supplemental 

benefits may hinder or nullify any 

potential health benefit value offered by 

these extra benefits. Additionally, 

section 1854(b)(1)(C) of the Act requires 

MA plans to provide the value of the 

MA rebates to enrollees; per CMS 

regulations at § 422.266, MA rebates 

must be provided to enrollees in the 

form of payment for supplemental 

benefits (including reductions in cost 

sharing for Part A and B benefits 

compared to Original Medicare), or 

payment of Part B or D premiums. 

Therefore, CMS has an interest in 

ensuring that the MA rebate is provided 

to enrollees in a way that they can 

benefit from the value of these rebate 

dollars. 

Hence, we are proposing to require 

plans engage in targeted outreach to 

inform enrollees of their unused 

supplemental benefits they have not yet 

accessed. This targeted outreach aims to 

increase utilization of these benefits, as 

it would increase enrollees’ awareness 

of the supplemental benefits available to 

them. 

This proposed requirement would 

still ensure that a minimum outreach 

effort is conducted by MA organizations 

to inform enrollees of supplemental 

benefits available under their plans they 

have not yet accessed. We propose that, 

beginning January 1, 2026, MA 

organizations must mail a mid-year 

notice annually, but not sooner than 

June 30 and not later than July 31 of the 

plan year, to each enrollee with 

information pertaining to each 

supplemental benefit available through 

the plan year that the enrollee has not 

accessed, by June 30 of the plan year. 

For each covered mandatory 

supplemental benefit and optional 

supplemental benefit (if elected) the 

enrollee is eligible for but has not 

accessed, the MA organization must list 

in the notice the information about each 

such benefit that appears in the 

Evidence of Coverage (EOC). For SSBCI, 

the notice must also include the 

proposed new SSBCI disclaimer. 

Finally, we are proposing that all 

notices must include the scope of the 

supplemental benefit(s), applicable costsharing, instructions on how to access 

the benefit(s), applicable information on 

use of any network providers 

application information for each 

available benefit consistent with the 

format of the EOC, and a toll free 

customer service number and, as 

required, corresponding TTY number to 

call if additional help is needed. 

In estimating the burden of this 

provision, we first note that plans 

already keep track of utilization patterns 

of benefits by enrollees. The primary 

burden is therefore dissemination of 

notices. In this regard there are three 

burdens: (1) a one-time update to 

software systems to produce reports; (2) 

a one-time update of policies and 

procedures; and (3) the printing and 

sending of notices to beneficiaries. 

• We estimate that a software 

developer working at $127.82/hr would 

take about 4 hours to update systems. In 

aggregate we estimate a one-time burden 

of 3,096 hours (774 prepaid contracts * 

4 hr/contract) at a cost of $395,731 

(3,096 hr * $127.82/hr). 

• We estimate that a business 

operations specialist working at $79.50/ 

hr would take 1 hour to update of 

policies and procedures. In aggregate we 

estimate a one-time burden of 774 hours 

(774 prepaid contracts * 1 hour/ 

contract) at a cost of $61,533 (774 hr * 

$79.50/hr). 

• The major cost would be printing 

and dissemination. There have been 

several recent CMS rules in which such 

printing and dissemination has been 

estimated. 

A recent estimate was presented in 

proposed rule, ‘‘Medicare Program; 

Contract Year 2024 Policy and 

Technical Changes to the Medicare 

Advantage Program, Medicare 

Prescription Drug Benefit Program, 

Medicare Cost Plan Program, Medicare 

Parts A, B, C, and D Overpayment 

Provisions of the Affordable Care Act 

and Programs of All-Inclusive Care for 

the Elderly; Health Information 

Technology Standards and 

Implementation Specifications,’’ CMS– 

4201–P, (87 FR 79452) published on 

December 27, 2022. We have checked 

the prices listed there for paper and 

toner and found them consistent with 

current pricing. 

• Cost of paper: We assume $3.50 for 

a ream of 500 sheets. The cost for one 

page is $0.007 ($3.50/500 sheets). 

• Cost of toner: We assume a cost of 

$70 for 10,000 pages. The toner cost per 

page is $0.007 ($70/10,000 pages). 

• Cost of postage: We estimate a bulk 

rate mailing of $0.12 for 1,000 notices, 

or $0.00012. We particularly solicit 

stakeholder feedback on their 

experience in bulk rates. We note that 

the particular provision for which this 

estimate was provided in CMS–4201, 

DMP, had HIPPA requirements 

necessitating first class postage. 

However, notifications about the lack of 

use of supplemental benefits would be 

similar to EOBs which need not be sent 

by first class postage. 

We believe it reasonable that every 

MA enrollee has at least one 

supplemental benefit that they have not 

used. Since PDPs do not provide 

supplemental benefits, we would 


ddrumheller on DSK120RN23PROD with PROPOSALS2
78596 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

require 32 million mailings for the 32 

million enrollees in prepaid contracts. 

Thus, the expected price per page of 

mailing is $0.01412 ($0.007 for paper 

plus $0.007 for toner plus 0.00012 for 

postage). The aggregate non-labor cost 

for 32 million mailings of one page 

would be $451,840 (32,000,000 * 

$0.01412). We do not have a definite 

basis for estimating the average number 

of pages needed per enrollee. Some 

enrollees may only require 1 page listing 

1 to 3 benefits with all information 

required by CMS. Some enrollees may 

require more. We are estimating 3 pages 

on average per enrollee but solicit 

stakeholder feedback. Thus, the total 

non-labor cost would be $1,355,520 (3 

pages * $451,840/page). 

8. ICRs Regarding New Requirements for 

the Utilization Management Committee 

(§ 422.137) 

As discussed in section IV.D. of this 

proposed rule, we are adding new 

requirements related to the Utilization 

Management (UM) Committee 

established at § 422.137. 

The following proposed changes will 

be submitted to OMB for review under 

control number 0938–0964 (CMS– 

10141). 

We are proposing at § 422.137(c)(5) to 

require a member of the UM committee 

have expertise in health equity. 

Reviewing UM policies and procedures 

is an important beneficiary protection, 

and adding a committee member with 

expertise in health equity will ensure 

that policies and procedures are 

reviewed from a health equity 

perspective. We estimate that a 

compliance officer working at $74.02/hr 

would take 30 minutes for a one-time 

update of the policies and procedures. 

In aggregate, we estimate a one-time 

burden of 483 hours (966 plans * 0.5 hr) 

at a cost of $35,752 (483 hr * $74.02/hr). 

The following proposed changes will 

be submitted to OMB for review under 

control number 0938–0964 (CMS– 

10141). 

We are proposing at § 422.137(d)(6) to 

require the UM committee to conduct an 

annual health equity analysis of the use 

of prior authorization and publicly post 

the results of the analysis to the plan’s 

website. The analysis would examine 

the impact of prior authorization, at the 

plan level, on enrollees with one or 

more of the following social risk factors: 

(i) receipt of the low-income subsidy for 

Medicare Part D, or being dually eligible 

for Medicare and Medicaid, or (ii) 

having a disability, as reflected in 

CMS’s records regarding the basis for 

Medicare Part A entitlement. To gain a 

deeper understanding of the impact of 

prior authorization practices on 

enrollees with the specified SRFs, the 

proposed analysis must compare 

metrics related to the use of prior 

authorization for enrollees with the 

specified SRFs to enrollees without the 

specified SRFs. The metrics that must 

be stratified and aggregated for all items 

and services for this analysis are as 

follows: 

• The percentage of standard prior 

authorization requests that were 

approved. 

• The percentage of standard prior 

authorization requests that were denied. 

• The percentage of standard prior 

authorization requests that were 

approved after appeal. 

• The percentage of prior 

authorization requests for which the 

timeframe for review was extended, and 

the request was approved. 

• The percentage of expedited prior 

authorization requests that were 

approved. 

• The percentage of expedited prior 

authorization requests that were denied. 

• The average and median time that 

elapsed between the submission of a 

request and a determination by the MA 

plan, for standard prior authorizations. 

• The average and median time that 

elapsed between the submission of a 

request and a decision by the MA plan 

for expedited prior authorizations. 

We estimate that a software and web 

developer working at an hourly wage of 

$120.14/hr would take 8 hours at a cost 

of $961 (8 hr * $120.14/hr) for 

developing the software necessary to 

collect and aggregate the data required 

to produce the report. In aggregate, we 

estimate a one-time burden of 7,728 hr 

(966 plans * 8 hr/plan) at a cost of 

$928,442 (7,728 hr * $120.14/hr). 

The following proposed changes will 

be submitted to OMB for review under 

control number 0938–0753 (CMS–R– 

267). 

Annually, the report must be 

produced and posted to the plan’s 

website. The health equity analysis and 

public reporting must be easily 

accessible, without barriers, including 

but not limited to ensuring the 

information is available: free of charge; 

without having to establish a user 

account or password; without having to 

submit personal identifying information 

(PII); to automated searches and direct 

file downloads through a link posted in 

the footer on the plan’s publicly 

available website, and includes a txt file 

in the root directory that includes a 

direct link to the machine-readable file 

of public reporting and health equity 

analysis to establish and maintain 

automated access. We believe that 

making this information more easily 

accessible to automated searches and 

data pulls and capturing this 

information in a meaningful way across 

MA organizations will help third parties 

develop tools and researchers conduct 

studies that further aid the public in 

understanding the information. We 

assume the plans’ programmers will 

make this an automated process 

accessing data already in the plans’ 

systems; hence, we estimate minimal 

time to produce and inspect the report 

prior to posting. We estimate a Business 

Operations Specialist working at 

$79.50/hr would take 0.1667 hr (10 

minutes) to produce, inspect, and post 

the report at a cost of $13 ($79.50/hr * 

0.1667 hr). In the aggregate, we estimate 

an annual burden of 161 hours (966 

plans * 0.1667 hr/plan) at a cost of 

$12,800 (161 hr * $79.50/hr). 

9. ICRs Regarding Agent Broker 

Compensation (§ 422.2274) 

The following proposed changes will 

be submitted to OMB for review under 

control number 0938–0753 (CMS–R– 

273). 

Currently, agents and brokers are 

compensated by MA plans at a base rate 

with a maximum of $601 per enrollee, 

plus administrative payments. In 

section VI.B. of this proposed rule, we 

are proposing to raise the maximum 

compensation rate to a fixed amount 

that covers two basic activities that 

agents and brokers perform: (1) training 

and testing; and (2) other necessary 

administrative activities such as 

recording and transcription. The 

training and testing focus on the 

information that agents and brokers may 

or may not disclose about the Medicare 

program and the plans they represent. 

The training and testing involve the 

transmission of information to agents 

and brokers about Medicare rules. 

Prior to stating our estimates, we 

emphasize that there are numerous data 

challenges in formulating an exact 

amount of compensation. Therefore, we 

especially invite stakeholder comments 

on all our assumptions and conclusions. 

More specifically, the estimates that 

follow address three areas where we 

have uncertainty: (1) the number of 

agent and brokers actively working in 

selling Medicare products; (2) the 

number of new enrollees in nonemployer MA plans and PDPs; and (3) 

the percent of new enrollments effected 

by agent and brokers. Our assumptions 

and supportive data are presented in 

Table J5. 


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We now present estimates for the two 

activities listed previously: (1) training 

and testing per enrollee, and (2) other 

necessary administrative activities such 

as recording and transcription. 

a. Cost of Training 

CMS requires that agents be certified, 

as evidenced by attending training and 

passing certain tests, in order to sell 

Medicare products. Many agents and 

brokers and many plans prefer the use 

of a recognized certification 

organization such as AHIP (https://

www.ritterim.com/blog/what-is-ahipcertification-and-how-do-i-get-it/#pdpebook) for training and testing. The 

AHIP training and certification costs 

$175. However, some plans provide a 

discount of $50; and some plans will 

pay for the training. The training allows 

three attempts at passing. If the agent or 

broker fails three times, some plans will 

not recognize their certification even if 

they eventually pass. For those plans 

that do recognize continued attempts, 

the agent must pay an additional $175. 

Therefore, we believe it reasonable to 

set the average cost of training at $125 

and assume that most agents and 

brokers pass within their first three 

attempts (we lack data on this and invite 

stakeholder comment). We are treating 

the $125 as a non-labor business 

expense (and invite comments on this 

assumption). Finally, we note that this 

$125 fee, corresponds to $12.50 per 

enrollee, since we estimate there are 2 

million new enrollees, half of which (1 

million enrollees) are affected by the 

100,000 agent and brokers, implying 

that on average each agent and broker 

recruits 10 enrollees. Therefore, the 

$125 cost when divided by the number 

of enrollees gives a $12.50/enrollee cost 

($125/10). 

b. Burden Associated With 

Transcription and Recording 

We are estimating 30 minutes (0.5 hr) 

to account for the time and expense of 

recording and storing calls (and solicit 

stakeholder comment on this 

assumption). As already noted, based on 

the occupational title ‘‘Insurance Sales 

agents’’ we assume a mean hourly wage 

of $37.00/hr. Thus, the fair market value 

(FMV) per enrollee for transcription and 

recording would be $18.50 ($37.00/hr * 

0.5 hr). 

c. Total Cost 

Thus, the aggregate cost per enrollee 

is $31 ($18.50 for transcription and 

recording + $12.50 for training and 

testing). The aggregate cost over all new 

enrollees would be $31 million ($31/ 

enrollee × 1,000,000 new enrollees 

affected annually). 

We have focused on new enrollments, 

since the cost of the administrative 

activities discussed is predominantly 

overhead not closely connected with 

actual enrollments, and we are more 

accurately able to track new 

enrollments, so they serve as a better 

basis for attaching these payments. 

10. ICRs Regarding Adding Proposed 

New Rationale for an Exception From 

the Network Adequacy Requirements in 

§ 422.116(b) Through (e) 

The following proposed changes will 

be submitted to OMB for review under 

control number 0938–1346 (CMS– 

10636). 

Historically, the industry has stated 

that CMS’s current network adequacy 

criteria under § 422.116 create 

challenges for facility-based 

Institutional Special Needs Plans (I– 

SNP) because facility-based I–SNP 

enrollees access services and seek care 

in a different way than enrollees of 

other plan types. Thus, we are 

proposing to broaden our acceptable 

rationales for facility-based I–SNPs 

when submitting a network exception 

under § 422.116(f). The first proposed 

new basis for an exception request is 

that a facility-based I–SNP is unable to 

contract with certain specialty types 

required under § 422.116(b) because of 

the way enrollees in facility-based I– 

SNPs receive care. Facility-based I–SNP 

may also request an exception from the 

network adequacy requirements in 

§ 422.116(b) through (e) if: The I–SNP 

covers Additional Telehealth Benefits 

(ATBs) consistent with § 422.135 and 

uses ATB telehealth providers of the 

specialties listed in paragraph (d)(5) to 

furnish services to enrollees; When 

substituting ATB telehealth providers of 

the specialties listed in paragraph (d)(5) 

for in-person providers, the facilityVerDate Sep<11>2014 20:26 Nov 14, 2023 Jkt 262001 PO 00000 Frm 00123 Fmt 4701 Sfmt 4702 E:\FR\FM\15NOP2.SGM 15NOP2

ddrumheller on DSK120RN23PROD with PROPOSALS2EP15NO23.030</GPH>

TABLE JS: THREE ESTIMATES USED IN THE ANALYSIS 

Item Estimate Partially Suooortive Data 

Number of agent brokers selling Medicare 100,000 The Bureau of Labor Statistics occupational 

handbook lists about 340,000 insurance agents 

(including life insurance agents, auto insurance 

agents etc.). We assume one third are involved with 

health plans 

(httns://www.bls.e:ov/oes/2022/mav/oes41302l.htm). 

Number of new enrollees per year for non-employer 2 million Published CMS data (h11,Qs://www.cms.gov/researchMA plans and stand-alone prescription drug plans statistics-data-and-fil:stems/statistics-trends-andreoorts/mcradvuartdenroldata) shows MA non 

employer enrollment increasing steadily by 2 million 

a year since 2020. It shows PDP enrollment 

decreasing steadily by 1⁄2 million a year. This number 

is an overestimate since it includes deaths, ignores 

migrations from MA to FFS, ignores the downward 

trend in PDPs and i!mores milmltions between olans. 

Per cent of new enrollments effected by agent 50% We do not have any data on this. Furthermore, many 

brokers agents work for themselves and do not have to report 

to CMS about the number of new enrollments they 

effect. Traditionally we have used 50% when we do 

not have data. Additionally, we are soliciting 

stakeholder comment in this area. 
78598 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

based I–SNP would fulfill the network 

adequacy requirements in § 422.116(b) 

through (e); The I–SNP complies with 

§ 422.135(c)(1) and (2) by covering inperson services from an out-of-network 

provider at in-network cost sharing for 

the enrollee who requests in-person 

services instead of ATBs; and the I–SNP 

provides substantial and credible 

evidence that the enrollees of the 

facility-based I–SNP receive sufficient 

and adequate access to all covered 

benefits. 

To determine the potential burden 

regarding this proposal, we considered 

the one-time burden for MA 

organizations to update policies. The 

other burdens associated with this 

provision involve updates to the HPMS 

system, which is done by CMS and its 

contractors and not subject to COI 

review. 

MA organizations that offer Facilitybased I–SNPs are already required to 

conduct work related to network 

adequacy reviews that happen during 

the initial or service area expansion 

application process, or every 3 years for 

the triennial review. Further, MA 

organizations that offer facility-based I– 

SNPs should already have measures in 

place to submit data to meet CMS 

network adequacy review requirements 

to CMS, so there is no additional 

burden. 

We understand that MA organizations 

will need to update their policies and 

procedures related to broadening our 

acceptable rationales for facility-based 

I–SNPs when submitting a network 

exception. We estimate that a business 

operations specialist working at $79.50/ 

hr would take 5 minutes (0.0833 hr) to 

update policies and procedures related 

to this task. In aggregate, we estimate a 

one-time burden of 0.8 hour (10 facilitybased I–SNP contracts * 0.0833 hr) at a 

cost $64 (0.8 hr * $79.50/hr). 

11. ICRs Regarding Increasing the 

Percentage of Dually Eligible Managed 

Care Enrollees Who Receive Medicare 

and Medicaid Services From the Same 

Organization (§§ 422.503, 422.504, 

422.514, 422.530, and 423.38) 

At § 423.38(c)(4) we are proposing to 

replace the current quarterly special 

enrollment period (SEP) with a onetime-per month SEP for dually eligible 

individuals and others enrolled in the 

Part D low-income subsidy program to 

elect a standalone PDP. At 

§ 423.38(c)(35), we propose a new 

integrated care SEP to allow dually 

eligible individuals to elect an 

integrated D–SNP on a monthly basis. 

The burden associated with the current 

quarterly dual/LIS SEP at § 423.38(c)(4) 

is currently approved by OMB under 

control number 0938–0964 (CMS– 

10141). 

The proposed changes related to a 

new integrated care SEP at 

§ 423.38(c)(35) will be submitted to 

OMB for review under control number 

0938–0964 (CMS–10141). 

In section VIII.C. of this proposed 

rule, we propose amending 

§§ 422.514(h), 422.503(b), 422.504(a), 

and 422.530(c). Proposed § 422.514(h) 

would require an MA organization’s 

parent organization, where that MA 

organization offers a D–SNP (and that 

parent organization also contracts with 

the State as a Medicaid managed care 

organization (MCO) in the same service 

area), to only offer one D–SNP for fullbenefit dually eligible individuals. The 

proposed regulation at § 422.514(h) 

would also require the affected D–SNP 

to limit new enrollment to individuals 

enrolling in, or in the process of 

enrolling in, the affiliated Medicaid 

MCO effective 2027, and further require 

the D–SNP to limit all enrollment to 

individuals enrolled in, or in the 

process of enrolling in the affiliated 

MCO effective 2030. A new contract 

provision at § 422.503(b)(8) would 

prohibit parent organizations from 

offering a new D–SNP when that D–SNP 

would result in noncompliance with the 

proposed regulation at § 422.514(h). 

Additionally, the proposed regulation at 

§ 422.504(a)(20) would require 

compliance with § 422.514(h). To 

support parent organizations seeking to 

consolidate D–SNPs, we also propose 

§ 422.530(c)(4)(iii) that would provide a 

new crosswalk exception to allow D– 

SNP parent organizations to crosswalk 

enrollees (within the same parent 

organization and among consistent plan 

types) where they are impacted by the 

requirements at § 422.514(h). The 

proposed changes related to MA 

organizations that offer multiple D– 

SNPs in a service area (§§ 422.514(h), 

422.503(b), 422.504(a), and 422.530(c)) 

with a Medicaid MCO will be submitted 

to OMB for review under control 

number 0938–0753 (CMS–R–267). 

a. MA Plan Requirements and Burden 

We are proposing to redesignate 

§ 423.38(c)(35) as § 423.38(c)(36) and 

proposing a new integrated care special 

enrollment period (SEP) at 

§ 423.38(c)(35) that would allow 

enrollment in any month into FIDE 

SNPs, HIDE SNPs, and AIPs for those 

dually eligible individuals who meet the 

qualifications for such plans. The 

proposed integrated care SEP at 

§ 423.38(c)(35) would require plans to 

update guidance and train staff. That 

new burden would be limited to FIDE 

SNPs, HIDE SNPs, and AIPs. We expect 

that plans would need one software 

engineer working 4 hours to update 

software and one business operations 

specialist working 4 hours to update 

plan policies and procedures and train 

staff in the first year with no additional 

burden in future years. In aggregate, we 

estimate a one-time burden (for plan 

year 2025) of 904 hours (113 plans * 8 

hr/plan) at a cost of $93,709 (113 plans 

× [(4 hr * $127.82/hr) + (4 hr * $79.50/ 

hr)]). We do not anticipate any new 

burden to plans after the initial year. 

This will be submitted to OMB for 

review under control number 0938– 

0964 (CMS–10141). 

The proposed provisions at 

§§ 422.514(h) and 422.530(c)(4)(iii) 

would create burden for MA 

organizations where they offer multiple 

D–SNPs in a service area with a 

Medicaid MCO. Impacted MA 

organizations would need to non-renew 

or (more likely) combine plans and 

update systems as well as notify 

enrollees of plan changes. We expect 

that MA organizations would need two 

software engineers working 4 hours to 

update software in the first year with no 

additional burden in future years and 

one business operations specialist 

working 4 hours to update plan policies 

and procedures in the first year with no 

additional burden in future years. In 

aggregate, we estimate a one-time 

burden (for plan year 2027) of 600 hours 

(50 plans * 12 hr/plan) at a cost of 

$67,028 (50 plans × [(8 hr * $127.82/hr) 

+ (4 hr * $79.50/hr)]). This will be 

submitted to OMB for review under 

control number 0938–0753 (CMS–R– 

267). 

b. Medicare Enrollee Requirements and 

Burden 

Proposed amendments to 

§ 423.38(c)(4) and (35) would affect the 

circumstances in which individuals can 

change plans. Individuals can complete 

an enrollment form to effectuate such 

changes, and we have previously 

estimated that the forms take 0.3333 

hours (20 min) to complete as cited 

under OMB control number 0938–0964 

(CMS–10141). However, Medicare 

beneficiaries make enrollment choices 

currently, and we do not expect the 

overall volume of enrollment selections 

to materially change if our proposals are 

finalized. Therefore, we do not believe 

the proposals at § 423.38(c)(4) and (35) 

would impact the burden estimates that 

are currently approved under 0938– 

0964 (CMS–10141). Similarly, we are 

not proposing any changes to that 

collection’s currently approved forms. 

In the section XI. of this proposed 

rule, we describe the impacts related to 

the expected enrollment shift from nonVerDate Sep<11>2014 20:26 Nov 14, 2023 Jkt 262001 PO 00000 Frm 00124 Fmt 4701 Sfmt 4702 E:\FR\FM\15NOP2.SGM 15NOP2

ddrumheller on DSK120RN23PROD with PROPOSALS2
Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78599 

198These 30 non-SNP MA plans are located in 

Arizona, California, Connecticut, Idaho, Illinois, 

Louisiana, Nevada, New Hampshire, New Mexico, 

Oklahoma, Oregon, Pennsylvania, Tennessee, 

Vermont, and Virginia. 

199These 40 non-SNP MA plans are located in 

Arkansas, California, Connecticut, Georgia, Illinois, 

Indiana, Iowa, Kansas, Kentucky, Maine, 

Massachusetts, Michigan, Minnesota, Mississippi, 

Missouri, Nevada, New Mexico, New York, Ohio, 

Oklahoma, Oregon, Pennsylvania, Rhode Island, 

and Tennessee. 

200The 2 non-SNP MA plans are located in New 

Hampshire and Vermont, neither of which have a 

D–SNP as of contract year 2023. 

201These 28 plans have total enrollment of 53,334 

individuals as of January 2023. 

202These 40 plans have total enrollment of 92,100 

individuals as of January 2023. 

integrated MA–PDs into FIDE SNPs, 

HIDE SNPs, and AIPs over time as more 

D–SNPs align with Medicaid MCOs. 

12. ICRs Regarding Contracting 

Standards for Dual Eligible Special 

Needs Plan (D–SNP) Look-Alikes 

(§ 422.514) 

The following proposed changes will 

be submitted to OMB for review under 

control number 0938–0753 (CMS–R– 

267) consistent with burden on MA 

plans identified as D–SNP look-alikes 

under § 422.514(d) through (e) (see 

section VIII.G. of this proposed rule). 

As described in section VIII.G. of this 

proposed rule, we propose lowering the 

D–SNP look-alike threshold from 80 

percent to 60 percent over a two-year 

period. We propose a limitation on nonSNP MA plans with 70 or greater 

percent dually eligible individuals for 

CY 2025. For CY 2026, we are proposing 

to reduce the threshold from 70 percent 

to 60 percent or greater dually eligible 

enrollment as a share of total 

enrollment. This incremental approach 

would minimize disruptions to dually 

eligible individuals and allow plans and 

CMS to operationalize these transitions 

over a two-year period. 

We would maintain processes to 

minimize disruption for the enrollees in 

plans affected by this proposed change. 

We propose to apply the existing 

transition processes and procedures at 

§ 422.514(e) to non-SNP MA plans that 

meet the proposed D–SNP look-alike 

contracting limitation of 70 percent or 

greater dually eligible individuals 

effective plan year 2025 and 60 percent 

or greater dually eligible individuals 

effective plan year 2026. Consistent 

with the initial years of implementation 

of the D–SNP look-alike contract 

limitations with the 80-percent 

threshold, maintaining these transition 

processes and procedures would help to 

minimize disruption for current 

enrollees as a result of the prohibition 

on contract renewal for existing D–SNP 

look-alikes. For plan year 2027 and 

subsequent years, we propose to limit 

the § 422.514(e) transition processes and 

procedures to D–SNP look-alikes 

transitioning dually eligible enrollees 

into D–SNPs. Based on our experience 

with D–SNP look-alike transitions 

through plan year 2023, the vast 

majority of enrollees transitioned to 

other MA–PDs under the same parent 

organization as the D–SNP look-alike. 

Based on our review of D–SNP lookalike transition plans thus far, we expect 

the experience for transitions effective 

plan year 2024 to follow a similar 

pattern. 

MA organizations can utilize other 

CMS processes to transition D–SNP 

look-alike enrollees to other MA plans. 

For example, an MA organization can 

utilize the CMS crosswalk process if it 

is transitioning the full D–SNP lookalike enrollment to one non-SNP plan 

benefit package (PBP) of the same type 

offered by the same MA organization 

under the same contract and the 

requirements at § 422.530 for a 

crosswalk are met. An MA organization 

moving the entire enrollment of the D– 

SNP look-alike PBP to another PBP of 

the same type under the same contract 

may structure this action as a 

consolidation of PBPs and use the 

crosswalk for consolidated renewal 

process, under § 422.530(b)(1)(ii). An 

MA organization may utilize the 

crosswalk exception process, subject to 

CMS approval, at § 422.530(c)(2) to 

transition the entire enrollment of the 

MA contract (including the D–SNP lookalike) to another MA contract (of the 

same type) offered by another MA 

organization with the same parent 

organization as part of a contract 

consolidation of separate MA contracts. 

While multiple options exist for MA 

organizations to transition D–SNP lookalike enrollees to other non-SNP MA 

plans, these pathways are not available 

for moving enrollees to D–SNPs. 

Using data from the 2023 contract 

year, we estimate that there are 30 nonSNP MA plans 198 that have enrollment 

of dually eligible individuals of 70 

percent through 79.9 percent of total 

enrollment and 40 non-SNP MA 

plans 199 that have enrollment of dually 

eligible individuals of 60 percent 

through 69.9 percent of total enrollment. 

As of January 2023, the 30 non-SNP MA 

plans have total enrollment of 53,334 

enrollees and the 40 non-SNP MA plans 

have 92,100 enrollees collectively. Of 

the 30 non-SNP MA plans with 70–79.9 

percent dually eligible enrollment, 28 

are in States where for contract year 

2023 there are D–SNPs or comparable 

managed care plans and would be 

subject to § 422.514(d).200 Of the 40 

non-SNP MA plans with 60–69.9 

percent dually eligible enrollment, all 

are in States where for contract year 

2023 there are D–SNPs or comparable 

managed care plans and would be 

subject to § 422.514(d). As of January 

2023, these 68 plans have total 

enrollment of 145,434 for contract year 

2023. If these plans all have the same 

enrollment pattern in 2024, MA 

organizations would need to non-renew 

for plan year 2025 those 28 plans that 

exceed our proposed criteria to lower 

the threshold to 70 percent for plan year 

2025.201 Similarly, MA organizations 

with plans that exceed our proposed 

criteria to lower the threshold to 60 

percent for plan year 2026 would need 

to non-renew 40 plans for plan year 

2026.202 Each MA organization would 

have the opportunity to make an 

informed decision to transition 

enrollees into another MA–PD plan 

(offered by it or by its parent 

organization) by: (1) identifying, or 

applying, or contracting for, a qualified 

MA–PD plan, including a D–SNP, in the 

same service area; or (2) creating a new 

D–SNP through the annual bid 

submission process. Consistent with our 

experience with D–SNP look-alikes nonrenewing for plan years 2021 through 

2023, we expect the vast majority of D– 

SNP look-alike enrollees to be 

transitioned into a plan offered by the 

same parent organization as the D–SNP 

look-alike, and we expect in rare 

instances that the non-renewing plan 

may choose to not transition enrollees. 

Plan year 2023 was the only plan year 

when D–SNP look-alikes transitioned 

enrollees to Traditional Medicare rather 

than an MA plan under the same parent 

organization. In plan year 2023, 9 of the 

47 D–SNP look-alikes transitioned 

approximately 3,300 enrollees to 

Traditional Medicare, which accounted 

for less than 2 percent of total enrollees 

transitioned from D–SNP look-alikes. 

The changes required of MA 

organizations based on this proposed 

rule would impact D–SNP look-alikes 

and their enrollees (see section VIII.G. of 

this proposed rule). While we cannot 

predict the actions of each affected MA 

organization with 100 percent certainty, 

we base our burden estimates on the 

current landscape of D–SNP look-alikes 

and our experience with transitions of 

D–SNP look-alikes through plan year 

2023. 

a. MA Plan Requirements and Burden 

As indicated, the following proposed 

changes will be submitted to OMB for 

review under control number 0938– 

0753 (CMS–R–267). 


ddrumheller on DSK120RN23PROD with PROPOSALS2
78600 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

At § 422.514(e), we established a 

process for an MA organization with a 

D–SNP look-alike to transition 

individuals who are enrolled in its D– 

SNP look-alike to another MA–PD plan 

offered by the MA organization, or by 

the same parent organization as the MA 

organization, to minimize disruption as 

a result of the prohibition on contract 

renewal for existing D–SNP look-alikes. 

This process allows, but does not 

require, the MA organization to 

transition dually eligible enrollees from 

D–SNP look-alikes into D–SNPs and 

other qualifying MA–PD plans for 

which the enrollees are eligible without 

the transitioned enrollees having to 

complete an election form. This 

transition process is conceptually 

similar to the proposed ‘‘crosswalk 

exception’’ procedures at § 422.530(a) 

and (b); however, § 422.514(e) allows 

the transition process to apply across 

contracts or legal entities and from nonSNP to SNPs provided that the receiving 

plan is otherwise of the same plan type 

(for example, HMO or PPO) as the D– 

SNP look-alike. 

Based on the experience of D–SNP 

look-alike transitions through plan year 

2023, we believe 95 percent of D–SNP 

look-alikes for plan years 2025 and 2026 

would be able to move enrollees into 

another MA–PD plan using the 

transition process established at 

§ 422.514(e) or existing crosswalk 

functionality at § 422.530 and would 

choose to transition enrollment for plan 

years 2025 and 2026. All are in States 

where for contract year 2023 there are 

D–SNPs or comparable managed care 

plans that would be subject to 

§ 422.514(d). Therefore, we are 

assuming the burden of 27 of the 28 

non-SNP MA plans with 70–79.9 

percent dually eligible enrollment and 

offered in a State with a D–SNP would 

transition enrollees for plan year 2025 

(for a January 2025 effective date) and 

38 of the 40 non-SNP MA plans with 

60–69.9 percent dually eligible 

enrollment would transition enrollees 

for plan year 2026 (for a January 2026 

effective date). Consistent with our 

estimates from the June 2020 final rule, 

we estimate each plan will take a onetime amount of 2 hours at $79.50/hr for 

a business operations specialist to 

submit all enrollment changes to CMS 

necessary to complete the transition 

process. D–SNP look-alikes that 

transition enrollees into another nonSNP plan will take less time than D– 

SNP look-alikes that transition eligible 

beneficiaries into a D–SNP because they 

would not need to verify enrollees’ 

Medicaid eligibility. The 2-hour time 

estimate would account for any 

additional work to confirm enrollees’ 

Medicaid eligibility for D–SNP lookalikes transitioning eligible enrollees to 

a D–SNP. Based on the previous 

discussion, the estimates for the burden 

for MA organizations to transition 

enrollees to other MA–PD plans during 

the 2025 to 2027 plan years is 

summarized in Table J6. 

Based on our experience through plan 

year 2023, we expect the vast majority 

of MA organizations with non-SNP MA 

plans with dually eligible enrollment 

between 60 and 80 percent of total 

enrollment also have an MA–PD plan 

with a premium of $0 or a D–SNP in the 

same service area as the D–SNP lookalike. Based on 2023 plan year data, of 

the 30 non-SNP MA plans with 70 to 

79.9 percent dually eligible enrollment, 

19 of these plans (63 percent) have a D– 

SNP within the same service area or 

nearly the same service area. Also based 

on 2023 plan year data, of the 40 nonSNP MA plans with 60 to 69.9 percent 

dually eligible enrollment, 24 of these 

plans (60 percent) have a D–SNP within 

the same service area or nearly the same 

service area. An MA organization with 

one of these non-SNP MA plans could 

expand its service area for an existing 

MA–PD plan or D–SNP. The MA 

organizations with the non-SNP MA 

plans between 60 and 79.9 percent 

dually eligible enrollment already have 

the opportunity to establish a D–SNP 

and expand their service areas. Any 

burden associated with these MA 

organizations establishing new D–SNPs 

and/or expanding their service areas 

would already be captured under 

currently approved burden under 

control number 0938–0935 (CMS– 

10237) for creating a new MA–PD plan 

to receive non-SNP MA plan enrollees. 

Per § 422.514(e)(2)(ii), in the Annual 

Notice of Change (ANOC) that the MA 

organization must send consistent with 

§ 422.111(a), (d), and (e), the MA 

organization would be required to 

describe changes to the MA–PD plan 

benefits and provide information about 

the MA–PD plan into which the 

individual is enrolled. 

Consistent with § 422.111(d)(2), 

enrollees will receive this ANOC 

describing the change in plan 

enrollment and any differences in plan 

enrollment at least 15 days prior to the 

first date of the annual election period 

(AEP). As each MA plan must send out 

the ANOC to all enrollees annually, we 

do not estimate that MA organizations 

will incur additional burden for 

transitioned enrollees. The current 

burden for the ANOC is approved by 

OMB under control number 0938–1051 

(CMS–10260). 

We expect 1 plan for plan year 2025 

and 2 plans for plan year 2026 would 

be required to send affected enrollees a 

written notice consistent with the nonrenewal notice requirements at 

§ 422.506(a)(2) and described at 


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TABLE J6: BURDEN FOR TRANSITIONING D-SNP LOOK-ALIKE ENROLLEES 

INTOANOTHER MA-PD 

Time per Total Cost (using 

Number of Response Total Time $79.50/hr for a business 

Year Plans (hr) (hr) operations specialist) ($) 

2025 27 2 54 4,293 

2026 38 2 76 6,042 

2027 12 2 24 1,908 

Total 77 6 154 12.243 

Average 25.667 (77/3) 2 (6/3) 51.334 4,081 (12,243/3) 

(154/3) 
Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78601 

§ 422.514(e)(4), as we anticipate—based 

on our experience with transitions 

through plan year 2023—not all D–SNP 

look-alikes would be able to transition 

their enrollees into another MA–PD 

plan (or plans). 

b. Enrollee Requirements and Burden 

In 2027 and subsequent years, we 

estimate that 12 plans per year would be 

identified as D–SNP look-alikes under 

§ 422.514(d). We base our estimate on 

the fact that there are 12 D–SNP lookalikes for plan year 2024, which is the 

first year following the phase in of the 

80-percent threshold. We expect our 

proposal to lower the threshold for 

identifying D–SNP look-alikes from 80 

percent to 60 percent would increase 

the number of plans identified as D– 

SNP look-alikes. However, we expect 

this increase to be offset by a reduction 

in D–SNP look-alikes due to our 

proposed changes to the § 422.514(e) 

transition process, which would limit 

use of the § 422.514(e) transition process 

to D–SNP look-alikes transitioning 

dually eligible enrollees into D–SNPs. 

Under our proposal, D–SNP look-alikes 

transitioning effective for plan year 2025 

and plan year 2026—including the 

newly identified D–SNP look-alikes 

based on the proposed threshold 

lowered to 70 percent and then 60 

percent—could continue to use the 

existing transition process under 

§ 422.514(e). Once the newly identified 

D–SNP look-alikes at the lower 

thresholds complete their transitions for 

plan year 2025 and plan year 2026, the 

§ 422.514(e) transition process could 

only be used for D–SNP look-alike 

transitioning enrollees into D–SNPs. We 

believe this proposed limit would give 

MA organizations a stronger incentive to 

avoid creating D–SNP look-alikes, due 

to the more limited opportunity for 

these plans to transition enrollees to 

non-D–SNPs. The proposed limit on the 

§ 422.514(e) transitions would be 

effective for plan year 2027 and 

subsequent years. We believe that these 

12 D–SNP look-alikes would non-renew 

and transition their enrollment into a D– 

SNP or other MA–PD plan. The annual 

burden is summarized in Table J6. We 

welcome comment on these 

assumptions. 

As indicated, the following proposed 

changes will be submitted to OMB for 

review under control number 0938– 

0753 (CMS–R–267). 

An individual transitioned from a D– 

SNP look-alike to another MA–PD plan 

may stay in the MA–PD plan receiving 

the enrollment or, using the AEP or 

another enrollment period (such as the 

MA OEP), make a different election. The 

enrollees may choose new forms of 

coverage for the following plan year, 

including a new MA–PD plan or 

receiving services through Traditional 

Medicare and enrollment in a standalone PDP. Because the enrollment 

transition process is effective on January 

1 and notices would be provided during 

the AEP, affected individuals have 

opportunities to make different plan 

selections through the AEP (prior to 

January 1) or the MA open enrollment 

period (OEP) (after January 1). Affected 

individuals may also qualify for a 

special enrollment period (SEP), such as 

the SEP for plan non-renewals at 

§ 422.62(b)(1) or the SEP for dually 

eligible/LIS beneficiaries at 

§ 423.38(c)(4), which this rule proposes 

to revise as discussed in section VIII.C. 

of this proposed rule. Based on our 

experience with D–SNP look-alike 

transitions through plan year 2023, we 

estimate that 99 percent of the 53,334 

D–SNP look-alike enrollees (52,801 

enrollees = 53,334 enrollees × 0.99) in 

the 30 non-SNP MA plans with dually 

eligible enrollment of 70 to 79.9 percent 

and 99 percent of the 92,100 D–SNP 

look-alike enrollees (91,179 enrollees = 

92,100 enrollees × 0.99) in the 40 nonSNP MA plans with dually eligible 

enrollment of 60 to 69.9 percent would 

transition into another plan under the 

same parent organization as the D–SNP 

look-alike. Of these 143,980 

transitioning enrollees (52,801 enrollees 

+ 91,179 enrollees), our experience with 

D–SNP look-alike transitions through 

plan year 2023 suggests that 14 percent 

would select a new plan or the 

Traditional Medicare and PDP option 

rather than accepting the transition into 

a different MA–PD plan or D–SNP 

under the same MA organization as the 

D–SNP in which they are currently 

enrolled. For plan year 2025, we 

estimate that 7,392 enrollees (52,801 

transitioning D–SNP look-alike 

enrollees * 0.14), would opt out of the 

new plan into which the D–SNP lookalike transitioned them. For plan year 

2026, we estimate that 12,765 enrollees 

(91,179 transitioning D–SNP look-alike 

enrollees * 0.14), would opt out of the 

new plan into which the D–SNP lookalike transitioned them. Consistent with 

the per response time estimate that is 

currently approved by OMB under 

control number 0938–0753 (CMS–R– 

267), we continue to estimate that the 

enrollment process requires 20 minutes 

(0.3333 hr). 

Based on the aforementioned 

discussion, Table J7, summarizes the 

hour and dollar burden for added 

enrollments for years 2025 to 2027. 

As stated previously, we believe that 

in 2027 and subsequent years, 12 plans 

would be identified as D–SNP lookalikes and therefore this proposed rule 

would have a much smaller impact on 

MA enrollees after the initial period of 

implementation. Since the current 70 

non-SNP MA plans with dually eligible 

enrollment of 60.0 to 79.9 percent have 


ddrumheller on DSK120RN23PROD with PROPOSALS2EP15NO23.032</GPH>

TABLE J7: BURDEN ON ENROLLEES FOR YEARS 2025-2027 

Number of Time /Enrollee Total Time Total Cost(@ 

Year Affected Enrollees (hr) (hr) $20. 71/hr) ($)* 

2025 7,392 0.3333 2,464 51,029 

2026 12,765 0.3333 4,255 88,121 

2027 3,490 0.3333 1,163 24,085 

Total 23,647 0.9999 7,882 163,235 

Average 7,882 0.3333 2,627 54,412 

(23,647/3) (0.9999/3) (7,882/3) (163,235/3) 

*Had we used $29.76/hour the mean wage for occupational code 00-0000 representing all occupations, the 

burden would change from $54,412 to $78,189 an increase of $23,777 
78602 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

203We expect the 15 most common languages for 

a given State to include any language required by 

the Medicaid program at § 438.10(d)(2). Therefore, 

our proposed rule would not impose additional 

burden on fully integrated dual eligible special 

needs plans and highly integrated dual eligible 

special needs plans, as defined at § 422.2, and 

applicable integrated plans, as defined at § 422.561, 

to comply with regulations at §§ 422.2267(a)(4) and 

423.2267(a)(4). 

145,434 enrollees in 70 plans, we 

estimate 24,932 enrollees (145,434 

enrollees * 12/70 plans) in 12 plans. 

The burden is summarized in Table J6. 

The average annual enrollee burden 

over 3 years is also presented in Table 

J6. 

13. ICRs Regarding Update to the MultiLanguage Insert Regulation (§§ 422.2267 

and 423.2267) 

The following proposed changes will 

be submitted to OMB for review under 

control number 0938–1421 (CMS– 

10802). 

The multi-language insert (MLI) 

required at §§ 422.2267(e)(31) and 

423.2267(e)(33) is a standardized 

communications material that informs 

enrollees and prospective enrollees that 

interpreter services are available in 

Spanish, Chinese, Tagalog, French, 

Vietnamese, German, Korean, Russian, 

Arabic, Italian, Portuguese, French 

Creole, Polish, Hindi, and Japanese. 

These are the 15 most common nonEnglish languages in the United States. 

Additionally, §§ 422.2267(e)(31)(i) and 

423.2267(e)(33)(i) require plans to 

provide the MLI in any non-English 

language that is the primary language of 

at least 5 percent of the individuals in 

a PBP service area but is not already 

included on the MLI. These regulations 

also provide that a plan may opt to 

include the MLI in any additional 

languages that do not meet the 5 percent 

threshold, where it determines that 

including the language would be 

appropriate. 

As discussed in section III.G. of this 

proposed rule, we are proposing to 

update §§ 422.2267(e)(31) and 

423.2267(e)(33) to require that notice of 

availability of language assistance 

services and auxiliary aids and services 

be provided in English and the 15 

languages most commonly spoken by 

individuals with limited English 

proficiency in a State and must be 

provided in alternate formats for 

individuals with disabilities who 

require auxiliary aids and services to 

ensure effective communication. Thus, 

under our proposal, MA organizations 

and Part D sponsors would send the 

Notice of Availability in English and the 

15 most common non-English languages 

in a State instead of the current MLI in 

the 15 most common non-English 

languages nationally. This proposed 

policy is consistent with a proposed 

rule that OCR published in August 2022 

(87 FR 47824). We also expect that this 

proposed policy would better align with 

the Medicaid translation requirements 

at § 438.10(d)(2).203 We propose to 

modify the language to note that this is 

a model communication material rather 

than a standardized communication 

material because we are no longer 

specifying the exact text that must be 

used. Even though the MA organizations 

and Part D sponsors could change the 

Notice of Availability, we are not 

accounting for such changes because we 

do not expect any MA organizations or 

Part D sponsors to make such changes. 

We do not expect this proposed 

policy to create any new collection of 

information burden for MA 

organizations or Part D sponsors since 

the August 2022 proposed rule indicates 

that OCR would provide the translated 

language for the Notice of Availability 

in the 15 most common non-English 

languages in a State or States. Also, the 

MA organizations and Part D sponsors 

are already distributing the MLI and, 

under this proposal, would instead 

distribute the Notice of Availability, so 

we do not anticipate any new burden 

associated with printing or mailing. In 

addition, the Notice of Availability 

would be a one-page document that 

would never be sent alone and therefore 

does not create additional postage costs. 

We expect some new burden for MA 

organizations and Part D sponsors 

operating plans across multiple States. 

Rather than sending the same MLI with 

the same 15 non-English language 

translations to plans in any State, under 

the proposed rule the plans under these 

MA organizations or Part D sponsors 

would need to send the Notice of 

Availability with translations in the 15 

most common non-English languages in 

each State in which the plan operates. 

Based on plan year 2023 data, we 

estimate there are approximately 20 MA 

parent organizations offering MA plans 

in multiple States with approximately 

3,900 PBPs and approximately 20 Part D 

sponsors offering Part D plans in 

multiple States with approximately 

1,400 Part D plans. Since many of these 

parent organizations have MA 

organizations at the State level, we 

estimate that these 20 parent 

organizations have approximately 220 

MA organizations covering PBPs by 

State. Similarly, we estimate that the 20 

Part D sponsors have approximately 50 

parent organizations covering PBPs by 

State. We believe the parent 

organizations would update systems 

software and plan policies and 

procedures as well as train staff at the 

MA organization and Part D sponsor 

level to cover all PBPs and Part D plans, 

respectively, offered in a State. We 

expect that MA organizations and Part 

D sponsors would need one software 

engineer working one hour to update 

systems software in the first year with 

no additional burden in future years and 

one business operations specialist 

working one hour to update plan 

policies and procedures and train staff 

in the first year with no additional 

burden in future years. For MA 

organizations, we estimate the burden 

for plan year 2025 at 440 hours (220 MA 

organizations * 2 hr/plan) at a cost of 

$56,241 (440 hr * $127.82/hr) for a 

software engineer to update systems to 

ensure the Notice of Availability with 

the correct State-specific languages is 

distributed with other communications 

and marketing materials. We estimate 

the burden for MA organizations for 

plan year 2025 to be 440 hours (220 MA 

organizations * 2 hr/plan) at a cost of 

$34,980 (440 hr * $79.50/hr) for a 

business operations specialist to update 

plan policies and procedures and train 

staff. For Part D sponsors, we estimate 

the burden for plan year 2025 at 100 

hours (50 Part D sponsors * 2 hr/plan) 

at a cost of $12,782 (100 hr * $127.82/ 

hr) for a software engineer to update 

systems to ensure the Notice of 

Availability with the correct Statespecific languages is distributed with 

other communications and marketing 

materials. We estimate the burden for 

Part D sponsors for plan year 2025 to be 

100 hours (50 Part D sponsors * 2 hr/ 

plan) at a cost of $7,950 (100 hr * 

$79.50/hr) for a business operations 

specialist to update plan policies and 

procedures and train staff. We do not 

anticipate any new burden to plans after 

the initial year. We will submit this 

burden to OMB for review under control 

number 0938–1421 (CMS–10802). 

We also note that, as part of the 

current MLI required at 

§§ 422.2267(e)(31) and 423.2267(e)(33), 

MA organizations and Part D sponsors 

must already include additional 

languages that meet the 5 percent 

service area threshold as required under 

§§ 422.2267(a)(2) and 423.2267(a)(3). 

Thus, MA organizations and Part D 

sponsors must currently review the 

most frequently used languages in a 

service area beyond the top 15 national 

languages. As a result, we do not believe 

the burden will be greater than our 

estimate note previously. We welcome 

comment on our assumptions. 


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EP15NO23.002</GPH>ddrumheller on DSK120RN23PROD with PROPOSALS2

TABLE JS: SUMMARY OF ANNUAL INFORMATION COLLECTION REQUIREMENTS AND 

Time per Total Labor Total C

Section( s) under Title 42 0MB Control No. Nwnberof Annnal Cost of 

oftheCFR Item (CMS ID No.) Respondents Responses Response Time Reporting First Ye

(hours) (hours) ($/hr) ($) 

Network 

422.116(b)(2) and (dX2) Adequacy in 0938-1346 742 742 0.0833 62 79.50 4,929 

and (5) Behavioral (CMS-10636) 

Health 

423.153(£)(2) DMP: Case 0938-IBD (CMS- 319 (5,406) 5 (27,030) 111.16 (3,004,6

Mana!!ement 10874) 

423.153(£)(5-8) DMP: Enrollee 0938-IBD (CMS- 319 (6,393) 0.1667 (1,066) 38.70 (41,254) 

notification 10874) 

423.153(£)(15) DMP:CMS 0938-IBD (CMS- 319 (5,406) 0.0167 (90) 38.70 (3,483) 

Notification 10874) 

SSBCI, 

422.102(f)(3)(iii) and (iv) expectation of 0938-0753 (CMS-R- 10,000 10,000 8 80,000 85.60 6,848,00

and (f)(4) health 267) 

imorovement 

422.102(f)(3)(iii) and (iv) SSBCI, 0938-0753 (CMS-R- 774 774 2 1,548 98.84 153,004 

and (f)(4) Documentation 267) 

Increased 

Utilization of 

422.111 and 422.2267 Supplemental 0938-0753 (CMS-R- 774 774 4 3,096 127.82 395,731 

Benefits, 267) 

Software 

Uodates 

Increased 

Utilization of 0938-0753 (CMS-R- 422.111 and 422.2267 Supplemental 774 774 1 774 79.50 61,533 

Benefits, 267) Policv Updates 

Increased 

Utilization of 0938-0753 (CMS-R- Non Non 1,355,52

422.111 and 422.2267 Supplemental 774 32,000,000 Non Labor (Non 

Benefits, 267) Labor Labor Labor) 

Mailings 

UM 0938-0964 422.137 Conunittee, (CMS-10141) 966 966 0.5 483 74.02 35,752 

uodate oolicies 

UM 

Committee, 0938-0964 422.137 Annual Health (CMS-10141) 966 966 8 7,728 120.14 928,442 

Equity 

Analysis 

UM 

422.137 Committee, 0938-0753 (CMS R 966 966 0.1667 161 79.50 12,800 

Website 267) 

Posting 

422.2274 Agent Broker 0938-0753 (CMS R 966 100,000 NA NA 31 31,000,0

C 267) 
BILLING CODE 4120–01–C 


EP15NO23.003</GPH>ddrumheller on DSK120RN23PROD with PROPOSALS2

422.116 I-SNPs 0938-1346 (CMS- 10 10 0.0833 1 79

10636) 

423.38(c)(35) D-SNP; SEP 0938-0964 (CMS- 113 113 8 904 Va

Pro!!l"ammers 10141) 

D-SNP 

422.514(h) and Combining 0938-0753 (CMS-R- 50 50 12 600 Va

422.530(c)( 4)(iii) Plans, 267). 

Pro!!l"ammer D-SNPLookAlikes, 

422.514(d) and (e) Transitioning 0938-0753 (CMS-R- 25.667*** 27 2 51.334 79

to other MA 267). 

PD, Plan Burden D-SNPLookAlikes, 

422.514(d) and (e) Transitioning 0938-0753 (CMS-R- 7882 7,882 0.3333 2,627 20

to other MA- 267). 

PD, Enrollee Burden•• 

Notice of 

422.2267 and 423.2267 Availability; 0938-1421 (CMS- 220 220 2 440 12

Part C Update 10802) 

ofSvstems 

Notice of 

422.2267 and 423.2267 Availability; 0938-1421 (CMS- 220 220 2 440 79

Part C Update 10802) 

of Policies 

Notice of 

422.2267 and 423.2267 Availability; 0938-1421 (CMS- 50 50 2 100 12

Part D Update 10802) 

of Systems 

Notice of 

422.2267 and 423.2267 Availability; 0938-1421 (CMS- 50 50 2 100 79

Part D Update 10802) 

of Policies 

Totals 32,136,318 INSERT Varies 70,928 Va

* Agent broker dollar burden includes both labor and non-labor components as explained in the narrative ** Had we used $29.76/hourthe mean wage for occupational code 00-0000 representing all occnpations, the burden would change from $54,412 to $78,189 a

*** The three-place accuracy is necessary to synchronize Table J6 with Table J8. Had we rounded the annual costs would not syuc. 
Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78605 

D. Submission of PRA-Related 

Comments 

We have submitted a copy of this 

proposed rule to OMB for its review of 

the rule’s information collection 

requirements. The requirements are not 

effective until they have been approved 

by OMB. 

To obtain copies of the supporting 

statement and any related forms for the 

proposed collections discussed 

previously, please visit the CMS website 

at https://www.cms.gov/regulationsand-guidance/legislation/ 

paperworkreductionactof1995/pralisting, or call the Reports Clearance 

Office at 410–786–1326. 

We invite public comments on these 

potential information collection 

requirements. If you wish to comment, 

please submit your comments 

electronically as specified in the DATES

and ADDRESSES sections of this 

proposed rule and identify the rule 

(CMS–4205–P), the ICR’s CFR citation, 

and the OMB control number. 

XI. Regulatory Impact Analysis 

A. Statement of Need 

The primary purpose of this proposed 

rule is to amend the regulations for the 

Medicare Advantage (Part C) program, 

Medicare Prescription Drug Benefit (Part 

D) program, Medicare cost plan 

program, and Programs of All-Inclusive 

Care for the Elderly (PACE). This 

proposed rule includes several new 

policies that would improve these 

programs beginning with contract year 

2025 as well as codify existing Part C 

and Part D sub-regulatory guidance. 

This proposed rule also includes 

revisions to existing regulations in the 

Risk Adjustment Data Validation 

(RADV) audit appeals process and the 

appeal process for quality bonus 

payment determination that would take 

effect 60 days after publication of a final 

rule. Revisions to existing regulations 

for the use and release of risk 

adjustment data would also take effect 

60 days after publication of a final rule. 

Additionally, this proposed rule would 

implement certain sections of the 

following Federal laws related to the 

Parts C and D programs: 

• The Bipartisan Budget Act (BBA) of 

2018. 

• Consolidated Appropriations Act 

(CAA) of 2023. 

B. Overall Impact 

We have examined the impacts of this 

proposed rule as required by Executive 

Order 12866 on Regulatory Planning 

and Review (September 30, 1993), 

Executive Order 13563 on Improving 

Regulation and Regulatory Review 

(January 18, 2011), Executive Order 

14094 entitled ‘‘Modernizing Regulatory 

Review’’ (April 6, 2023), the Regulatory 

Flexibility Act (RFA) (September 19, 

1980, Pub. L. 96–354), section 1102(b) of 

the Social Security Act, section 202 of 

the Unfunded Mandates Reform Act of 

1995 (March 22, 1995; Pub. L. 104–4), 

Executive Order 13132 on Federalism 

(August 4, 1999) and the Congressional 

Review Act (5 U.S.C. 804(2)). 

Executive Orders 12866 and 13563 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). The Executive Order 14094, 

entitled ‘‘Modernizing Regulatory 

Review’’ (hereinafter, the Modernizing 

E.O.), amends section 3(f)(1) of 

Executive Order 12866 (Regulatory 

Planning and Review). The amended 

section 3(f) of Executive Order 12866 

defines a ‘‘significant regulatory action’’ 

as an action that is likely to result in a 

rule: (1) having an annual effect on the 

economy of $200 million or more in any 

1 year, or adversely affecting in a 

material way the economy, a sector of 

the economy, productivity, competition, 

jobs, the environment, public health or 

safety, or State, local, territorial, or 

Tribal governments or communities; (2) 

creating a serious inconsistency or 

otherwise interfering with an action 

taken or planned by another agency; (3) 

materially altering the budgetary 

impacts of entitlement grants, user fees, 

or loan programs or the rights and 

obligations of recipients thereof; or (4) 

raising legal or policy issues for which 

centralized review would meaningfully 

further the President’s priorities or the 

principles set forth in this Executive 

order. 

A regulatory impact analysis (RIA) 

must be prepared for major rules with 

significant regulatory action/s and/or 

with significant effects as per section 

3(f)(1) ($200 million or more in any 1 

year). The total economic impact for this 

proposed rule exceeds $200 million in 

several years. Therefore, based on our 

estimates, OMB’s Office of Information 

and Regulatory Affairs has determined 

this rulemaking is significant per 

section 3(f)(1)) as measured by the $200 

million or more in any one year and also 

a major rule under Subtitle E of the 

Small Business Regulatory Enforcement 

Fairness Act of 1996 (also known as the 

Congressional Review Act). 

Accordingly, we have prepared a 

Regulatory Impact Analysis that to the 

best of our ability presents the costs and 

benefits of the rulemaking. 

Cost of reviewing the rule. Using the 

wage information from the BLS for 

medical and health service managers 

(Code 11–9111), we estimate that: 

• The hourly cost per reviewer for 

reviewing this proposed rule is $123.06 

per hour, including overhead and fringe 

benefits https://www.bls.gov/oes/ 

current/oes_nat.htm. Had a general 

business operations specialist been used 

(say for an entity without medical and 

health service managers) the cost per 

hour would be less than that for a 

medical and health services manager. 

Therefore, we are at most overestimating the cost per hour and will 

use $123.06/hr. 

• We estimate that there will be less 

than 2,000 reviewers of this proposed 

rule: There are currently less than 1,000 

contracts (which includes MA, MA–PD, 

and PDP contracts), 55 State Medicaid 

agencies, and 300 Medicaid MCOs. We 

also expect a variety of other 

organizations to review (for example, 

consumer advocacy groups, PBMs). We 

expect that each organization will 

designate one person to review the rule. 

Therefore, a reasonable maximal 

number is 2,000 total reviewers. We 

note that other assumptions are 

possible. 

• The rule is about 150,000 words. 

Average reading speeds vary from 180 to 

240 words per minute. Since the rule is 

technical and presumably notes are 

being taken, we use the lower estimate. 

Furthermore, since in addition to 

notetaking, summaries would be 

submitted to leadership we are lowering 

the 180 words/minutes to 150. 

Accordingly, we assume it would take 

staff 17 hours to review this proposed 

rule (150,000 words/150 words per 

minute/60 minutes hour). This may be 

an overestimate since each entity will 

likely only read the provisions affecting 

them and not the entire rule. 

• Therefore, the estimated cost per 

reviewing entity for reading this entire 

rule is $2,100 (17 hr × $123.06/hr), and 

the total cost over all entities for 

reviewing this entire proposed rule is 

$4.2 million ($2,100 × 2,000 reviewers). 

However, we expect that many 

reviewers, for example pharmaceutical 

companies and PBMs, will not review 

the entire rule but just the sections that 

are relevant to them. Thus, it is very 

likely that on average only half or a 

quarter of the rule will be read resulting 

in a range of $2 million to $5 million. 

Note that this analysis assumes one 

reader per contract. Some alternatives 

include assuming one reader per parent 

organization. Using parent organizations 

instead of contracts will reduce the 


ddrumheller on DSK120RN23PROD with PROPOSALS2
78606 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

number of reviewers. However, we 

believe it is likely that review will be 

performed by contract. The argument for 

this is that a parent organization might 

have local reviewers assessing potential 

region-specific effects from this 

proposed rule. 

In accordance with the provisions of 

Executive Order 12866, this proposed 

rule was reviewed by OMB. 

C. Impact on Small Businesses— 

Regulatory Flexibility Analysis (RFA) 

The RFA, as amended, requires 

agencies to analyze options for 

regulatory relief of small businesses if a 

rule has a significant impact on a 

substantial number of small entities. For 

purposes of the RFA, small entities 

include small businesses, nonprofit 

organizations, and small governmental 

jurisdictions. 

A wide range of policies are being 

proposed in this rule. These policies 

codify, modify, and update current 

guidance governing MA organization 

bid requirements. 

This rule has several affected 

stakeholders. They include: (1) MA 

organizations such as HMOs, local and 

regional PPOs, MSAs, PFFS and Part D 

sponsors; (2) providers, including 

institutional providers, outpatient 

providers, clinical laboratories, and 

pharmacies; and (3) enrollees. Some 

descriptive data on these stakeholders 

are provided in Table K–1. 

We are certifying that this proposed 

rule does not have a significant 

economic impact on a substantial 

number of small entities. To explain our 

position, we explain certain operational 

aspects of the Medicare program. 

Each year, MA plans submit a bid for 

furnishing Part A and B benefits and the 

entire bid amount is paid by the 

government to the plan if the plan’s bid 

is below an administratively set 

benchmark. If the plan’s bid exceeds 

that benchmark, the beneficiary pays the 

difference in the form of a basic 

premium (note that a small percentage 

of plans bid above the benchmark, 

whereby enrollees pay basic premium, 

thus this percentage of plans is not 

‘‘significant’’ as defined by the RFA and 

as justified in this section of this 

proposed rule). 

MA plans can also offer extra benefits, 

that is, benefits not covered under 

Traditional Medicare Parts A and B, 

called supplemental benefits. These 

benefits are paid for through enrollee 

premiums, rebate dollars or a 

combination. Under the statutory 

payment formula, if the bid submitted 

by a Medicare Advantage plan for 

furnishing Parts A and B benefits is 

lower than the administratively set 

benchmark, the government pays a 

portion of the difference to the plan in 

the form of a rebate. The rebate must be 

used to provide supplemental benefits 

(that is benefits not covered under 

Traditional Medicare, including lower 

cost sharing) and or/lower beneficiary 

Part B or Part D premiums. Some 

examples of these supplemental benefits 

include vision, dental, and hearing, 

fitness and worldwide coverage of 

emergency and urgently needed 

services. 

To the extent that the government’s 

payments to plans for the bid plus the 

rebate exceeds costs in Traditional 

Medicare, those additional payments 

put upward pressure on the Part B 

premium, which is paid by all Medicare 

beneficiaries, including those in 

Traditional Medicare who do not have 

the additional health services available 

in many MA plans. 

Part D plans, including MA–PD plans, 

submit bids and those amounts are paid 

to plans through a combination 

Medicare funds and beneficiary 

premiums. In addition, for enrolled lowincome beneficiaries, Part D plans 

receive special government payments to 

cover most of the premium and cost 

sharing amounts those beneficiaries 

would otherwise pay. 

Thus, the cost of providing services 

by MA and Part D plans is funded by 

a variety of government funding sources 

and in some cases by enrollee 

premiums. As a result, MA and Part D 

plans are not expected to incur burden 

or losses since the private companies’ 

costs are being supported by the 

government and enrolled beneficiaries. 

This lack of expected burden applies to 

both large and small health plans. 

Small entities that must comply with 

MA and Part D regulations, such as 

those in this proposed rule, are expected 

to include the costs of compliance in 

their bids, thus avoiding additional 

burden, since the cost of complying 

with any final rule is funded by 

payments from the government and, if 

applicable, enrollee premiums. 

For Direct Health and Medical 

Insurance Carriers, NAICS 524114, 

plans estimate their costs for the 

upcoming year and submit bids and 

proposed plan benefit packages. Upon 

approval, the plan commits to providing 

the proposed benefits, and CMS 

commits to paying the plan either (1) 

the full amount of the bid, if the bid is 

below the benchmark, which is a ceiling 

on bid payments annually calculated 

from Traditional Medicare data; or (2) 

the benchmark, if the bid amount is 

greater than the benchmark. 

If an MA plan bids above the 

benchmark, section 1854 of the Act 

requires the MA plan to charge enrollees 


ddrumheller on DSK120RN23PROD with PROPOSALS2EP15NO23.033</GPH>

TABLE K-1: STAKEHOLDERS AFFECTED BY THIS RULE, THEIR NAICS CODE, 

AND THRESHOLD FOR SMALL BUSINESS STATUS 

Threshold for Small Business 

Stakeholder NAICS Code* (in millions of dollars)** 

Pharmacy and Drug stores 456110 37.5 

Direct Health and Medical Insurance Carriers 524114 47 

Ambulatory Health Services 621 

Dialysis Centers 621492 47 

Physician offices 621111 16 

Hospitals 622 47 

Skilled Nursing Facilities 623110 34 
Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78607 

a premium for that amount. Historically, 

at most 2 percent of plans bid above the 

benchmark, and they contain roughly 1 

percent of all plan enrollees. The CMS 

threshold for what constitutes a 

substantial number of small entities for 

purposes of the RFA is 3 to 5 percent. 

Since the number of plans bidding 

above the benchmark is 2 percent, this 

is not considered substantial for 

purposes of the RFA. 

The preceding analysis only shows 

that MA plans, whether small or large, 

are not affected by this proposed rule 

since a significant number of them (all 

but at most 2 percent) will have their 

costs subsidized by the Government. 

Therefore, we next examine in detail 

each of the other stakeholders and 

explain how they can bear cost. Each of 

the following are providers (inpatient, 

outpatient, or pharmacy) that furnish 

plan-covered services to plan enrollees 

for: 

• Pharmacies and Drug Stores, NAICS 

446110; 

• Ambulatory Health Care Services, 

NAICS 621, including about two dozen 

sub-specialties, including Physician 

Offices, Dentists, Optometrists, Dialysis 

Centers, Medical Laboratories, 

Diagnostic Imaging Centers, and 

Dialysis Centers, NAICD 621492; 

• Hospitals, NAICS 622, including 

General Medical and Surgical Hospitals, 

Psychiatric and Substance Abuse 

Hospitals, and Specialty Hospitals; and 

• SNFs, NAICS 623110. 

Whether these providers are 

contracted or, in the case of PPOs and 

PFFS MA plans, not contracted with the 

MA plan, their aggregate payment for 

services is the sum of the enrollee cost 

sharing and plan payments. 

• For non-contracted providers, 

§ 422.214 and sections 1852(k)(1) and 

1866(a)(1)(O) of the Act require that a 

non-contracted provider that furnishes 

covered services to an MA enrollee 

accept payment that is at least what the 

provider would have been paid had the 

services been furnished to a Medicare 

FFS beneficiary. 

• For contracted providers, § 422.520 

requires that the payment is governed 

by a mutually agreed upon contract 

between the provider and the plan. CMS 

is prohibited from requiring MA plans 

to contract with a particular health care 

provider or to use a particular price 

structure for payment by section 

1854(a)(6)(B)(iii) of the Act. 

Consequently, for providers, there is 

no additional cost burden above the 

already existing burden in Traditional 

Medicare. In other words, the provisions 

of this proposed rule do not create a 

significant burden for providers. 

Based on the previous discussion, the 

Secretary certifies that this proposed 

rule will not have a significant impact 

on a substantial number of small 

entities. 

There are certain indirect 

consequences of these provisions which 

also create impact. We have already 

explained that at least 98 percent of the 

plans bid below the benchmark. Thus, 

their estimated costs for the coming year 

are fully paid by the Federal 

Government. However, the government 

additionally pays the plan an MA 

‘‘beneficiary rebate’’ amount that is an 

amount equal to a percentage (between 

50 and 70 percent depending on a plan’s 

quality rating) multiplied by the amount 

by which the benchmark exceeds the 

bid. The rebate is used to provide 

additional benefits to enrollees in the 

form of reduced cost-sharing or other 

supplemental benefits, or to lower the 

Part B or Part D premiums for enrollees. 

(Supplemental benefits may also be paid 

by enrollee premiums to the extent that 

the MA rebate is not sufficient to cover 

those costs.) However, as noted 

previously, the number of MA plans 

bidding above the benchmark to whom 

this burden applies does not meet the 

RFA criteria of a significant number of 

plans. 

It is possible that if the provisions of 

this proposed rule would otherwise 

cause MA plan bids to increase, plans 

will reduce their profit margins, rather 

than substantially change their benefit 

package. This may be in part due to 

market forces; a plan lowering 

supplemental benefits may lose its 

enrollees to competing plans that offer 

these supplemental benefits. Thus, it 

may, in certain cases, be advantageous 

for a plan to reduce profit margins, 

rather than reduce supplemental 

benefits. Most likely an increase in bids 

would result in a combination of 

reduction in supplemental benefits and 

reduction in profit margins (not 100 

percent one or the other). Part of the 

challenge in pinpointing the effects of 

an increase in bids is that there are 

many other factors combining with the 

effects of proposed and final rules, 

making it effectively impossible to 

determine whether a particular policy 

had a long-term effect on supplemental 

benefits. 

We also note that we do not have 

definitive data on this. Plans do not 

report to CMS the strategies behind their 

bids. More specifically, when plans do 

reduce supplemental benefits, we have 

no way of knowing the cause for this 

reduction, whether it be new provisions, 

market forces, or other causes. 

D. Anticipated Effects 

Many provisions of this proposed rule 

have negligible impact either because 

they are technical provisions, 

clarifications, or are provisions that 

codify existing guidance. Other 

provisions have an impact that cannot 

be quantified. Throughout the preamble, 

we have noted when we estimated that 

provisions have no impact either 

because they are codifying already 

existing practices, or, for example, 

because contractors for CMS have 

asserted that changes work within their 

current contract without the need for 

additional compensation. Additionally, 

this Regulatory Impact Statement 

discusses several provisions with either 

zero impact or impact that cannot be 

quantified. The remaining provisions’ 

effects are estimated in section XXX of 

this proposed rule and in this RIA. 

Where appropriate, when a group of 

provisions have both paperwork and 

non-paperwork impact, this Regulatory 

Impact Statement cross-references 

impacts from section XXX of this 

proposed rule in order to arrive at total 

impact. 

1. Effects of Expanding Permissible Data 

Use and Data Disclosure for MA 

Encounter Data (§ 422.310) 

In section III.H. of this proposed rule, 

we discussed two proposals to improve 

access to MA encounter data for certain 

purposes. We noted that our current 

regulatory language limits CMS’s ability 

to use and disclose MA encounter data 

for activities in support of 

administration or evaluation of the 

Medicaid program, including care 

coordination. Further, the regulation 

delays when CMS may share MA 

encounter data to State Medicaid 

agencies for care coordination and 

quality review and improvement 

activities for the Medicaid program, 

particularly with regard to dually 

eligible individuals. Our proposals to 

improve access to MA data include the 

following: 

• Adding ‘‘and Medicaid programs’’ 

to the current MA risk adjustment data 

use purposes codified at 

§ 422.310(f)(1)(vi) and (vii). 

• Adding a new § 422.310(f)(3)(v) to 

allow for risk adjustment data to be 

released prior to reconciliation if the 

data will be released to State Medicaid 

agencies for the purpose of coordinating 

care for dually eligible individuals. 

Together, these proposals aim to 

clarify and broaden the allowable data 

uses for CMS and external entities (for 

data disclosed in accordance with 

§ 422.310(f)(2) and (3)). These proposals 

do not change the external entities 


ddrumheller on DSK120RN23PROD with PROPOSALS2
78608 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

allowed to request MA encounter data 

from CMS. 

As discussed in sections X and III.H., 

these proposed provisions would allow 

external entities to voluntarily request 

MA encounter data for allowable data 

uses to support the Medicare program, 

Medicaid program, and Medicare and 

Medicaid combined purposes. There is 

one area where this provision could 

impact the burden to CMS: CMS 

reviewing and fulfilling new MA 

encounter data requests. However, in 

the FY 2015 2015 Hospital Inpatient 

Prospective Payment System (IPPS)/ 

Long-term Care Hospital Prospective 

Payment System (LTCH PPS) final rule, 

when we initially established CMS 

disclosure of MA encounter data, we 

explained that we had determined that 

‘‘there are not any economically 

significant effects of the proposed 

provisions’’ (79 FR 50445). The same 

applies for the proposed refinements to 

the approved data uses and the data 

disclosure in this proposed rule. 

2. Increasing the Percentage of Dually 

Eligible Managed Care Enrollees Who 

Receive Medicare and Medicaid 

Services From the Same Organization 

(§§ 422.503, 422.504, 422.514, 422.530, 

and 423.38) 

We discussed collection of 

information burden associated with this 

provision in section X.B.11 of this 

proposed rule. In this section, we 

describe the impacts of our proposed 

change to the dual/LIS SEP, new 

integrated care SEP, and contract 

limitations for non-integrated MA–PD 

plans. 

These proposals would impact dually 

eligible and other LIS eligible 

individuals that currently use the 

quarterly dual/LIS SEP to change their 

enrollment in MA–PD plans. We are 

proposing to change the quarterly dual/ 

LIS SEP to a one-time-per month SEP 

for dually eligible individuals and other 

LIS eligible individuals to elect a 

standalone PDP. The proposal would 

allow individuals to switch PDPs or 

leave their MA–PD plans for Traditional 

Medicare (with a standalone PDP) in 

any month. The proposed dual/LIS SEP 

would no longer permit enrollment into 

MA–PD plans or changes between MA– 

PD plans (although such options would 

remain available through other 

enrollment periods and SEPs). In 

addition, we propose a new integrated 

care SEP that would allow enrollment in 

any month into a FIDE SNP, HIDE SNP, 

or AIP for dually eligible individuals 

who meet the qualifications of such 

plans. 

Proposed §§ 422.504(a)(20) and 

422.514(h) would establish a new 

requirement for an MA organization, 

that, beginning in plan year 2027, when 

an MA organization, its parent 

organization, or an entity that shares a 

corporate parent organization with the 

MA organization, also contracts with a 

State as a Medicaid MCO that enrolls 

dually eligible individuals in the same 

service area, that the MA organization’s 

D–SNPs must limit new enrollment to 

individuals enrolled in (or in the 

process of enrolling in) the D–SNP’s 

aligned Medicaid MCO. Additionally, 

an MA organization (or its parent 

organization or another MA 

organization with the same parent 

organization) in this situation would 

only be able to offer one D–SNP for fullbenefit dually eligible individuals in the 

same service area as that MA 

organization’s affiliated Medicaid MCO 

(with limited exceptions as described in 

section VIII.C. of this proposed rule). 

Further, beginning in plan year 2030, 

such D–SNPs must only enroll (or 

continue to enroll) individuals enrolled 

in (or in the process of enrolling in) the 

affiliated Medicaid MCO. 

Full-benefit dually eligible 

individuals enrolled in a D–SNP that 

consolidate due to our proposals at 

§§ 422.504(a)(20) and 422.514(h) would 

be moved into a new plan. The 

impacted enrollees would receive 

materials about the plan consolidation 

and materials associated with the new 

plan. We believe the plan benefit 

packages of the plans required to 

consolidate to be similar if not the same 

and do not expect impact to enrollees. 

We expect there to be an enrollment 

shift from MA–PDs into FIDE SNPs, 

HIDE SNPs, or AIPs over time as more 

D–SNPs align with Medicaid MCOs. 

Starting in plan year 2027, we expect 

new D–SNP enrollment to be limited 

and then we expect integrated D–SNP 

enrollment to accelerate in 2030 when 

D–SNPs under a parent organization 

with an affiliated Medicaid MCO would 

need to disenroll individuals who are 

not enrolled in both the D–SNP and 

affiliated MCO. 

We examined contract year 2023 bid 

data for D–SNPs that enroll beneficiaries 

in States that also use Medicaid 

managed care to cover some or all 

benefits for dually eligible individuals. 

In general, the data shows that the more 

integrated D–SNPs have higher per 

capita MA rebates than those in less 

integrated plans. MA rebates are used to 

reduce beneficiary cost sharing, lower 

beneficiary premiums, and provide 

additional supplemental benefits. MA 

rebates are calculated by multiplying 

the difference in the risk-adjusted 

benchmarks and the risk-adjusted bids 

by a percentage called the rebate 

percentage. The Federal Government 

retains the complement of the rebate 

percentage (or 1¥rebate percentage) 

multiplied by the difference in the riskadjusted benchmarks and bids. The 

(risk-adjusted) bid-to-benchmark ratios, 

in general, are smaller for the more 

integrated plans versus the less 

integrated plans. This suggests that the 

more integrated D–SNPs can provide 

Traditional Medicare benefits 

(represented by the risk adjusted bid) at 

a lower or more efficient level than the 

less integrated D–SNPs. We have 

assumed that this provision’s 

requirement for greater alignment 

between the D–SNP and the affiliated 

Medicaid MCO will lead to greater 

health benefit efficiencies and incur 

Federal Government savings since the 

Federal Government retains the 

complement of the difference between 

the submitted risk adjusted bids and 

benchmarks. 

In calculating our estimates, we 

assumed savings would begin in 2027 

when new D–SNPs enrollment would be 

limited. We expect integrated D–SNP 

enrollment and related savings to 

accelerate in 2030 when D–SNPs under 

a parent organization participating in 

Medicaid managed care would need to 

disenroll individuals who are not 

enrolled in both the D–SNP and 

affiliated Medicaid MCO under the 

same parent organization. We estimated 

that the other elements of this proposal 

(including the proposed changes to the 

SEP) would have a negligible impact. 

To develop the savings projections, 

we calculated the bid-to-benchmark 

ratios for the integrated D–SNPs based 

on the calendar year 2023 plan data and 

applied them to the coordination-only 

D–SNPs that we assume would convert 

to aligned D–SNPs by 2030. We 

assumed that a large percentage of the 

coordination-only D–SNP enrollment 

would convert to integrated D–SNPs by 

2030. For trending purposes, we used 

2023 bid data and 2023 enrollment data 

as the starting point and trended those 

data points by values found in the 2023 

Medicare Trustees Report. We 

calculated gross costs (savings are 

represented by negative dollar amounts) 

by multiplying the per member per 

month expenditure differences by the 

enrollment that is projected to switch to 

aligned plans. Then, we calculated the 

net cost by multiplying the gross costs 

by the net of Part B premium amount 

which averages between 85.1 percent 

and 84.6 percent from 2025–2034. This 

yields an overall annual estimate of net 

Part C costs ranging from ¥$6 million 

in contract year 2027 to ¥$207 million 

in contract year 2034. 


ddrumheller on DSK120RN23PROD with PROPOSALS2
Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78609 

We performed a similar comparison of 

contract year 2023 bids for Part D on the 

same MA plans and their associated 

population. The data also suggests that 

the more integrated D–SNPs had lower 

combined bid and reinsurance amounts 

for contract year 2023. As a result, we 

also projected that there would be 

efficiencies when D–SNPs aligned more 

with the Medicaid MCOs. The observed 

2023 difference (efficiency) in the 

combined bid and reinsurance amounts 

is projected with the corresponding D– 

SNP trend assumed in the 2023 

Medicare Trustees’ Report (not shown 

in that report). The Part D gross savings 

are the product of the efficiency and the 

associated switchers from Table K–3. 

Since the premiums for the Medicaid 

beneficiaries are subsidized, there 

would be no premium offset. As a 

result, the net savings would be the 

same as the gross savings. We estimated 

the net costs would range from ¥$7 

million in contract year 2027 to ¥$286 

million in contract year 2034. 

We also have reviewed the impact to 

the Medicaid program and have 

concluded that the Medicaid impacts 

would be negligible. The majority of 

States have a ‘‘lesser-of’’ policy, under 

which the State caps its payment of 

Medicare cost sharing so that the sum of 

Medicare payment and cost-sharing 

does not exceed the Medicaid rate for a 

particular service. Under this proposed 

policy, the Medicare payment and the 

cost sharing are not expected to increase 

resulting in non-significant impacts to 

Medicaid payments. For Part D, given 

that the Medicaid liability is limited to 

the beneficiary cost sharing and that the 

vast majority of dually eligible 

individuals qualify for low-income cost 

sharing, we anticipate no significant 

impacts to Medicaid costs. 

In addition to the estimated savings 

from limiting enrollment into certain D– 

SNPs starting in plan year 2027, these 

provisions require updates to a variety 

of CMS manual systems. 

The proposed change to § 423.38(c)(4) 

and the proposed provision at 

§ 423.38(c)(35) would create burden for 

CMS to update MA–PD plan manual 

chapters, the plan communication user 

guide (PCUG), and model enrollment 

notices. Additionally, the MARx system 

would require coding changes for the 

proposed amended dual/LIS SEP at 

§ 423.38(c)(4) and proposed integrated 

care SEP at § 423.38(c)(35). The CMS 

call center 1–800–MEDICARE would 

need training on the proposed SEPs to 

be able to identify beneficiaries eligible 

for the SEPs. The updates and changes 

would require two GS–13 staff 20 hours 

to complete the necessary updates. We 

estimate the burden for plan year 2025, 

would be at 40 hours (2 GS–13 * 20 hrs) 

at a cost of $2,433 (40 hrs * $60.83) for 

two GS–13 staff to update manual 

chapters, the PCUG, enrollment notices, 

and complete coding for MARx. This is 

a one-time cost that would not create 

new burden in subsequent years. 

The new provision at 

§ 422.514(h)(3)(ii) would allow plans to 

continue operating a PPO and HMO in 

the same service area but not allow new 

enrollments of full-benefit dually 

eligible individuals into the plan (or 

plans) that are not aligned with the 

affiliated MCO as described 

§ 422.514(h)(1). This provision would 

not create new burden for CMS since 

CMS would use its existing process to 

suppress these plans from Medicare 

Plan Finder. 

The new provision at 

§ 422.530(c)(4)(iii) allowing a crosswalk 

exception for plans consolidating their 

D–SNPs would create burden for CMS. 

The coding to create the crosswalk 

exception would require one GS–13 10 

hours to complete the necessary 

updates. The burden for plan year 2025, 

is estimated at 10 hours (1 GS–13 * 10 

hrs) at a cost of $608.30 (10 hrs * 

$60.83) for a GS–13 to complete coding 

for crosswalk exceptions. This is a onetime cost that would not create new 

burden in subsequent years. The burden 


ddrumheller on DSK120RN23PROD with PROPOSALS2EP15NO23.034</GPH> EP15NO23.035</GPH>

TABLE K-2: ESTIMATED PART C COSTS (SAVINGS) PER YEAR($ 

MILLIONS) TO THE MEDICARE TRUST FUND FOR PROPOSALS TO INCREASE 

THE PERCENTAGE OF DUALLY ELIGIBLE MANAGED CARE ENROLLEES WHO 

RECEIVE l\iIEDICARE AND MEDICAID SERVICES FROM THE SAME 

ORGANIZATION 

Contmct Yea,· 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 

BID+ RF.BATE P~IPM Difference - - (13.10) (13.16) (13.02) (12.89) (12.93) (13.04) (13.92) (14.51) 

PROJECTED CO D-SNP 

Enrollment Switchers to Aligned - - 41.578 81,567 119,630 1,303,863 1,334.476 1,361,197 1,385,109 1,405,6% 

Medicare and Medicaid MCOs 

Gross Cost ($ millions): - - (7) (13) (19) (202) (207) (213) (231) (245) 

Net of Part B Premilllll: 85.1% 85.0% 84.9% 84.8% 84.8% 84.7% 84.7'':i, 84.6% 84.6% 84.6% 

Net Cost($ millions): - - (6) (11) (16) (171) (175) (180) (196) (207) 

TABLE K-3: ESTIMATED PART D COSTS (SA VTNGS) PER YEAR($ MILLIONS) TO 

THE MEDICARE TRUST FUND FOR PROPOSALS TO INCREASE THE 

PERCENTAGE OF DUALLY ELIGIBLE MANAGED CARE ENROLLEES WHO 

RECEIVE MEDICARE AND MEDICAID SERVICES FROM THE SAME 

ORGANIZATION 

Contract Year 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 

BID+ REINSURANCE (14.09) (14.25) (14.67) (15.00) (15.30) (15.87) (16.47) (16.97) PMPM Difference - -

Gross Cost ($millions): - - (7) (14) (21) (235) (245) (259) (274) (286) 

Net Part D Premium: 0 0 0 0 0 0 0 0 0 0 

Net Cost($ millions): - - (7) (14) (21) (235) (245) (259) (274) (286) 

Total 

(1.136) 

(%1) 

Total 

(1 341) 

0 

(1,341) 
78610 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

204Billingsly A. Is There a Biosimilar for Humira? 

Yes, Here Are 9 Humira Biosimilars Launching in 

2023. GoodRxHealth. July 12, 2023. Available from: 

https://www.goodrx.com/humira/biosimilars. 

205https://www.cdc.gov/chronicdisease/ 

resources/infographic/physical-activity.htm#. 

associated with crosswalks and plan 

consolidation could create additional 

burden such as breaking plans into 

different PBPs or having fewer PBPs to 

manage in the future. We cannot 

estimate these actions and associated 

burden but generally believe they would 

cancel each other out. 

3. Effects of Additional Changes to an 

Approved Formulary—Biosimilar 

Biological Product Maintenance 

Changes and Timing of Substitutions 

(§§ 423.4, 423.100, and 423.120(e)(2)) 

We do not estimate any impact on the 

Medicare Trust Fund as a result of the 

proposal to treat substitutions of 

biosimilar biological products other 

than interchangeable biological 

products as a maintenance change. New 

biosimilar biological products are 

approved or licensed by the FDA and 

become available on the market at 

irregular intervals. Therefore, with 

respect to this provision, we cannot 

predict when new biosimilar biological 

products will enter the market or to 

what extent Part D sponsors will make 

formulary substitutions as a result. 

Several biosimilar biological products 

entered the market in 2023,204 but CMS 

has not seen a corresponding influx of 

non-maintenance negative change 

requests from Part D sponsors. It is 

unclear whether Part D sponsors are not 

requesting midyear formulary changes 

due to concerns about patient and 

provider hesitancy towards biosimilar 

biological products, or if the current 

policy that treats such formulary 

changes as non-maintenance changes 

disincentivizes Part D sponsors from 

making midyear formulary changes that 

will not apply to all enrollees currently 

taking the reference product. The 

introduction of biosimilar biological 

products to the market is relatively 

recent compared to generic small 

molecule drugs. We believe there is a 

potential for savings to the Medicare 

Trust Fund in the long term as 

acceptance of biosimilar biological 

products grows and increased 

competition drives down costs; 

however, a number cannot be estimated 

right now. 

4. Mid-Year Notice of Unused 

Supplemental Benefits 

This proposal would require plans to 

notify enrollees about any supplemental 

benefit they have not used during the 

first half-year of the contract year. We 

lack data to quantify the effects of this 

provision. Therefore, we present a 

qualitative analysis below. The 

provision has 3 impacts on plans and 

the MA program. 

One impact is the burden to plans to 

notify enrollees. This burden has been 

quantified in the Collection of 

Information in section X. of this 

proposed rule. The burden consists of: 

(1) a system update to identify 

supplemental benefits not utilized by 

enrollees; and (2) the burden to notify 

enrollees. 

The second impact relates to the 

intent of the provision, which is to 

increase utilization of benefits when 

appropriate. This would initially 

involve a cost to both enrollees for their 

share of cost sharing, and to the plans 

for providing the benefit. In assessing 

the impact, there are several dimensions 

of impact for which we lack data: (1) 

how many plans offer these 

supplemental benefits; (2) which 

supplemental benefits are not being 

utilized at all by some enrollees; (3) for 

each plan offering supplemental 

benefits, how many enrollees do and do 

not utilize these benefits; (4) how many 

more enrollees would utilize these 

benefits as a result of the notification; 

and (5) what is the range and 

distribution of the cost to provide these 

supplemental benefits. 

The third impact relates to savings 

expected from increased utilization. 

Normally, such savings are considered 

consequences of a provision and not 

typically analyzed in an RIA. We use 

dental and gym benefits to show several 

complications and possibilities in this 

analysis. 

Enrollees who use their preventive 

supplemental dental benefits may 

uncover problems early, thus preventing 

unnecessary complications. For 

example, the filling of cavities may 

prevent a costlier root canal later. Also 

note that the filling may happen in one 

plan while the costlier root canal that 

was prevented refers to a possible event 

several years later possibly in another 

plan (or out of pocket for the enrollee). 

An interesting subtlety of this 

example is that enrollees who have 

preventive dental checkups may do so 

annually or semi-annually. The effect of 

the notification might be to increase 

annual checkups to semi-annual 

checkups. It is harder to quantify the 

savings from such a change in 

frequency. 

From discussions with plans, we 

know that enrollees may incur the cost 

of a gym membership benefit without 

utilizing it. The intent of the provision 

would be to increase gym utilization. In 

the case of gym benefits the savings 

from increased prevention is 

challenging to analyze since different 

frequencies of gym attendance have 

different effects on health. An enrollee, 

for example, who decides to visit the 

gym only once because of the 

notification might not have any 

significant health benefits generating 

savings; even enrollees who switch to 

monthly visits may not experience 

savings. The savings on enrollees who 

decide to continue gym visit on a 

regular basis might arise from varied 

consequences since increased exercise 

has the potential to ‘‘reduce risk of 

chronic conditions like obesity, type 2 

diabetes, heart disease, many types of 

cancer, depression and anxiety, and 

dementia.’’ 205

In summary, this is the type of 

provision that has a savings impact that 

can be analyzed only after several years 

of experience with the provision. 

We solicit public comment on the 

economic cost and benefits of this 

proposal. 

5. Agent Broker Compensation 

(§ 422.2274) 

In this rule we are proposing to: (1) 

generally prohibit contract terms 

between MA organizations and agents, 

brokers, or other TMPOs that may 

interfere with the agent’s or broker’s 

ability to objectively assess and 

recommend the plan which best fits a 

beneficiary’s health care needs; (2) set a 

single agent and broker compensation 

rate for all plans, while revising the 

scope of what is considered 

‘‘compensation;’’ and (3) eliminate the 

regulatory framework which currently 

allows for separate payment to agents 

and brokers for administrative services. 

We are also proposing to make 

conforming edits to the agent broker 

compensation rules at § 423.2274. 

The proposed changes to the MA and 

Part D agent broker compensation 

regulations at 42 CFR 422.2274 and 

423.2274 have potential economic 

effects on agents/brokers, plans, and 

Medicare beneficiaries. Since we lack 

the data to quantify these effects, we 

discuss them qualitatively. Agents and 

brokers may lose certain excess 

payments that would be prohibited 

under the proposed regulation; on the 

other hand, they would receive an 

increased FMV calculation for 

compensation per enrollment. A typical 

agent or broker might work on behalf of 

many insurance companies and their 

associated plans, including commercial, 

Medicare, Medicaid, Medigap etc. A 

reduction in net payment for Medicare 

Advantage enrollments may cause 


ddrumheller on DSK120RN23PROD with PROPOSALS2
Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78611 

agents or brokers to reapportion their 

time and focus instead on other areas of 

the industry, resulting in decreased MA 

plan enrollment; however, we believe 

this impact would swiftly be offset by 

increased marketing and other 

adjustments made by the MA plans, as 

discussed below. 

Another effect on agents and brokers 

from this provision is the requirement of 

uniform payment to agents and brokers 

and the resulting increased 

transparency. More specifically, agents 

and brokers who might have been 

receiving excess payments for targeting 

certain plans will no longer be 

financially incentivized to target these 

plans resulting in a more equitable 

distribution of efforts. 

Plans are already spending a standard 

amount of $601 per new enrollee on 

agents and brokers. We do not believe 

the increased compensations of $31 

extra (about a 5 percent increase) per 

agent per enrollee would have any 

significant financial impact on plans 

given the proposal to prohibit excess 

payments in the form of administrative 

payments. 

On the other hand, if some agents and 

brokers withdraw or lower efforts for 

Medicare Advantage and Part D plans, 

resulting in possibly lower enrollment, 

plans may increase money allocated to 

outreach and advertising. Overall, we do 

not expect a decrease in enrollment 

because of the agent and broker 

compensation provisions since plans 

meticulously monitor enrollment trends 

and possess a variety of vehicles to 

counteract any significant changes. 

Indeed, in assessing the impact of the 

agent broker compensation provision it 

is important to emphasize that people 

join plans because of outreach from a 

wide variety of sources and therefore no 

single source is critical. 

We solicit public comment on the 

economic cost and benefits of this 

proposal. 

6. Enhancing Enrollees’ Right To Appeal 

an MA Plan’s Decision To Terminate 

Coverage for Non-Hospital Provider 

Services (§ 422.626) 

In § 422.626, we are proposing to (1) 

require the QIO instead of the MA plan, 

to review untimely fast-track appeals of 

an MA plan’s decision to terminate 

services in an HHA, CORF, or SNF; and 

(2) fully eliminate the provision 

requiring the forfeiture of an enrollee’s 

right to appeal a termination of services 

decision when they leave the facility or 

end home health, CORF, or home-based 

hospice services before the proposed 

terminate date. 

Currently, there is no data collected 

on the volume of fast-track appeals 

conducted by MA plans for untimely 

requests. The QIO conducts appeals for 

FFS fast-track appeals for untimely 

requests but does not formally collect 

data on appeals based on untimely 

requests from MA enrollees. Thus, the 

following estimates are speculative 

given the lack of precise data on the 

number of the fast-track appeals for 

untimely FFS requests. 

Anecdotal data from the QIOs 

conducting these fast-track appeals 

indicates that approximately 2.5 percent 

of all fee-for-service (FFS) fast-track 

appeal requests are untimely. In CY 

2021 (most recent year available), there 

were 190,031 MA fast-track appeals to 

the QIO. Thus, we estimate that 

approximately 4,751 fast track appeals 

will be shifted from MA plans to the 

QIO (0.025 × 190,031). 

The shift of these untimely appeals 

from the QIOs to the MA plans will 

result in an increased burden. There is 

an estimated per case cost for QIOs to 

conduct these appeals (per the Financial 

Information and Vouchering System 

(FIVS) from 5/1/2019–7/31/2023), while 

MA plans are not specifically 

reimbursed for this activity. The average 

QIO appeal of this type takes 1.69 hours 

at $85.18/hr. 

In aggregate we estimate an annual 

burden of 8,029 hours (4,751 responses 

* 1.69 hr/response) at a cost of $683,910 

(8,029 hr × $85.18/hr). 

We are unable to estimate how many 

new QIO reviews will be conducted 

under the proposed provision at 

§ 422.626(a)(3) to eliminate the 

provision requiring the forfeiture of an 

enrollee’s right to appeal a termination 

of services decision when they leave the 

skilled nursing facility or end home 

health, CORF, or home-based hospice 

services before the proposed 

termination date. No entity tracks how 

many appeals are not conducted 

because the enrollee stopped the 

services at issue before the last day of 

coverage. Further, because this 

provision has never existed for FFS, we 

have no basis from which to derive an 

estimate. 

E. Alternatives Considered 

In this section, CMS includes 

discussions of alternatives considered. 

Several provisions of this proposed rule 

reflect a codification of existing policy 

where we have evidence, as discussed 

in the appropriate preamble sections, 

that the codification of this existing 

policy would not affect compliance. In 

such cases, the preamble typically 

discusses the effectiveness metrics of 

these provisions for public health. Also, 

in these cases, traditional categories of 

alternative analysis such as different 

compliance dates, different enforcement 

methods, different levels of stringency, 

as outlined in section C of OMB’s 

Circular A–4, are not fully relevant 

since the provision is already being 

complied with adequately. 

Consequently, alternative analysis is not 

provided for these provisions. 

1. Contracting Standards for Dual 

Eligible Special Needs Plan Look-Alikes 

(§ 422.514) 

We are proposing to lower the 

threshold for D–SNP look-alikes from 80 

percent to 60 percent over a 2-year 

period. We considered an alternative 

proposal to lower the D–SNP look-alike 

threshold to 60 percent in 1 year, 

allowing an earlier phase-out of these 

non-SNP MA plans. But we are 

proposing the more incremental 

approach to minimize disruptions to 

dually eligible individuals and allow 

plans and CMS more time to 

operationalize these transitions. 

We are considering and soliciting 

comment on an alternative to our 

proposal that would eliminate the 

proposed 70 percent threshold for plan 

year 2025 but would involve additional 

conditions and changes related to the 

transition authority. Specifically, this 

alternative would— 

• Apply the 60 percent threshold 

beginning in plan year 2026; 

• Permit use of the transition 

authority into non-SNP MA plans (as 

currently permitted under § 422.514(e)) 

for plan year 2025; and 

• Limit use of transition authority 

under § 422.514(e) to transition D–SNP 

look-alike enrollees into D–SNPs for 

plan year 2026 and subsequent plan 

years. 

Relative to our proposal, this 

alternative would give plans with dually 

eligible individual enrollment between 

70 and 80 percent of total enrollment 

based on January 2024 enrollment data 

one additional year to apply for a new 

D–SNP or service area expansion to an 

existing D–SNP, such that these plans 

could transition enrollees into a D–SNP 

for plan year 2026. The alternative 

would balance the additional year using 

the existing 80 percent enrollment 

threshold to identify prohibited D–SNP 

look-alikes with an earlier limitation on 

the § 422.514(e) transition authority to 

enrollees transitioning into non-SNPs. 

We solicit comment on whether this 

alternative is a better balance of the 

goals of our policy to prohibit 

circumvention of the requirements for 

D–SNPs and to encourage and 

incentivize enrollment in integrated 

care plans. 

Among the factors we would consider 

in adopting the alternative instead of 


ddrumheller on DSK120RN23PROD with PROPOSALS2
78612 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

our proposal is the extent to which 

plans with 70 percent or more dually 

eligible enrollment in plan year 2024 

expect to be able to establish a D–SNP 

in the same service area as the D–SNP 

look-alike if given an additional year 

(that is, 2026) to transition enrollees. 

Based on 2023 plan year data, 

approximately two-thirds of the MA 

organizations with non-SNP MA plans 

with between 70 and 80 percent dually 

eligible individuals already have a D– 

SNP under the same MA organization 

with the vast majority of those D–SNPs 

having a service area that covers the 

service area as the non-SNP MA plan. 

The other approximately one-third of 

the MA organizations with non-SNP MA 

plans with between 70 and 80 percent 

dually eligible individuals do not have 

a D–SNP in the same service area in 

plan year 2023. If given an additional 

year, these MA organizations would 

have more time in which to establish 

D–SNPs in the same service areas as 

non-SNP MA plans and transition the 

enrollees into a D–SNP. 

F. Accounting Statement and Table 

As required by OMB Circular A–4 

(available at https://

obamawhitehouse.archives.gov/omb/ 

circulars_a004_a-4/) in Table K–4, we 

have prepared an accounting statement 

showing the costs and transfers 

associated with the provisions of this 

proposed rule for calendar years 2025 

through 2034. Table K4 is based on 

Tables K–5a and Table K5-b which list 

savings and costs by provision and year. 

Tables K4, K5a and K5b with costs 

listed as positive numbers and savings 

listed as positive numbers. As can be 

seen, the net annualized savings of this 

proposed rule is between $150 and $200 

million per year. The net savings reflect 

a mixture of several provisions that save 

and cost. Minor seeming discrepancies 

in totals in Tables K4, K5a, and K5b 

reflect use of underlying spreadsheets, 

rather than intermediate rounded 

amounts. A breakdown of these costs of 

this proposed rule by provision may be 

found in Tables K5a and K5b. 

The following Tables K5a and K5b 

summarize costs, and savings by 

provision and year, and forms a basis for 

the accounting Table K4. In Tables K5a 

and K5b, costs and savings are 

expressed as positive numbers (except 

in the row with header ‘‘Aggregate 

savings’’ where positive numbers reflect 

savings and negative numbers reflect 

cost). The provisions increasing 

enrollment for D–SNPS Part C and Part 

D—effect the Medicare Trust Fund. In 

these rows, positive numbers reflect 

reduced dollar spending to the Trust 

Fund, that is savings. The savings (and 

costs) in these tables are true costs and 

savings reflecting increases or decreases 

in consumption of services and goods. 

Tables K5a and K5b combine related 

provisions. For example, all provisions 

related to the utilization management 

committee in the COI summary table are 

combined into one-line item in the RIA. 

BILLING CODE 4120–01–P 


ddrumheller on DSK120RN23PROD with PROPOSALS2EP15NO23.036</GPH>

TABLE K4: ACCOUNTING TABLE ($ MILLIONS)* 

Item Annualized at Annualized Period Who is affected 3% at7% 

Net Annualized MA Organizations, Part D Sponsors, 

Monetized Savings 176.3 155.0 CYs 2025-2034 Contractors for the Federal Government, 

MA Enrollees Agents and Brokers, 

Annualized MA Organizations, Part D Sponsors, 

Monetized Savings 216.5 195.2 CYs 2025-2034 Contractors for the Federal Government, 

MA Enrollees, Agents and Brokers, 

Annualized MA Organizations, Part D Sponsors, 

Monetized Cost 40.2 40.2 CYs 2025-2034 Contractors for the Federal Government, 

MA Enrollees, Agents and Brokers, .. * The savmgs and cost are expressed with positive numbers. For example, at 3%, this proposed rule armually saves 

$216.5 million but costs $40.2 million resulting in a net savings of $176.3 million. 

EP15NO23.004</GPH>ddrumheller on DSK120RN23PROD with PROPOSALS2

TABLE K5a: SA VIN GS AND COSTS (millions $) BY PROVISION AND YEAR (Y

2025 2025 2025 2026 2026 2026 2027 2027 2028 

Savin!!S Costs Transfers Savin!!S Costs Transfers Savin!!S Costs Savin!!S 

Total Savings 3.0 3.0 15.6 27.9 

Total Costs 41.8 39.9 39.9 

Aggregate Total (38.7) (36.9) (24.3) (12.0) 

Savings of the Medicare Trust Fnnd 

Increased enrollment in U-SNPs, Part C 5.5 10.9 

Increased enrollment in D-SNPs, Part D 7.0 13.9 

Increased enrollment in D-SNPs, Paverwork 0.2 - - 

Dlv!P 3.0 3.0 3.0 3.0 

SSBCI 7.0 6.8 6.8 

Increased Utilization of Supplementary Benefits 1.8 1.4 1.4 

Ulvl Committee 0.9 

Enhanced Appeal Rights 0.7 0.7 0.7 

Agent Broker 31.0 31.0 31.0 

D-SNP Look-Alikes 0.1 0.1 0.1 

Notice of Availability 0.1 

*Table K5a is continued in Table K5b. 
BILLING CODE 4120–01–C 


EP15NO23.005</GPH>ddrumheller on DSK120RN23PROD with PROPOSALS2

TABLE K5b: SAVINGS AND COSTS (millions$) BY PROVISION AND YEAR (YEARS 203

2030 2030 2031 2031 2032 2032 2033 2033 

Savin!!S Costs Savin!!S Costs Savin!!S Costs Savin!!S Costs S

Total Savings 408.7 423.4 442.5 472.4 

Total Costs 39.9 39.9 39.9 39.9 

Aggregate Total 368.7 383.5 402.5 432.5 

Savings of the Medicare Trust Fund 

Increased Enrollment in D-S"\/Ps, Part C 170.8 175.3 180.3 195.7 

Increased Enrollment in D-S"\/Ps, Part D 234.8 245.0 259.2 273.7 Increased Enrollment in D-SNPs, Panerwork - - - - 

DMP 3.0 3.0 3.0 3.0 

SSBCI 6.8 6.8 6.8 6.8 

Increased Utilization of SuppJementarv Benefits 1.4 1.4 1.4 1.4 

UM Committee 

Enhanced Appeal Rights 0.7 0.7 0.7 0.7 

Agent Broker 31.0 31.0 31.0 31.0 

D-SNP Look-Alikes 0.1 0.1 0.1 0.1 

Notice of Availabilitv 

*Continued from Table K5a. 

NOTES: 

I. Except for the row with "aggregate total", positive numbers in the cost colunms reflect costs while positive numbers in the savings colurun reflect savings. The agg

from the savings and therefore lists the difference as a negative number when the aggregate effect is a cost and as a positive when it is a savings. 

2. Two of the line items effect the Trust Fund "Increased Enrollment in D-SNPs, Part C", and "Increased Enrollment in D-SNPs, Part D". Over 10 years they save, $9

3. When the aggregate ofline items for a provision is below $50,000, for example the paperwork burden of$4,929 associated with the provision for network adequacCMS staff to perform certain tasks listed in this section, they were not included in the table (since they do not have an effect on numbers). However, when the aggreat least $0.1 million it was included. 
Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 78615 

G. Conclusion 

In aggregate this proposed rule saves 

significantly. Two provisions reduce 

spending by the Medicare Trust Fund: 

(1) the effect on Part C plans from the 

provisions designed to increase 

enrollment D–SNPs; and (2) the effect 

on Part D plans from these D–SNP 

provisions. Over a 10-year period they 

reduce spending of the Medicare Trust 

Fund of $28, $961, and $1,341 million 

respectively. The provisions for the 

Drug Management Program should 

reduce paperwork burden by $3 million 

annually saving $30 million over 10 

years. The agent broker provision is 

expected to cost $31 million and $310 

million over 10 years. 

XII. Response to Comments 

Because of the large number of public 

comments that we normally receive on 

Federal Register documents, we are not 

able to acknowledge or respond to them 

individually. We will consider all 

comments we receive by the date and 

time specified in the DATES section of 

this preamble, and, when we proceed 

with a subsequent document, we will 

respond to the comments in the 

preamble to that document. In 

accordance with requirements this 

major rule has been reviewed by OMB. 

Chiquita Brooks-LaSure, 

Administrator of the Centers for 

Medicare & Medicaid Services, 

approved this document on October 24, 

2023. 

List of Subjects 

42 CFR Part 417 

Administrative practice and 

procedure, Grant programs-health, 

Health care, Health Insurance, Health 

maintenance organizations (HMO), Loan 

programs-health Medicare, Reporting 

and recordkeeping requirements. 

42 CFR Part 422 

Administrative practice and 

procedure, Health facilities, Health 

maintenance organizations (HMO), 

Medicare, Penalties, Privacy, Reporting 

and recordkeeping requirements. 

42 CFR Part 423 

Administrative practice and 

procedure, Health facilities, Health 

maintenance organizations (HMO), 

Incorporation by reference, Medicare, 

Penalties, Privacy, Reporting and 

recordkeeping requirements. 

42 CFR Part 460 

Aged, Citizenship and naturalization, 

Civil rights, Health, Health care, Health 

records, Individuals with disabilities, 

Medicaid, Medicare, Religious 

discrimination, Reporting and 

recordkeeping requirements, Sex 

discrimination. 

45 CFR Part 170 

Computer technology, Health, Health 

care, Health insurance, Health records, 

Hospitals, Incorporation by reference, 

Laboratories, Medicaid, Medicare, 

Privacy, Public health, Reporting and 

recordkeeping requirements, Security 

measures. 

For the reasons set forth in the 

preamble, the Centers for Medicare & 

Medicaid Services proposes to amend 

42 CFR chapter IV and the Department 

of Health and Human Services proposes 

to amend 45 CFR part 170 as set forth 

below: 

Title 42 

PART 417—HEALTH MAINTENANCE 

ORGANIZATIONS, COMPETITIVE 

MEDICAL PLANS, AND HEALTH CARE 

PREPAYMENT PLANS 

■ 1. The authority citation for part 417 

continues to read as follows: 

Authority: 42 U.S.C. 1302 and 1395hh, and 

300e, 300e–5, and 300e–9, and 31 U.S.C. 

9701. 

Subpart L—Medicare Contract 

Requirements 

■ 2. Section 417.472 is amended by 

adding paragraph (l) to read as follows: 

§ 417.472 Basic contract requirements. 

* * * * * 

(l) Resolution of complaints in the 

complaints tracking module. The HMO 

or CMP must comply with requirements 

of §§ 422.125 and 422.504(a)(15) of this 

chapter to, through the CMS complaints 

tracking module as defined in 

§ 422.125(a), address and resolve 

complaints received by CMS against the 

HMO or CMP within the required 

timeframes. References to the MA 

organization or MA plan in those 

regulations shall be read as references to 

the HMO or CMP. 

* * * * * 

PART 422—MEDICARE ADVANTAGE 

PROGRAM 

■ 3. The authority citation for part 422 

is revised to read as follows: 

Authority: 42 U.S.C. 1302, 1306, 1395w–21 

through 1395w–28, and 1395hh. 

■ 4. Section 422.2 is amended by 

revising the definition of ‘‘Basic 

benefits’’ to read as follows: 

§ 422.2 Definitions. 

* * * * * 

Basic benefits means Part A and Part 

B benefits except— 

(1) Hospice services; and 

(2) Beginning in 2021, organ 

acquisitions for kidney transplants, 

including costs covered under section 

1881(d) of the Act. 

* * * * * 

■ 5. Section 422.52 is amended by: 

■ a. Revising paragraph (b)(2); 

■ b. Redesignating paragraph (f) as 

paragraph (f) introductory text; and 

■ c. Adding paragraph (f)(1) and 

reserved paragraph (f)(2). 

The revision and additions read as 

follows: 

§ 422.52 Eligibility to elect an MA plan for 

special needs individuals. 

* * * * * 

(b) * * * 

(2) Meet the eligibility requirements 

for that specific SNP, including any 

additional eligibility requirements 

established in the State Medicaid 

agency contract (as described at 

§ 422.107(a)) for dual eligible special 

needs plans; and 

* * * * * 

(f) * * * 

(1) For enrollments into a SNP that 

exclusively enrolls individuals that 

have severe or disabling chronic 

conditions (C–SNP), the organization 

must contact the applicant’s current 

physician to confirm that the applicant 

has the qualifying condition(s). The 

organization must obtain this 

information in one of the following two 

ways described in paragraph (f)(1)(i) or 

(ii) of this section: 

(i) Contact the physician or 

physician’s office and obtain 

verification of the condition(s) prior to 

enrollment in a form and manner 

authorized by CMS from the applicant’s 

primary care provider or specialist 

treating the qualifying condition(s). 

(ii) Through an assessment with the 

enrollee using a pre-enrollment 

qualification assessment tool (PQAT) 

where the assessment and the 

information gathered are verified (as 

described in paragraph (f)(1)(iii) of this 

section) before the end of the first 

month of enrollment in the C–SNP. Use 

of a PQAT requires the following: 

(A) The PQAT must do all of the 

following in paragraphs (f)(1)(i)(A)(1) 

through (4) of this section: 

(1) Include clinically appropriate 

questions relevant to the chronic 

condition(s) on which the C–SNP 

focuses. 

(2) Gather sufficient reliable evidence 

of having the applicable condition using 

the applicant’s past medical history, 

current signs or symptoms, and current 

medications. 

(3) Include the date and time of the 

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face with the applicant, or the receipt 

date if the C–SNP receives the 

completed PQAT by mail or by 

electronic means (if available). 

(4) Include a signature line for and be 

signed by a physician to confirm the 

individual’s eligibility for C–SNP 

enrollment. 

(B) The C–SNP conducts a postenrollment confirmation of each 

enrollee’s information and eligibility 

using medical information (medical 

history, current signs or symptoms, 

diagnostic testing, and current 

medications) provided by the enrollee’s 

primary care physician or the specialist 

treating the chronic condition. 

(C) The C–SNP must include the 

information gathered in the PQAT and 

used in this verification process in its 

records related to or about the enrollee 

that are subject to the confidentiality 

requirements in § 422.118. 

(D)(1) The C–SNP tracks the total 

number of enrollees and the number 

and percent by condition whose postenrollment verification matches the preenrollment assessment. 

(2) Data and supporting 

documentation are made available upon 

request by CMS. 

(E) If the organization does not obtain 

verification of the enrollees’ required 

chronic condition(s) by the end of the 

first month of enrollment in the C–SNP, 

the organization must— 

(1) Disenroll the enrollee as of the end 

of the second month of enrollment; and 

(2) Send the enrollee notice of the 

disenrollment within the first 7 calendar 

days of the second month of enrollment. 

(F) The organization must maintain 

the enrollment of the individual if 

verification of the required condition(s) 

is obtained at any point before the end 

of the second month of enrollment. 

(iii) To complete the PQAT, the C– 

SNP is required to have the individual’s 

current physician (primary care 

physician or specialist treating the 

qualifying condition) or a physician 

employed or contracted by the plan 

administer the PQAT directly with the 

enrollee or provide confirmation (with 

or without the presence of the enrollee) 

that the information in the document 

supports a determination that the 

individual is eligible for the C–SNP. The 

enrollee’s physician must sign the 

completed PQAT. 

(2) [Reserved] 

■ 6. Section 422.60 is amended by 

revising paragraph (a)(1) and adding 

paragraphs (a)(3) and (h) to read as 

follows: 

§ 422.60 Election process. 

(a) * * * 

(1) Except for the limitations on 

enrollment in an MA MSA plan 

provided by § 422.62(d)(1) and except as 

specified in paragraphs (a)(2) and (3) of 

this section, each MA organization must 

accept without restriction (except for an 

MA RFB plan as provided by § 422.57) 

individuals who are eligible to elect an 

MA plan that the MA organization offers 

and who elect an MA plan during initial 

coverage election periods under 

§ 422.62(a)(1), annual election periods 

under § 422.62(a)(2), and under the 

circumstances described in 

§ 422.62(b)(1) through (4). 

* * * * * 

(3) Dual eligible special needs plans 

must limit enrollments to those 

individuals who meet the eligibility 

requirements established in the State 

Medicaid agency contract, as specified 

at § 422.52(b)(2). 

* * * * * 

(h) Authorized representatives. As 

used in this subpart, an authorized 

representative is an individual who is 

the legal representative or otherwise 

legally able to act on behalf of an 

enrollee, as the law of the State in 

which the beneficiary resides may 

allow, in order to execute an enrollment 

or disenrollment request. 

(1) The authorized representative 

would constitute the ‘‘beneficiary’’ or 

the ‘‘enrollee’’ for the purpose of making 

an election. 

(2) Authorized representatives may 

include court-appointed legal guardians, 

persons having durable power of 

attorney for health care decisions, or 

individuals authorized to make health 

care decisions under State surrogate 

consent laws, provided they have the 

authority to act for the beneficiary in 

this capacity. 

■ 7. Section 422.62 is amended by 

revising paragraphs (a)(1)(i) and (a)(4) to 

read as follows: 

§ 422.62 Election of coverage under an MA 

plan. 

(a) * * * 

(1) * * * 

(i) The last day of the second month 

after the month in which they are first 

entitled to Part A and enrolled in Part 

B; or 

* * * * * 

(4) Open enrollment period for 

institutionalized individuals. After 

2005, an individual who is eligible to 

elect an MA plan and who is 

institutionalized, as defined in § 422.2, 

is not limited (except as provided for in 

paragraph (d) of this section for MA 

MSA plans) in the number of elections 

or changes he or she may make. 

(i) Subject to the MA plan being open 

to enrollees as provided under 

§ 422.60(a)(2), an MA eligible 

institutionalized individual may at any 

time elect an MA plan or change his or 

her election from an MA plan to 

Original Medicare, to a different MA 

plan, or from Original Medicare to an 

MA plan. 

(ii) The open enrollment period for 

institutionalized individuals ends on 

the last day of the second month after 

the month the individual ceases to 

reside in one of the long-term care 

facility settings described in the 

definition of ‘‘institutionalized’’ in 

§ 422.2. 

* * * * * 

■ 8. Section 422.68 is amended by 

adding paragraph (g) to read as follows: 

§ 422.68 Effective dates of coverage and 

change of coverage. 

* * * * * 

(g) Beneficiary choice of effective 

date. If a beneficiary is eligible for more 

than one election period, resulting in 

more than one possible effective date, 

the MA organization must allow the 

beneficiary to choose the election period 

that results in the individual’s desired 

effective date. 

(1) To determine the beneficiary’s 

choice of election period and effective 

date, the MA organization must attempt 

to contact the beneficiary and must 

document its attempts. 

(2) If the MA organization is unable to 

obtain the beneficiary’s desired 

enrollment effective date, the MA 

organization must assign an election 

period using the following ranking of 

election periods: 

(i) ICEP/Part D IEP 

(ii) MA–OEP 

(iii) SEP 

(iv) AEP 

(v) OEPI 

(3) If the MA organization is unable to 

obtain the beneficiary’s desired 

disenrollment effective date, the MA 

organization must assign an election 

period that results in the earliest 

disenrollment. 

■ 9. Section 422.100 is amended by 

adding paragraph (o) to read as follows: 

§ 422.100 General requirements. 

* * * * * 

(o) Cost sharing standards for D–SNP 

PPOs. Beginning on or after January 1, 

2026, a MA organization offering a local 

PPO plan or regional PPO plan that is 

a dual eligible special needs plan must 

establish cost sharing for out-of-network 

services that— 

(1) Complies with the limits described 

in paragraph (f)(6) of this section with 

the exception that references to the 

MOOP amounts refer to the total 

catastrophic limits under § 422.101(d)(3) 

for local PPOs and MA regional plans; 

and 


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(2) Complies with the limits described 

in paragraph (j)(1) of this section with 

the exception that references to the 

MOOP amounts that refer to the total 

catastrophic limits under § 422.101(d)(3) 

for local PPOs and MA regional plans 

and, for regional PPO dual eligible 

special needs plans, excluding 

paragraph (j)(1)(i)(C)(2) and the last 

sentence of paragraph (j)(1)(i)(E) of this 

section. 

■ 10. Section 422.102 is amended by: 

■ a. Revising paragraph (f)(1)(i)(A)(2); 

■ b. Redesignating paragraph (f)(3) as 

paragraph (f)(4); 

■ c. Adding a new paragraph (f)(3); 

■ d. Revising newly redesignated 

paragraph (f)(4) introductory text and 

(f)(4)(iii) and (iv); and 

■ e. Adding paragraph (f)(5). 

The additions and revision read as 

follows: 

§ 422.102 Supplemental benefits. 

* * * * * 

(f) * * * 

(1) * * * 

(i) * * * 

(A) * * * 

(2) Has a high risk of hospitalization 

or other adverse health outcomes; and 

* * * * * 

(3) MA organization responsibilities. 

An MA organization that includes an 

item or service as SSBCI in its bid must 

be able to demonstrate through relevant 

acceptable evidence that the item or 

service has a reasonable expectation of 

improving or maintaining the health or 

overall function of a chronically ill 

enrollee. By the date on which an MA 

organization submits its bid, the MA 

organization must establish a written 

bibliography of relevant acceptable 

evidence concerning the impact that the 

item or service has on the health or 

overall function of its recipient. For 

each citation in the written 

bibliography, the MA organization must 

include a working hyperlink to or a 

document containing the entire source 

cited. 

(i) Relevant acceptable evidence 

includes large, randomized controlled 

trials or prospective cohort studies with 

clear results, published in a peerreviewed journal, and specifically 

designed to investigate whether the item 

or service impacts the health or overall 

function of a population, or large 

systematic reviews or meta-analyses 

summarizing the literature of the same. 

(ii) An MA organization must include 

in its bibliography all relevant 

acceptable evidence published within 

the 10 years prior to the June 

immediately preceding the coverage 

year during which the SSBCI will be 

offered. 

(iii) If no evidence of the type 

described in paragraphs (f)(3)(i) and (ii) 

of this section exists for a given item or 

service, then MA organization may cite 

case studies, Federal policies or reports, 

internal analyses, or any other 

investigation of the impact that the item 

or service has on the health or overall 

function of its recipient as relevant 

acceptable evidence in the MA 

organization’s bibliography. 

(iv) The MA organization must make 

its bibliography of relevant acceptable 

evidence available to CMS upon 

request. 

(4) Plan responsibilities. An MA plan 

offering SSBCI must do all of the 

following: 

* * * * * 

(iii)(A) Have and apply written 

policies based on objective criteria for 

determining a chronically ill enrollee’s 

eligibility to receive a particular SSBCI; 

and 

(B) Document the written policies 

specified in paragraph (f)(4)(iii)(A) of 

this section and the objective criteria on 

which the written policies are based. 

(iv) Document each determination 

that an enrollee is not eligible to receive 

an SSBCI and make this information 

available to CMS upon request. 

(5) CMS review of SSBCI offerings in 

bids. (i) CMS may decline to approve an 

MA organization’s bid if CMS 

determines that the MA organization 

has not demonstrated, through relevant 

acceptable evidence, that an SSBCI has 

a reasonable expectation of improving 

or maintaining the health or overall 

function of the chronically ill enrollees 

that the MA organization is targeting. 

(ii) CMS may annually review the 

items or services that an MA 

organization includes as SSBCI in its 

bid for compliance with all applicable 

requirements, taking into account 

updates to the relevant acceptable 

evidence applicable to each item or 

service. 

(iii) This provision does not limit 

CMS’s authority to review and negotiate 

bids or to reject bids under section 

1854(a) of the Act and subpart F of this 

part nor does it limit CMS’s authority to 

review plan benefits and bids for 

compliance with all applicable 

requirements. 

■ 11. Section 422.111 is amended by 

adding paragraph (l) to read as follows: 

§ 422.111 Disclosure requirements. 

* * * * * 

(l) Mid-year notice of unused 

supplemental benefits. Beginning 

January 1, 2026, MA organizations must 

send notification annually, no sooner 

than June 30 and no later than July 31, 

to each enrollee with unused 

supplemental benefits consistent with 

the requirements of § 422.2267(e)(42). 

■ 12. Section 422.116 is amended by: 

■ a. Adding paragraph (b)(2)(xiv); 

■ b. In table 1 to paragraph (d)(2), 

adding an entry for ‘‘Outpatient 

Behavioral Health’’ following the entry 

for ‘‘Orthopedic Surgery’’; 

■ c. Adding paragraph (d)(5)(xv); 

■ d. Revising paragraph (f)(1) 

introductory text; and 

■ e. Adding paragraphs (f)(2)(iv) and 

(f)(3). 

The additions and revisions read as 

follows: 

§ 422.116 Network adequacy. 

* * * * * 

(b) * * * 

(2) * * * 

(xiv) Outpatient Behavioral Health, 

which can include Marriage and Family 

Therapists (as defined in section 

1861(lll) of the Act), Mental Health 

Counselors (as defined in section 

1861(lll) of the Act), Opioid Treatment 

Programs (as defined in section 1861(jjj) 

of the Act), Community Mental Health 

Centers (as defined in section 

1861(ff)(3)(B) of the Act), or those of the 

following who regularly furnish or will 

regularly furnish behavioral health 

counseling or therapy services 

including, but not limited to, 

psychotherapy or prescription of 

medication for substance use disorders: 

physician assistants, nurse practitioners 

and clinical nurse specialists (as defined 

in section 1861(aa)(5) of the Act); 

addiction medicine physicians; or 

outpatient mental health and substance 

use treatment facilities. 

* * * * * 

(d) * * * 

(2) * * * 


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TABLE 1 TO PARAGRAPH (d)(2) 

Provider/Facility type 

Large metro Metro Micro Rural CEAC 

Max time Max 

distance Max time Max distance Max time Max distance Max time Max distance Max time Max distance 

*******

Outpatient Behavioral Health ...................... 20 10 40 25 55 40 60 50 110 100 

*******

* * * * * 

(d) * * * 

(5) * * * 

(xv) Outpatient Behavioral Health, 

described in paragraph (b)(2)(xiv) of this 

section. 

* * * * * 

(f) * * * 

(1) An MA plan may request an 

exception to network adequacy criteria 

in paragraphs (b) through (e) of this 

section when either paragraph (f)(1)(i) or 

(ii) of this section is met: 

(i)(A) Certain providers or facilities 

are not available for the MA plan to 

meet the network adequacy criteria as 

shown in the Provider Supply file for 

the year for a given county and specialty 

type; and 

(B) The MA plan has contracted with 

other providers and facilities that may 

be located beyond the limits in the time 

and distance criteria, but are currently 

available and accessible to most 

enrollees, consistent with the local 

pattern of care; or 

(ii)(A) A facility-based InstitutionalSpecial Needs Plan (I–SNP) is unable to 

contract with certain specialty types 

required under paragraph (b) of this 

section because of the way enrollees in 

facility-based I–SNPs receive care; or 

(B) A facility-based I–SNP provides 

sufficient and adequate access to basic 

benefits through additional telehealth 

benefits (in compliance with § 422.135) 

when using telehealth providers of the 

specialties listed in paragraph (d)(5) of 

this section in place of in-person 

providers to fulfill network adequacy 

standards in paragraphs (b) through (e) 

of this section. 

(2) * * * 

(iv) As applicable, the facility-based 

I–SNP submits: 

(A) Evidence of the inability to 

contract with certain specialty types 

required under this section due to the 

way enrollees in facility-based I–SNPs 

receive care; or 

(B) Substantial and credible evidence 

that sufficient and adequate access to 

basic benefits is provided to enrollees 

using additional telehealth benefits (in 

compliance with § 422.135) furnished 

by providers of the specialties listed in 

paragraph (d)(5) of this section and the 

facility-based I–SNP covers out-ofnetwork services furnished by a 

provider in person when requested by 

the enrollee as provided in 

§ 422.135(c)(1) and (2), with in-network 

cost sharing for the enrollee. 

(3) Any MA organization that receives 

the exception provided for facility-based 

I–SNPs must agree to offer only facilitybased I–SNPs under the MA contract 

that receives the exception. 

■ 13. Section 422.125 is added to read 

as follows: 

§ 422.125 Resolution of complaints in 

Complaints Tracking Module. 

(a) Definitions. For the purposes of 

this section, the terms have the 

following meanings: 

Assignment date is the date CMS 

assigns a complaint to a particular MA 

organization in the Complaints Tracking 

Module. 

Complaints Tracking Module means 

an electronic system maintained by 

CMS to record and track complaints 

submitted to CMS about Medicare 

health and drug plans from beneficiaries 

and others. 

Immediate need complaint means a 

complaint involving a situation that 

prevents a beneficiary from accessing 

care or a service for which they have an 

immediate need. This includes when 

the beneficiary currently has enough of 

the drug or supply to which they are 

seeking access to last for 2 or fewer 

days. 

Urgent complaint means a complaint 

involving a situation that prevents a 

beneficiary from accessing care or a 

service for which they do not have an 

immediate need. This includes when 

the beneficiary currently has enough of 

the drug or supply to which they are 

seeking access to last for 3 to 14 days. 

(b) Timelines for complaint 

resolution—(1) Immediate need 

complaints. The MA organization must 

resolve immediate need complaints 

within 2 calendar days of the 

assignment date. 

(2) Urgent complaints. The MA 

organization must resolve urgent 

complaints within 7 calendar days of 

the assignment date. 

(3) All other complaints. The MA 

organization must resolve all other 

complaints within 30 calendar days of 

the assignment date. 

(c) Timeline for contacting individual 

filing a complaint. Regardless of the 

type of complaint received, the MA 

organization must contact the 

individual who filed a complaint within 

3 calendar days of the assignment date. 

■ 14. Section 422.137 is amended by 

adding paragraphs (c)(5) and (d)(6) and 

(7) to read as follows: 

§ 422.137 Medicare Advantage Utilization 

Management Committee. 

* * * * * 

(c) * * * 

(5) Beginning January 1, 2025, include 

at least one member with expertise in 

health equity. Expertise in health equity 

includes, but is not limited to, 

educational degrees or credentials with 

an emphasis on health equity; 

experience conducting studies 

identifying disparities amongst different 

population groups; experience leading 

organization-wide policies, programs, or 

services to achieve health equity; or 

experience leading advocacy efforts to 

achieve health equity. 

(d) * * * 

(6) Beginning in 2025, annually 

conduct a health equity analysis of the 

use of prior authorization. 

(i) The final report of the analysis 

must be approved by the member of the 

committee with expertise in health 

equity before it is publicly posted. 

(ii) The analysis must examine the 

impact of prior authorization on 

enrollees with one or more of the 

following social risk factors: 

(A) Receipt of the low-income subsidy 

or being dually eligible for Medicare 

and Medicaid. 

(B) Having a disability. Disability 

status is determined using the variable 

original reason for entitlement code 

(OREC) for Medicare using the 

information from the Social Security 

Administration and Railroad Retirement 

Board record systems. 

(iii) The analysis must use the 

following metrics, calculated for 

enrollees with the specified social risk 

factors and enrollees without the 


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specified social risk factors, to conduct 

the analysis at the plan level using data 

from the prior contract year: 

(A) The percentage of standard prior 

authorization requests that were 

approved, aggregated for all items and 

services. 

(B) The percentage of standard prior 

authorization requests that were denied, 

aggregated for all items and services. 

(C) The percentage of standard prior 

authorization requests that were 

approved after appeal, aggregated for all 

items and services. 

(D) The percentage of prior 

authorization requests for which the 

timeframe for review was extended, and 

the request was approved, aggregated for 

all items and services. 

(E) The percentage of expedited prior 

authorization requests that were 

approved, aggregated for all items and 

services. 

(F) The percentage of expedited prior 

authorization requests that were denied, 

aggregated for all items and services. 

(G) The average and median time that 

elapsed between the submission of a 

request and a determination by the MA 

plan, for standard prior authorizations, 

aggregated for all items and services. 

(H) The average and median time that 

elapsed between the submission of a 

request and a decision by the MA plan 

for expedited prior authorizations, 

aggregated for all items and services. 

(7) By July 1, 2025, and annually 

thereafter, publicly post the results of 

the health equity analysis of the 

utilization management policies and 

procedures on the plan’s website 

meeting the following requirements: 

(i) In a prominent manner and clearly 

identified in the footer of the website. 

(ii) Easily accessible to the general 

public, without barriers, including but 

not limited to ensuring the information 

is accessible: 

(A) Free of charge. 

(B) Without having to establish a user 

account or password. 

(C) Without having to submit personal 

identifying information. 

(iii) In a machine-readable format 

with the data contained within that file 

being digitally searchable and 

downloadable. 

(iv) Include a .txt file in the root 

directory of the website domain that 

includes a direct link to the machinereadable file to establish and maintain 

automated access. 

■ 15. Section 422.164 is amended by: 

■ a. Revising paragraphs (g)(1)(iii) 

introductory text and (g)(1)(iii)(A); 

■ b. Removing and reserving paragraphs 

(g)(1)(iii)(B) and (F); 

■ c. Revising paragraph (g)(1)(iii)(H); 

■ d. Removing and reserving paragraphs 

(g)(1)(iii)(I) and (J); 

■ e. Revising paragraphs (g)(1)(iii)(K)(2) 

and (g)(1)(iii)(O); and 

■ f. Adding paragraph (h)(3). 

The revisions and addition read as 

follows: 

§ 422.164 Adding, updating, and removing 

measures. 

* * * * * 

(g) * * * 

(1) * * * 

(iii) For the appeals measures, CMS 

uses statistical criteria to estimate the 

percentage of missing data for each 

contract using data from MA 

organizations, the independent review 

entity (IRE), or CMS administrative 

sources to determine whether the data at 

the IRE are complete. CMS uses scaled 

reductions for the Star Ratings for the 

applicable appeals measures to account 

for the degree to which the IRE data are 

missing. 

(A)(1) The data reported by the MA 

organization on appeals, including the 

number of reconsiderations requested, 

denied, upheld, dismissed, or otherwise 

disposed of by the MA organization, and 

data from the IRE or CMS administrative 

sources, that align with the Star Ratings 

year measurement period are used to 

determine the scaled reduction. 

(2) If there is a contract consolidation 

as described at § 422.162(b)(3), the data 

described in paragraph (g)(1)(iii)(A)(1) 

of this section are combined for the 

consumed and surviving contracts 

before the methodology provided in 

paragraphs (g)(1)(iii)(B) through (H) and 

(K) through (O) of this section is 

applied. 

* * * * * 

(H) The Part C calculated error is 

determined using 1 minus the quotient 

of the total number of cases received by 

the IRE and the total number of cases 

that should have been forwarded to the 

IRE. The total number of cases that 

should have been forwarded to the IRE 

is determined by the sum of the 

partially favorable (adverse) 

reconsiderations and unfavorable 

(adverse) reconsiderations for the 

applicable measurement year. 

* * * * * 

(K) * * * 

(2) The number of cases not 

forwarded to the IRE is at least 10 for 

the measurement year. 

* * * * * 

(O) CMS reduces the measure rating 

to 1 star for the applicable appeals 

measure(s) if CMS does not have 

accurate, complete, and unbiased data 

to validate the completeness of the Part 

C appeals measures. 

* * * * * 

(h) * * * 

(3) Beginning with the 2025 

measurement year (2027 Star Ratings), 

an MA organization may request that 

CMS review its contract’s administrative 

data for Patient Safety measures 

provided that the request is received by 

the annual deadline set by CMS for the 

applicable Star Ratings year. 

* * * * * 

■ 16. Section 422.166 is amended by 

revising paragraph (f)(2)(i)(B) and 

adding paragraphs (f)(3)(viii)(A) and (B) 

to read as follows: 

§ 422.166 Calculation of Star Ratings. 

* * * * * 

(f) * * * 

(2) * * * 

(i) * * * 

(B) To determine a contract’s final 

adjustment category, contract 

enrollment is determined using 

enrollment data for the month of 

December for the measurement period 

of the Star Ratings year. 

(1) For the first 2 years following a 

consolidation, for the surviving contract 

of a contract consolidation involving 

two or more contracts for health or drug 

services of the same plan type under the 

same parent organization, the 

enrollment data for the month of 

December for the measurement period 

of the Star Ratings year are combined 

across the surviving and consumed 

contracts in the consolidation. 

(2) The count of beneficiaries for a 

contract is restricted to beneficiaries 

that are alive for part or all of the month 

of December of the applicable 

measurement year. 

(3) A beneficiary is categorized as LIS/ 

DE if the beneficiary was designated as 

full or partially dually eligible or 

receiving a LIS at any time during the 

applicable measurement period. 

(4) Disability status is determined 

using the variable original reason for 

entitlement (OREC) for Medicare using 

the information from the Social Security 

Administration and Railroad Retirement 

Board record systems. 

* * * * * 

(3) * * * 

(viii) * * * 

(A) In the case of contract 

consolidations involving two or more 

contracts for health or drug services of 

the same plan type under the same 

parent organization, CMS calculates the 

HEI reward for the surviving contract 

accounting for both the surviving and 

consumed contract(s). For the first year 

following a consolidation, the HEI 

reward for the surviving contract is 

calculated as the enrollment-weighted 

mean of the HEI reward of the 

consumed and surviving contracts using 


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enrollment from July of the most recent 

measurement year used in calculating 

the HEI reward. A reward value of zero 

is used in calculating the enrollmentweighted mean for contracts that do not 

meet the minimum percentage of 

enrollees with the SRF thresholds or the 

minimum performance threshold 

specified at paragraph (f)(3)(vii) of this 

section. 

(B) For the second year following a 

consolidation when calculating the HEI 

score for the surviving contract, the 

patient-level data used in calculating 

the HEI score will be combined from the 

consumed and surviving contracts and 

used in calculating the HEI score. 

* * * * * 

■ 17. Section 422.260 is amended by 

revising paragraph (c)(2)(vii) to read as 

follows: 

§ 422.260 Appeals of quality bonus 

payment determinations. 

* * * * * 

(c) * * * 

(2) * * * 

(vii) After the hearing officer’s 

decision is issued to the MA 

organization and the CMS 

Administrator, the hearing officer’s 

decision is subject to review and 

modification by the CMS Administrator 

within 10 business days of issuance. If 

the Administrator does not review and 

issue a decision within 10 business 

days, the hearing officer’s decision is 

final and binding. 

* * * * * 

■ 18. Section 422.310 is amended by: 

■ a. Revising paragraphs (f)(1)(vi) and 

(vii); 

■ b. Adding reserved paragraph 

(f)(3)(iv); and 

■ c. Adding paragraph (f)(3)(v). 

The revisions and addition read as 

follows: 

§ 422.310 Risk adjustment data. 

* * * * * 

(f) * * * 

(1) * * * 

(vi) To conduct evaluations and other 

analysis to support the Medicare and 

Medicaid programs (including 

demonstrations) and to support public 

health initiatives and other health carerelated research; 

(vii) For activities to support the 

administration of the Medicare and 

Medicaid programs; 

* * * * * 

(3) * * * 

(iv) [Reserved] 

(v) CMS determines that releasing 

data to State Medicaid agencies before 

reconciliation for the purpose of 

coordinating care for dually eligible 

individuals is necessary and appropriate 

to support activities or authorized uses 

under paragraph (f)(1)(vii) of this 

section. 

* * * * * 

■ 19. Section 422.311 is amended by: 

■ a. Revising paragraphs (a) and 

(c)(5)(ii)(B); 

■ b. Removing paragraph (c)(5)(ii)(C); 

■ c. Revising paragraph (c)(5)(iii); 

■ d. Adding paragraph (c)(5)(iv); 

■ e. Revising paragraphs (c)(6)(i)(A) and 

(c)(6)(iv)(B); 

■ f. Adding paragraph (c)(6)(v); 

■ g. Revising paragraph (c)(7)(ix); 

■ h. Revising paragraphs (c)(8)(iii), 

(c)(8)(iv) introductory text, (c)(8)(iv)(A), 

and (c)(8)(vi); and 

■ i. Adding paragraphs (c)(8)(vii) and 

(c)(9). 

The revisions and additions read as 

follows: 

§ 422.311 RADV audit dispute and appeal 

processes. 

(a) Risk adjustment data validation 

(RADV) audits. In accordance with 

§§ 422.2 and 422.310(e), the Secretary 

conducts RADV audits to ensure riskadjusted payment integrity and 

accuracy. 

(1) Recovery of improper payments 

from MA organizations is conducted in 

accordance with the Secretary’s 

payment error extrapolation and 

recovery methodologies. 

(2) CMS may apply extrapolation to 

audits for payment year 2018 and 

subsequent payment years. 

* * * * * 

(c) * * * 

(5) * * * 

(ii) * * * 

(B) Whether the MA organization 

requests a payment error calculation 

appeal, the issues with which the MA 

organization disagrees, and the reasons 

for the disagreements. MA organizations 

will forgo their medical record review 

determination appeal if they choose to 

file only a payment error calculation 

appeal because medical record review 

determinations need to be final prior to 

adjudicating a payment error calculation 

appeal. 

(iii) For MA organizations that intend 

to appeal both the medical record 

review determination and the RADV 

payment error calculation, an MA 

organization’s request for appeal of its 

RADV payment error calculation may 

not be filed and will not be adjudicated 

until: 

(A) The administrative appeal process 

for the RADV medical record review 

determinations filed by the MA 

organization has been exhausted; or 

(B) The MA organization does not 

timely request a RADV medical record 

review determination appeal at the 

hearing stage and/or the CMS 

Administrator review stage, as 

applicable. 

(iv) An MA organization whose 

medical record review determination 

appeal has been completed as described 

in paragraph (c)(5)(iii) of this section 

has 60 days from the date of issuance of 

a revised RADV audit report, based on 

the final medical record review 

determination, to file a written request 

with CMS for a RADV payment error 

calculation appeal. This request for 

RADV payment error calculation appeal 

must clearly specify where the 

Secretary’s RADV payment error 

calculation was erroneous, what the MA 

organization disagrees with, and the 

reasons for the disagreements. 

(6) * * * 

(i) * * * 

(A) Any and all HCC(s) that the 

Secretary identified as being in error 

that the MA organization wishes to 

appeal. 

* * * * * 

(iv) * * * 

(B) The reconsideration official’s 

decision is final unless it is reversed or 

modified by a final decision of the 

hearing officer as defined at paragraph 

(c)(7)(x) of this section. 

* * * * * 

(v) Computations based on 

reconsideration official’s decision. (A) 

Once the reconsideration official’s 

medical record review determination 

decision is considered final in 

accordance with paragraph (c)(6)(iv)(B) 

of this section, the Secretary 

recalculates the MA organization’s 

RADV payment error and issues a 

revised RADV audit report superseding 

all prior RADV audit reports to the 

appellant MA organization. 

(B) For MA organizations appealing 

the RADV payment error calculation 

only, once the reconsideration official’s 

payment error calculation decision is 

considered final in accordance with 

paragraph (c)(6)(iv)(B) of this section, 

the Secretary recalculates the MA 

organization’s RADV payment error and 

issues a revised RADV audit report 

superseding all prior RADV audit 

reports to the appellant MA 

organization. 

* * * * * 

(7) * * * 

(ix) Computations based on Hearing 

Officer’s decision. (A) Once the hearing 

officer’s medical record review 

determination decision is considered 

final in accordance with paragraph 

(c)(7)(x) of this section, the Secretary 

recalculates the MA organization’s 

RADV payment error and issues a 

revised RADV audit report superseding 


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all prior RADV audit reports to the 

appellant MA organization. 

(B) For MA organizations appealing 

the RADV payment error calculation 

only, once the hearing officer’s payment 

error calculation decision is considered 

final in accordance with paragraph 

(c)(7)(x) of this section, the Secretary 

recalculates the MA organization’s 

RADV payment error and issues a 

revised RADV audit report superseding 

all prior RADV audit reports to the 

appellant MA organization. 

* * * * * 

(8) * * * 

(iii) After reviewing a request for 

review, the CMS Administrator has the 

discretion to elect to review the hearing 

officer’s decision or to decline to review 

the hearing officer’s decision. If the 

CMS Administrator does not decline to 

review or does not elect to review 

within 90 days of receipt of either the 

MA organization or CMS’s timely 

request for review (whichever is later), 

the hearing officer’s decision becomes 

final. 

(iv) If the CMS Administrator elects to 

review the hearing decision— 

(A) The CMS Administrator 

acknowledges the decision to review the 

hearing decision in writing and notifies 

CMS and the MA organization of their 

right to submit comments within 15 

days of the date of the issuance of the 

notification that the Administrator has 

elected to review the hearing decision; 

and 

* * * * * 

(v) The CMS Administrator renders 

his or her final decision in writing 

within 60 days of the date of the 

issuance of the notice acknowledging 

his or her decision to elect to review the 

hearing officer’s decision. 

(vi) The decision of the hearing officer 

is final if the CMS Administrator— 

(A) Declines to review the hearing 

officer’s decision; or 

(B) Does not decline to review or elect 

to review within 90 days of the date of 

the receipt of either the MA 

organization or CMS ’s request for 

review (whichever is later); or 

(C) Does not make a decision within 

60 days of the date of the issuance of the 

notice acknowledging his or her 

decision to elect to review the hearing 

officer’s decision. 

* * * * * 

(vii) Computations based on CMS 

Administrator decision. (A) Once the 

CMS Administrator’s medical record 

review determination decision is 

considered final in accordance with 

paragraph (c)(8)(vi) of this section, the 

Secretary recalculates the MA 

organization’s RADV payment error and 

issues a revised RADV audit report 

superseding all prior RADV audit 

reports to the appellant MA 

organization. 

(B) For MA organizations appealing 

the RADV payment error calculation 

only, once the CMS Administrator’s 

payment error calculation decision is 

considered final in accordance with 

paragraph (c)(8)(vi) of this section, the 

Secretary recalculates the MA 

organization’s RADV payment error and 

issues a revised and final RADV audit 

report superseding all prior RADV audit 

reports to the appellant MA 

organization. 

(9) Final agency action. In cases when 

an MA organization files a payment 

error calculation appeal subsequent to a 

medical record review determination 

appeal that has completed the 

administrative appeals process, the 

medical record review determination 

appeal final decision and the payment 

error calculation appeal final decision 

will not be considered a final agency 

action until the payment error 

calculation appeal has completed the 

administrative appeals process and a 

final revised audit report superseding 

all prior RADV audit reports has been 

issued to the appellant MA 

organization. 

■ 20. Section 422.502 is amended by: 

■ a. Revising paragraphs (b)(1)(i)(A) 

through (C); and 

■ b. Removing paragraphs 

(b)(1)(i)(E)(2)(A) and (B). 

The revisions read as follows. 

§ 422.502 Evaluation and determination 

procedures. 

* * * * * 

(b) * * * 

(1) * * * 

(i) * * * 

(A) Was under intermediate sanction 

under subpart O of this part or a 

determination by CMS to prohibit the 

enrollment of new enrollees in 

accordance with § 422.2410(c), with the 

exception of a sanction imposed under 

§ 422.752(d). 

(B) Failed to maintain a fiscally sound 

operation consistent with the 

requirements of § 422.504(a)(14). 

(C) Filed for or is currently in Federal 

or State bankruptcy proceedings. 

* * * * * 

■ 21. Section 422.503 is amended by 

adding paragraph (b)(8) to read as 

follows: 

§ 422.503 General provisions. 

* * * * * 

(b) * * * 

(8) Not newly offer a dual eligible 

special needs plan that would result in 

noncompliance with § 422.514(h). 

* * * * * 

■ 22. Section 422.504 is amended by 

revising paragraph (a)(15) and adding 

paragraphs (a)(20) and (21) to read as 

follows. 

§ 422.504 Contract provisions. 

* * * * * 

(a) * * * 

(15) As described in § 422.125, 

address and resolve complaints received 

by CMS against the MA organization in 

the Complaints Tracking Module. 

* * * * * 

(20) To comply with the requirements 

established in § 422.514(h). 

(21) Not to establish additional MA 

plans that are not facility-based ISNPs to 

contracts described in § 422.116(f)(3). 

* * * * * 

■ 23. Section 422.510 is amended by 

adding paragraph (e) to read as follows: 

§ 422.510 Termination of contract by CMS. 

* * * * * 

(e) Intermediate sanctions imposed 

with CMS termination. If CMS makes a 

determination to terminate a MA 

organization’s contract under paragraph 

(a) of this section, CMS also imposes the 

intermediate sanctions at § 422.750(a)(1) 

and (3) in accordance with the following 

procedures: 

(1) The sanction goes into effect 15 

days after the termination notice is sent. 

(2) The MA organization has a right to 

appeal the intermediate sanction in the 

same proceeding as the termination 

appeal specified in paragraph (d) of this 

section. 

(3) A request for a hearing does not 

delay the date specified by CMS when 

the sanction becomes effective. 

(4) The sanction remains in effect— 

(i) Until the effective date of the 

termination; or 

(ii) If the termination decision is 

overturned on appeal, when a final 

decision is made by the hearing officer 

or Administrator. 

■ 24. Section 422.514 is amended by: 

■ a. Revising paragraphs (d)(1) 

introductory text, (d)(1)(ii), (d)(2) 

introductory text, and (d)(2)(ii); 

■ b. In paragraph (e)(1)(i), removing the 

phrase ‘‘Specialized MA Plan for 

Special Needs Individuals’’ and adding 

in its place the phrase ‘‘specialized MA 

plan for special needs individuals’’; 

■ c. In paragraph (e)(1)(iii), removing 

the phrase ‘‘chapter; and’’ and adding in 

its place ‘‘chapter;’’; 

■ d. In paragraph (e)(1)(iv), removing 

the phrase ‘‘of this section.’’ and adding 

in its place ‘‘of this section; and’’; and 

■ e. Adding paragraphs (e)(1)(v) and (h). 

The revisions and additions read as 

follows: 

§ 422.514 Enrollment requirements. 

* * * * * 


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(d) * * * 

(1) Enter into or renew a contract 

under this subpart for a MA plan that— 

* * * * * 

(ii) Projects enrollment in its bid 

submitted under § 422.254 in which 

enrollees entitled to medical assistance 

under a State plan under title XIX 

constitute a percentage of the plan’s 

total enrollment that meets or exceeds 

one of the following: 

(A) For plan year 2024, 80 percent. 

(B) For plan year 2025, 70 percent. 

(C) For plan year 2026 and subsequent 

years, 60 percent. 

(2) Renew a contract under this 

subpart for an MA plan that— 

* * * * * 

(ii) Unless the MA plan has been 

active for less than 1 year and has 

enrollment of 200 or fewer individuals 

at the time of such determination, has 

actual enrollment, as determined by 

CMS using the January enrollment of 

the current year in which enrollees who 

are entitled to medical assistance under 

a State plan under title XIX, constitute 

a percentage of the plan’s total 

enrollment that meets or exceeds one of 

the following: 

(A) For renewals for plan year 2024, 

80 percent. 

(B) For renewals for plan year 2025, 

70 percent. 

(C) For renewals for plan year 2026 

and subsequent years, 60 percent. 

(e) * * * 

(1) * * * 

(v) For transitions for plan year 2027 

and subsequent years, is a dual eligible 

special needs plan as defined in § 422.2. 

* * * * * 

(h) Rule on dual eligible special needs 

plans in relation to Medicaid managed 

care. (1) Beginning in 2027, where an 

MA organization offers a dual eligible 

special needs plan and the MA 

organization, its parent organization, or 

any entity that shares a parent 

organization with the MA organization 

also contracts with a State as a Medicaid 

managed care organization (MCO) (as 

defined in § 438.2 of this chapter) that 

enrolls dually eligible individuals as 

defined in § 423.772 of this chapter, 

during the effective dates and in the 

same service area (even if there is only 

partial overlap of the service areas) of 

that Medicaid MCO contract, the MA 

organization— 

(i) May only offer, or have a parent 

organization or share a parent 

organization with another MA 

organization that offers, one D–SNP for 

full-benefit dually eligible individuals, 

except as permitted in paragraph (h)(3) 

of this section; and 

(ii) Must limit new enrollment in the 

D–SNP to individuals enrolled in, or in 

the process of enrolling in, the Medicaid 

MCO. 

(2) Beginning in 2030, such D–SNPs 

may only enroll (or continue to enroll) 

individuals enrolled in (or in the 

process of enrolling in) the Medicaid 

MCO, except that such D–SNPs may 

continue to implement deemed 

continued eligibility requirements as 

described in § 422.52(d). 

(3)(i) If a State Medicaid agency’s 

contract with the MA organization 

limits enrollment for certain groups into 

D–SNPs (such as by age group or other 

criteria), the MA organization, its parent 

organization or an entity that shares a 

parent organization with the MA 

organization may offer one or more 

additional D–SNPs for full-benefit 

dually eligible individuals in the same 

service area in accordance with the 

group (or groups) eligible for D–SNPs 

based on provisions of the contract with 

the State Medicaid agency under 

§ 422.107 of this chapter. 

(ii) If the MA organization, its parent 

organization or an entity that shares a 

parent organization with the MA 

organization offers more than one D– 

SNP of any type (HMOs and/or PPOs), 

and one or more of the plans is subject 

to paragraph (h)(1) of this section, the 

plan (or plans) not subject to paragraph 

(h)(1) of this section may continue if 

they no longer accept new enrollment of 

full-benefit dually eligible individuals 

in the same service area as the plan (or 

plans) subject to paragraph (h)(1) of this 

section. 

■ 25. Section 422.516 is amended by 

revising paragraphs (a) introductory text 

and (a)(2) to read as follows: 

§ 422.516 Validation of Part C reporting 

requirements. 

(a) Required information. Each MA 

organization must have an effective 

procedure to develop, compile, 

evaluate, and report to CMS, to its 

enrollees, and to the general public, at 

the times and in the manner that CMS 

requires, and while safeguarding the 

confidentiality of the doctor-patient 

relationship, information with respect to 

the following: 

* * * * * 

(2) The procedures related to and 

utilization of its services and items. 

* * * * * 

■ 26. Section 422.530 is amended by 

adding paragraph (c)(4)(iii) to read as 

follows: 

§ 422.530 Plan crosswalks. 

* * * * * 

(c) * * * 

(4) * * * 

(iii) For contract year 2027 and 

subsequent years, where one or more 

MA organizations that share a parent 

organization seek to consolidate D– 

SNPs in the same service area down to 

a single D–SNP under one MA–PD 

contract to comply with requirements at 

§§ 422.514(h) and 422.504(a)(20), CMS 

permits enrollees to be moved between 

different contracts. 

* * * * * 

■ 27. Section 422.582 is amended by 

revising paragraph (b) to read as follows: 

§ 422.582 Request for a standard 

reconsideration. 

* * * * * 

(b) Timeframe for filing a request. 

Except as provided in paragraph (c) of 

this section, a request for 

reconsideration must be filed within 60 

calendar days after receipt of the written 

organization determination notice. 

(1) The date of receipt of the 

organization determination is presumed 

to be 5 calendar days after the date of 

the written organization determination, 

unless there is evidence to the contrary. 

(2) For purposes of meeting the 60- 

calendar day filing deadline, the request 

is considered as filed on the date it is 

received by the plan or delegated entity 

specified in the MA organization’s 

written organization determination. 

* * * * * 

■ 27. Section 422.584 is amended by 

revising the paragraph (b) heading and 

adding paragraphs (b) introductory text 

and (b)(3) and (4) to read as follows: 

§ 422.584 Expediting certain 

reconsiderations. 

* * * * * 

(b) Procedure and timeframe for filing 

a request. A request for reconsideration 

must be filed within 60 calendar days 

after receipt of the written organization 

determination notice. 

* * * * * 

(3) The date of receipt of the 

organization determination is presumed 

to be 5 calendar days after the date of 

the written organization determination, 

unless there is evidence to the contrary. 

(4) For purposes of meeting the 60- 

calendar day filing deadline, the request 

is considered as filed on the date it is 

received by the plan or delegated entity 

specified in the MA organization’s 

written organization determination. 

* * * * * 

■ 28. Section 422.626 is amended by: 

■ a. Revising paragraph (a)(2); and 

■ b. Removing paragraph (a)(3). 

The revision reads as follows: 

§ 422.626 Fast-track appeals of service 

terminations to independent review entities 

(IREs). 

(a) * * * 

(2) If an enrollee makes an untimely 

request to an IRE, the IRE accepts the 


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request and makes a determination as 

soon as possible, but the timeframe 

under paragraph (d)(5) of this section 

and the financial liability protection 

under paragraph (b) of this section do 

not apply. 

* * * * * 

■ 29. Section 422.633 is amended by 

revising paragraph (d)(1) to read as 

follows: 

§ 422.633 Integrated reconsiderations. 

* * * * * 

(d) * * * 

(1) Timeframe for filing. An enrollee 

has 60 calendar days after receipt of the 

adverse organization determination 

notice to file a request for an integrated 

reconsideration with the applicable 

integrated plan. 

(i) The date of receipt of the adverse 

organization determination is presumed 

to be 5 calendar days after the date of 

the integrated organization 

determination notice, unless there is 

evidence to the contrary. 

(ii) For purposes of meeting the 60- 

calendar day filing deadline, the request 

is considered as filed on the date it is 

received by the applicable integrated 

plan. 

* * * * * 

■ 30. Section 422.2267 is amended by: 

■ a. Revising paragraph (e)(31) and 

paragraph (e)(34) introductory text; 

■ b. Redesignating paragraph (e)(34)(iii) 

as paragraph (e)(34)(v); 

■ c. Redesignating paragraph (e)(34)(ii) 

as paragraph (e)(34)(iii); 

■ d. Adding a new paragraph (e)(34)(ii); 

■ e. Revising newly redesignated 

paragraph (e)(34)(iii); 

■ f. Adding paragraph (e)(34)(iv); 

■ g. Revising newly redesignated 

paragraph (e)(34)(v); and 

■ h. Adding paragraph (e)(42). 

The revisions and additions read as 

follows: 

§ 422.2267 Required materials and 

content. 

* * * * * 

(e) * * * 

(31) Notice of availability of language 

assistance services and auxiliary aids 

and services (notice of availability). This 

is a model communications material 

through which MA organizations must 

provide a notice of availability of 

language assistance services and 

auxiliary aids and services that, at a 

minimum, states that the MA 

organization provides language 

assistance services and appropriate 

auxiliary aids and services free of 

charge. 

(i) This notice of availability of 

language assistance services and 

auxiliary aids and services must be 

provided in English and at least the 15 

languages most commonly spoken by 

individuals with limited English 

proficiency of the relevant State and 

must be provided in alternate formats 

for individuals with disabilities who 

require auxiliary aids and services to 

ensure effective communication. 

(ii) If there are additional languages in 

a particular service area that meet the 5- 

percent service area threshold, 

described in paragraph (a)(2) of this 

section, beyond the languages described 

in paragraph (e)(31)(i) of this section, 

the notice of availability of language 

assistance services and auxiliary aids 

and services must also be translated into 

those languages. MA organizations may 

also opt to translate the notice in any 

additional languages that do not meet 

the 5-percent service area threshold, 

where the MA organization determines 

that this inclusion would be 

appropriate. 

(iii) The notice must be provided with 

all required materials under this 

paragraph (e). 

(iv) The notice may be included as a 

part of the required material or as a 

standalone material in conjunction with 

the required material. 

(v) When used as a standalone 

material, the notice may include 

organization name and logo. 

(vi) When mailing multiple required 

materials together, only one notice is 

required. 

(vii) The notice may be provided 

electronically when a required material 

is provided electronically as permitted 

under paragraph (d)(2) of this section. 

* * * * * 

(34) SSBCI disclaimer. This is model 

content and must be used by MA 

organizations that offer CMS-approved 

SSBCI as specified in § 422.102(f). In the 

SSBCI disclaimer, MA organizations 

must include the information required 

in paragraphs (e)(34)(i) through (iii) of 

this section. MA organizations must— 

* * * * * 

(ii) List the chronic condition(s) the 

enrollee must have to be eligible for the 

SSBCI offered by the MA organization. 

(A) If the number of condition(s) is 

five or fewer, then list all condition(s). 

(B) If the number of conditions is 

more than five, then list the top five 

conditions, as determined by the MA 

organization. 

(iii) Convey that even if the enrollee 

has a listed chronic condition, the 

enrollee will not necessarily receive the 

benefit because coverage of the item or 

service depends on the enrollee being a 

‘‘chronically ill enrollee’’ as defined in 

§ 422.102(f)(1)(i)(A) and on the MA 

organization’s coverage criteria for a 

specific SSBCI item or service required 

by § 422.102(f)(4). 

(iv) Meet the following requirements 

for the SSBCI disclaimer in ads: 

(A) For television, online, social 

media, radio, or other voice-based ads, 

either read the disclaimer at the same 

pace as or display the disclaimer in the 

same font size as the advertised phone 

number or other contact information. 

(B) For outdoor advertising (as 

defined in § 422.2260), display the 

disclaimer in the same font size as the 

advertised phone number or other 

contact information. 

(v) Include the SSBCI disclaimer in all 

marketing and communications 

materials that mention SSBCI. 

* * * * * 

(42) Mid-year supplemental benefits 

notice. This is a model communications 

material through which plans must 

inform each enrollee of the availability 

of any supplemental benefit the enrollee 

has not begun to use by June 30 of the 

plan year. 

(i) The notice must be sent on an 

annual basis, no earlier than June 30 of 

the plan year, and no later than July 31 

of the plan year. 

(ii) The notice must include the 

following content: 

(A) Mandatory supplemental benefits. 

For each mandatory supplemental 

benefit an enrollee has not used, the MA 

organization must include the same 

information about the benefit that is 

provided in the Evidence of Coverage. 

(B) Optional supplemental benefits. 

For each optional supplemental benefit 

an enrollee has not used, the MA 

organization must include the same 

information about the benefit that is 

provided in the Evidence of Coverage. 

(C) SSBCI. For plans that include 

SSBCI— 

(1) The MA organization must include 

an explanation of SSBCI available under 

the plan (including eligibility criteria 

and limitations and scope of the covered 

items and services) and must include 

point-of-contact information for 

eligibility assessments, including 

providing point-of-contact information 

(which can be the customer service line 

or a separate dedicated line), with 

trained staff that enrollees can contact to 

inquire about or begin the SSBCI 

eligibility determination process and to 

address any other questions the enrollee 

may have about the availability of 

SSBCI under their plan; 

(2) When an enrollee has been 

determined eligible for SSBCI but has 

not used SSBCI, the MA organization 

must include a description of the 

unused SSBCI for which the enrollee is 

eligible, and must include a description 

of any limitations on the benefit; and 


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(3) The disclaimer specified at 

paragraph (e)(34) of this section. 

(D) Additional notice information. 

The information about all supplemental 

benefits listed in the notice must 

include all of the following: 

(1) Scope of benefit. 

(2) Applicable cost-sharing. 

(3) Instructions on how to access the 

benefit. 

(4) Any applicable network 

information. 

(5) Supplemental benefits listed 

consistent with the format of the EOC. 

(6) A customer service number, and 

required TTY number, to call for 

additional help. 

■ 31. Section 422.2274 is amended by: 

■ a. In paragraph (a)— 

■ i. Revising paragraph (i) of the 

definition of ‘‘Compensation’’; and 

■ ii. Revising the definition of ‘‘Fair 

market value (FMV)’’; and 

■ b. Revising paragraphs (c)(5), (d)(1)(ii), 

(d)(2) introductory text, (d)(3) 

introductory text, and (e)(1) and (2). 

The revisions read as follows: 

§ 422.2274 Agent, broker, and other thirdparty requirements. 

* * * * * 

(a) * * * 

Compensation. (i) Includes monetary 

or non-monetary remuneration of any 

kind relating to the sale, renewal, or 

services related to a plan or product 

offered by an MA organization 

including, but not limited to the 

following: 

(A) Commissions. 

(B) Bonuses. 

(C) Gifts. 

(D) Prizes or Awards. 

(E) Payment of fees to comply with 

State appointment laws, training, 

certification, and testing costs. 

(F) Reimbursement for mileage to, and 

from, appointments with beneficiaries. 

(G) Reimbursement for actual costs 

associated with beneficiary sales 

appointments such as venue rent, 

snacks, and materials. 

(H) Any other payments made to an 

agent or broker that are tied to 

enrollment, related to an enrollment in 

an MA plan or product, or for services 

conducted as a part of the relationship 

associated with the enrollment into an 

MA plan or product. 

* * * * * 

Fair market value (FMV) means, for 

purposes of evaluating agent or broker 

compensation under the requirements of 

this section only, the amount that CMS 

determines could reasonably be 

expected to be paid for an enrollment or 

continued enrollment into an MA plan. 

(i) Beginning January 1, 2021, the 

national FMV is $539, the FMV for 

Connecticut, Pennsylvania, and the 

District of Columbia is $607, the FMV 

for California and New Jersey is $672, 

and the FMV for Puerto Rico and the 

U.S. Virgin Islands is $370. 

(ii) Beginning in 2025, the FMV will 

be increased to account for 

administrative payments included 

under the compensation rate, beginning 

at $31 and updated annually in 

compliance with this section. 

(iii) For subsequent years, FMV is 

calculated by adding the current year 

FMV and the produce of the current 

year FMV and MA growth percentage 

for aged and disabled beneficiaries, 

which is published for each year in the 

rate announcement issued in 

accordance with § 422.312. 

* * * * * 

(c) * * * 

(5) Ensure that no provision of a 

contract with an agent, broker, or other 

TPMO has a direct or indirect effect of 

creating an incentive that would 

reasonably be expected to inhibit an 

agent or broker’s ability to objectively 

assess and recommend which plan best 

fits the health care needs of a 

beneficiary. 

* * * * * 

(d) * * * 

(1) * * * 

(ii) MA organizations are limited to 

the compensation amounts outlined in 

this section. 

(2) Initial enrollment year 

compensation. For each enrollment in 

an initial enrollment year, MA 

organizations may pay compensation at 

FMV. 

* * * * * 

(3) Renewal compensation. For each 

enrollment in a renewal year, MA plans 

may pay compensation at a rate of 50 

percent of FMV. 

* * * * * 

(e) * * * 

(1) For plan years through 2024, 

Payments for services other than 

enrollment of beneficiaries (for example, 

training, customer service, agent 

recruitment, operational overhead, or 

assistance with completion of health 

risk assessments) must not exceed the 

value of those services in the 

marketplace. 

(2) Beginning in 2025, administrative 

payments are included in the 

calculation of enrollment-based 

compensation. 

* * * * * 

PART 423—VOLUNTARY MEDICARE 

PRESCRIPTION DRUG BENEFIT 

■ 32. The authority citation for part 423 

continues to read as follows: 

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

101 through 1395w–152, and 1395hh. 

■ 33. Section 423.4 is amended by 

adding definitions for ‘‘Biosimilar 

biological product’’ and 

‘‘Interchangeable biological product’’ in 

alphabetical order to read as follows: 

§ 423.4 Definitions. 

* * * * * 

Biosimilar biological product means a 

biological product licensed under 

section 351(k) of the Public Health 

Service Act (42 U.S.C. 262(k)) that, in 

accordance with section 351(i)(2) of the 

Public Health Service Act (42 U.S.C. 

262(i)(2)), is highly similar to the 

reference product, notwithstanding 

minor differences in clinically inactive 

components, and has no clinically 

meaningful differences between the 

biological product and the reference 

product, in terms of the safety, purity, 

and potency of the product. 

* * * * * 

Interchangeable biological product 

means a product licensed under section 

351(k) of the Public Health Service Act 

(42 U.S.C. 262(k)) that FDA has 

determined meets the standards 

described in section 351(k)(4) of the 

Public Health Service Act (42 U.S.C. 

262(k)(4)). 

* * * * * 

■ 34. Section 423.32 is amended by 

adding paragraph (h) to read as follows: 

§ 423.32 Enrollment process. 

* * * * * 

(h) Authorized representatives. As 

used in this subpart, an authorized 

representative is an individual who is 

the legal representative or otherwise 

legally able to act on behalf of an 

enrollee, as the law of the State in 

which the beneficiary resides may 

allow, in order to execute an enrollment 

or disenrollment request. 

(1) The authorized representative 

would constitute the ‘‘beneficiary’’ or 

the ‘‘enrollee’’ for the purpose of making 

an election. 

(2) Authorized representatives may 

include court-appointed legal guardians, 

persons having durable power of 

attorney for health care decisions, or 

individuals authorized to make health 

care decisions under State surrogate 

consent laws, provided they have the 

authority to act for the beneficiary in 

this capacity. 

■ 34. Section 423.38 is amended by: 

■ a. Revising paragraph (c)(4)(i); 

■ b. Redesignating paragraph (c)(35) as 

paragraph (c)(36); and 

■ c. Adding new paragraph (c)(35). 

The revision and addition read as 

follows: 


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§ 423.38 Enrollment periods. 

* * * * * 

(c) * * * 

(4) * * * 

(i) Except as provided in paragraph 

(c)(4)(ii) of this section, the individual is 

a full-subsidy eligible individual or 

other subsidy-eligible individual as 

defined in § 423.772, who is making a 

one-time-per month election into a PDP. 

* * * * * 

(35) The individual is making a onetime-per month election into a fully 

integrated dual eligible special needs 

plan as defined in § 422.2 of this 

chapter, a highly integrated dual eligible 

special needs plan as defined in § 422.2, 

or an applicable integrated plan as 

defined in § 422.561 of this chapter. 

* * * * * 

■ 35. Section 423.40 is amended by 

adding paragraph (f) to read as follows: 

§ 423.40 Effective dates. 

* * * * * 

(f) Beneficiary choice of effective date. 

If a beneficiary is eligible for more than 

one election period, resulting in more 

than one possible effective date, the Part 

D plan sponsor must allow the 

beneficiary to choose the election period 

that results in the individual’s desired 

effective date. 

(1) To determine the beneficiary’s 

choice of election period and effective 

date, the Part D plan sponsor must 

attempt to contact the beneficiary and 

must document its attempts. 

(2) If the Part D plan sponsor is unable 

to obtain the beneficiary’s desired 

enrollment effective date, the Part D 

plan sponsor must assign an election 

period using the following ranking of 

election periods: 

(i) ICEP/Part D IEP. 

(ii) MA–OEP. 

(iii) SEP. 

(iv) AEP. 

(v) OEPI. 

(3) If the Part D plan sponsor is unable 

to obtain the beneficiary’s desired 

disenrollment effective date, the Part D 

plan sponsor must assign an election 

period that results in the earliest 

disenrollment. 

■ 36. Section 423.100 is amended by: 

■ a. Adding in alphabetical order a 

definition for ‘‘Corresponding drug’’; 

■ b. Revising paragraph (3) of the 

definition of ‘‘Exempted beneficiary’’; 

and 

■ c Adding in alphabetical order a 

definition for ‘‘Maintenance change’’. 

The additions and revision read as 

follows: 

§ 423.100 Definitions. 

* * * * * 

Corresponding drug means, 

respectively, a generic or authorized 

generic of a brand name drug, an 

interchangeable biological product of a 

reference product, or an unbranded 

biological product marketed under the 

same biologics license application 

(BLA) as a brand name biological 

product. 

Exempted beneficiary * * * 

(3) Is being treated for cancer-related 

pain; or 

* * * * * 

Maintenance change means one of the 

following negative formulary changes 

with respect to a covered Part D drug: 

(1) Making any negative formulary 

changes to a drug within 90 days of 

adding a corresponding drug to the 

same or a lower cost-sharing tier and 

with the same or less restrictive prior 

authorization (PA), step therapy (ST), or 

quantity limit (QL) requirements (other 

than immediate substitutions that meet 

the requirements of § 423.120(e)(2)(i)). 

(2) Making any negative formulary 

changes to a reference product within 

90 days of adding a biosimilar biological 

product other than an interchangeable 

biological product of that reference 

product to the same or a lower costsharing tier and with the same or less 

restrictive PA, ST, or QL requirements. 

(3) Removing a non-Part D drug. 

(4) Adding or making more restrictive 

PA, ST, or QL requirements based upon 

a new FDA-mandated boxed warning. 

(5) Removing a drug deemed unsafe 

by FDA or withdrawn from sale by the 

manufacturer if the Part D sponsor 

chooses not to treat it as an immediate 

negative formulary change. 

(6) Removing a drug based on long 

term shortage and market availability. 

(7) Making negative formulary 

changes based upon new clinical 

guidelines or information or to promote 

safe utilization. 

(8) Adding PA to help determine Part 

B versus Part D coverage. 

* * * * * 

■ 37. Section 423.120 (as proposed to be 

amended at 87 FR 79727, December 27, 

2022) is amended by revising paragraph 

(e)(2)(i) to read as follows: 

§ 423.120 Access to covered Part D drugs. 

* * * * * 

(e) * * * 

(2) * * * 

(i) Immediate substitutions. A Part D 

sponsor may make negative formulary 

changes to a brand name drug, a 

reference product, or a brand name 

biological product within 30 days of 

adding a corresponding drug to its 

formulary on the same or lower cost 

sharing tier and with the same or less 

restrictive formulary prior authorization 

(PA), step therapy (ST), or quantity limit 

(QL) requirements, so long as the Part D 

sponsor previously could not have 

included such corresponding drug on its 

formulary when it submitted its initial 

formulary for CMS approval consistent 

with paragraph (b)(2) of this section 

because such drug was not yet available 

on the market, and the Part D sponsor 

has provided advance general notice as 

specified in paragraph (f)(2) of this 

section. 

* * * * * 

■ 38. Section 423.129 is added to read 

as follows: 

§ 423.129 Resolution of complaints in 

complaints tracking module. 

(a) Definitions. For the purposes of 

this section, the following terms have 

the following meanings: 

Assignment date is the date CMS 

assigns a complaint to a particular Part 

D sponsor in the Complaints Tracking 

Module. 

Complaints Tracking Module is an 

electronic system maintained by CMS to 

record and track complaints submitted 

to CMS about Medicare health and drug 

plans from beneficiaries and others. 

Immediate need complaint is a 

complaint involving a situation that 

prevents a beneficiary from accessing 

care or a service for which they have an 

immediate need. This includes when 

the beneficiary currently has enough of 

the drug or supply to which they are 

seeking access to last for 2 or fewer 

days. 

Urgent complaint is a complaint 

involving a situation that prevents a 

beneficiary from accessing care or a 

service for which they do not have an 

immediate need. This includes when 

the beneficiary currently has enough of 

the drug or supply to which they are 

seeking access to last for 3 to 14 days. 

(b) Timelines for complaint 

resolution—(1) Immediate need 

complaints. The Part D sponsor must 

resolve immediate need complaints 

within 2 calendar days of the 

assignment date. 

(2) Urgent complaints. The Part D 

sponsor must resolve urgent complaints 

within 7 calendar days of the 

assignment date. 

(3) All other complaints. The Part D 

sponsor must resolve all other 

complaints within 30 calendar days of 

the assignment date. 

(c) Timeline for contacting individual 

filing a complaint. Regardless of the 

type of complaint received, the Part D 

sponsor must contact the individual 

who filed a complaint within 3 calendar 

days of the assignment date. 

■ 39. Section 423.153 is amended by: 

■ a. Removing the phrase ‘‘paragraph 

(f)(8)(ii)’’ and adding in its place 


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‘‘paragraphs (f)(8)(ii) and (iii)’’ in 

paragraph (f)(8)(i) introductory text; 

■ b. Revising paragraph (f)(8)(i)(A); 

■ c. Redesignating paragraph (f)(8)(ii) as 

paragraph (f)(8)(iii); and 

■ d. Adding a new paragraph (f)(8)(ii). 

The revision and addition read as 

follows: 

§ 423.153 Drug utilization management, 

quality assurance, medication therapy 

management programs (MTMPs), drug 

management programs, and access to 

Medicare Parts A and B claims data 

extracts. 

* * * * * 

(f) * * * 

(8) * * * 

(i) * * * 

(A) Within 3 days of the date the 

sponsor makes the relevant 

determination. 

* * * * * 

(ii) In the case of a beneficiary who is 

determined by a Part D sponsor to be 

exempt, the sponsor must provide the 

alternate second notice within 3 days of 

the date the sponsor makes the relevant 

determination, even if such 

determination is made less than 30 days 

from the date of the initial notice 

described in paragraph (f)(5) of this 

section. 

* * * * * 

■ 40. Section 423.160 is amended by: 

■ a. Revising paragraphs (a)(2) and (3), 

(b), and (c); and 

■ b. Removing the section-level 

authority citation. 

The revisions read as follows: 

§ 423.160 Standards for electronic 

prescribing. 

(a) * * * 

(2) Except as provided in paragraph 

(a)(3) of this section, prescribers and 

dispensers that transmit, directly or 

through an intermediary, prescriptions 

and prescription-related information 

using electronic media (including 

entities transmitting prescriptions or 

prescription-related information where 

the prescriber is required by law to issue 

a prescription for a patient to a nonprescribing provider, such as a nursing 

facility, that in turn forwards the 

prescription to a dispenser), must 

comply with the applicable standards in 

paragraph (b) of this section when eprescribing for covered Part D drugs for 

Part D eligible individuals. 

(3)(i) Entities transmitting 

prescriptions or prescription-related 

information must utilize the NCPDP 

SCRIPT standard, consistent with 

paragraph (b)(1) of this section, in all 

instances other than temporary/ 

transient network transmission failures. 

(ii) Electronic transmission of 

prescriptions or prescription-related 

information by means of computergenerated facsimile is only permitted in 

instances of temporary/transient 

transmission failure and communication 

problems that would preclude the use of 

the NCPDP SCRIPT Standard adopted 

by this section. 

(iii) Entities may use either HL7 

messages or the NCPDP SCRIPT 

Standard to transmit prescriptions or 

prescription-related information 

internally when the sender and the 

recipient are part of the same legal 

entity. If an entity sends prescriptions 

outside the entity (for example, from an 

HMO to a non-HMO pharmacy), it must 

use the adopted NCPDP SCRIPT 

Standard or other applicable adopted 

standards. Any pharmacy within an 

entity must be able to receive electronic 

prescription transmittals for Medicare 

beneficiaries from outside the entity 

using the adopted NCPDP SCRIPT 

Standard. This exemption does not 

supersede any HIPAA requirement that 

may require the use of a HIPAA 

transaction standard within an 

organization. 

* * * * * 

(b) Standards—(1) Prescriptions, 

electronic prior authorization, and 

medication history. The communication 

of a prescription or prescription-related 

information must comply with a 

standard in 45 CFR 170.205(b) 

(incorporated by reference, see 

paragraph (c) of this section) for the 

following transactions, as applicable to 

the version of the standard in use: 

(i)(A) GetMessage. 

(B) Status. 

(C) Error. 

(D) RxChangeRequest and 

RxChangeResponse. 

(E) RxRenewalRequest and 

RxRenewalResponse. 

(F) Resupply. 

(G) Verify. 

(H) CancelRx and CancelRxResponse. 

(I) RxFill. 

(J) DrugAdministration. 

(K) NewRxRequest. 

(L) NewRx. 

(M) NewRxResponseDenied. 

(N) RxTransferInitiationRequest. 

(O) RxTransfer. 

(P) RxTransferConfirm. 

(Q) RxFillIndicatorChange. 

(R) Recertification. 

(S) REMSInitiationRequest and 

REMSInitiationResponse. 

(T) REMSRequest and 

REMSResponse. 

(U) RxHistoryRequest and 

RxHistoryResponse. 

(V) PAInitiationRequest and 

PAInitiationResponse. 

(W) PARequest and PAResponse. 

(X) PAAppealRequest and 

PAAppealResponse. 

(Y) PACancelRequest and 

PACancelResponse. 

(Z) PANotification. 

(ii) [Reserved] 

(2) Eligibility. Eligibility inquiries and 

responses between the Part D sponsor 

and prescribers and between the Part D 

sponsor and dispensers must comply 

with 45 CFR 162.1202. 

(3) Formulary and benefits. The 

National Council for Prescription Drug 

Programs Formulary and Benefits 

Standard, Implementation Guide, 

Version 3, Release 0 (Version 3.0), April 

2012 (incorporated by reference, see 

paragraph (c) of this section) or comply 

with a standard in 45 CFR 170.205(u) 

(incorporated by reference, see 

paragraph (c) of this section) for 

transmitting formulary and benefits 

information between prescribers and 

Medicare Part D sponsors. Beginning 

January 1, 2027, transmission of 

formulary and benefit information 

between prescribers and Medicare Part 

D sponsors must comply with a 

standard in 45 CFR 170.205(u) 

(incorporated by reference, see 

paragraph (c) of this section). 

(4) Provider identifier. The National 

Provider Identifier (NPI), as defined at 

45 CFR 162.406, to identify an 

individual health care provider to 

Medicare Part D sponsors, prescribers 

and dispensers, in electronically 

transmitted prescriptions or 

prescription-related materials for 

Medicare Part D covered drugs for 

Medicare Part D eligible individuals. 

(5) Real-time benefit tools. Part D 

sponsors must implement one or more 

electronic real-time benefit tools (RTBT) 

that are capable of integrating with at 

least one prescriber’s e-Prescribing (eRx) 

system or electronic health record (EHR) 

to provide complete, accurate, timely, 

clinically appropriate, patient-specific 

formulary and benefit information to the 

prescriber in real time for assessing 

coverage under the Part D plan. Such 

information must include enrollee costsharing information, clinically 

appropriate formulary alternatives, 

when available, and the formulary 

status of each drug presented including 

any utilization management 

requirements applicable to each 

alternative drug. Beginning January 1, 

2027, Part D sponsors’ RTBT must 

comply with a standard in 45 CFR 

170.205(c) (incorporated by reference, 

see paragraph (c) of this section). 

(c) Incorporation by reference. The 

material listed in this paragraph (c) is 

incorporated by reference into this 

section with the approval of the Director 

of the Federal Register under 5 U.S.C. 


ddrumheller on DSK120RN23PROD with PROPOSALS2
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552(a) and 1 CFR part 51. All approved 

incorporation by reference (IBR) 

material is available for inspection at 

the Centers for Medicare & Medicaid 

Services (CMS) and at the National 

Archives and Records Administration 

(NARA). Contact CMS at: CMS 7500 

Security Boulevard, Baltimore, 

Maryland 21244; phone: (410) 786–4132 

or (877) 267–2323; email: PartDPolicy@

cms.hhs.gov. For information on the 

availability of this material at NARA, 

visit www.archives.gov/federal-register/ 

cfr/ibr-locations or email fr.inspection@

nara.gov. The material may be obtained 

from National Council for Prescription 

Drug Programs, Incorporated, 9240 E. 

Raintree Drive, Scottsdale, AZ 85260– 

7518; phone: (480) 477–1000; email: 

info@ncpdp.org; website: 

www.ncpdp.org. 

(1) The National Council for 

Prescription Drug Programs Formulary 

and Benefits Standard, Implementation 

Guide, Version 3, Release 0 (Version 

3.0), published April 2012. 

(2) National Council for Prescription 

Drug Programs SCRIPT Standard, 

Implementation Guide Version 2017071, 

approved July 28, 2017. 

(3) National Council for Prescription 

Drug Programs SCRIPT Standard, 

Implementation Guide Version 2023011, 

published April 2023, (Approval Date 

for American National Standards 

Institute [ANSI]: January 17, 2023). 

(4) National Council for Prescription 

Drug Programs Real-Time Prescription 

Benefit Standard, Implementation Guide 

Version 13, published July 2023 

(Approval Date for ANSI: May 19, 2022). 

(5) National Council for Prescription 

Drug Programs Formulary and Benefit 

Standard, Implementation Guide 

Version 60, published April 2023 

(Approval Date for ANSI: April 12, 

2023). 

■ 40. Section 423.184 is amended by: 

■ a. Removing and reserving paragraph 

(g)(1)(ii); and 

■ b. Adding paragraph (h)(3). 

The addition reads as follows: 

§ 423.184 Adding, updating, and removing 

measures. 

* * * * * 

(h) * * * 

(3) Beginning with the 2025 

measurement year (2027 Star Ratings), 

Part D sponsor may request that CMS 

review its contract’s administrative data 

for Patient Safety measures provided 

that the request is received by the 

annual deadline set by CMS for the 

applicable Star Ratings year. 

* * * * * 

■ 41. Section 423.186 is amended by 

revising paragraph (f)(2)(i)(B) and 

adding paragraphs (f)(3)(viii)(A) and (B) 

to read as follows: 

§ 423.186 Calculation of Star Ratings. 

* * * * * 

(f) * * * 

(2) * * * 

(i) * * * 

(B) To determine a contract’s final 

adjustment category, contract 

enrollment is determined using 

enrollment data for the month of 

December for the measurement period 

of the Star Ratings year. 

(1) For the first 2 years following a 

consolidation, for the surviving contract 

of a contract consolidation involving 

two or more contracts for health or drug 

services of the same plan type under the 

same parent organization, the 

enrollment data for the month of 

December for the measurement period 

of the Star Ratings year are combined 

across the surviving and consumed 

contracts in the consolidation. 

(2) The count of beneficiaries for a 

contract is restricted to beneficiaries 

that are alive for part or all of the month 

of December of the applicable 

measurement year. 

(3) A beneficiary is categorized as LIS/ 

DE if the beneficiary was designated as 

full or partially dually eligible or 

receiving a LIS at any time during the 

applicable measurement period. 

(4) Disability status is determined 

using the variable original reason for 

entitlement (OREC) for Medicare using 

the information from the Social Security 

Administration and Railroad Retirement 

Board record systems. 

* * * * * 

(3) * * * 

(viii) * * * 

(A) In the case of contract 

consolidations involving two or more 

contracts for health or drug services of 

the same plan type under the same 

parent organization, CMS calculates the 

HEI reward for the surviving contract 

accounting for both the surviving and 

consumed contract(s). For the first year 

following a consolidation, the HEI 

reward for the surviving contract is 

calculated as the enrollment-weighted 

mean of the HEI reward of the 

consumed and surviving contracts using 

enrollment from July of the most recent 

measurement year used in calculating 

the HEI reward. A reward value of zero 

is used in calculating the enrollmentweighted mean for contracts that do not 

meet the minimum percentage of 

enrollees with the SRF thresholds or the 

minimum performance threshold 

specified at paragraph (f)(3)(vii) of this 

section. 

(B) For the second year following a 

consolidation when calculating the HEI 

score for the surviving contract, the 

patient-level data used in calculating 

the HEI score will be combined from the 

consumed and surviving contracts and 

used in calculating the HEI score. 

* * * * * 

■ 42. Section 423.503 is amended by 

revising paragraph (b)(1)(i)(A) and (C) to 

read as follows: 

§ 423.503 Evaluation and determination 

procedures. 

* * * * * 

(b) * * * 

(1) * * * 

(i) * * * 

(A) Was under an intermediate 

sanction under subpart O of this part, or 

a determination by CMS to prohibit the 

enrollment of new enrollees under 

§ 423.2410(c). 

* * * * * 

(C) Filed for or is currently in Federal 

or State bankruptcy proceedings. 

* * * * * 

■ 43. Section 423.505 is amended by 

revising paragraph (b)(22) to read as 

follows: 

§ 423.505 Contract provisions. 

* * * * * 

(b) * * * 

(22) As described in § 423.129, 

address and resolve complaints received 

by CMS against the Part D sponsor in 

the Complaints Tracking Module. 

* * * * * 

■ 44. Section 423.509 is amended by 

adding paragraph (f) to read as follows: 

§ 423.509 Termination of contract by CMS. 

* * * * * 

(f) Intermediate sanctions imposed 

with CMS termination. If CMS makes a 

determination to terminate a Part D 

sponsor’s contract under paragraph (a) 

of this section, CMS also imposes the 

intermediate sanctions at § 423.750(a)(1) 

and (3) in accordance with the following 

procedures: 

(1) The sanction will go into effect 15 

days after the termination notice is sent. 

(2) The Part D sponsor will have a 

right to appeal the intermediate sanction 

in the same proceeding as the 

termination appeal specified in 

paragraph (d) of this section. 

(3) A request for a hearing does not 

delay the date specified by CMS when 

the sanction becomes effective. 

(4) The sanction will remain in 

effect— 

(i) Until the effective date of the 

termination; or 

(ii) If the termination decision is 

overturned on appeal, when a final 

decision is made by the hearing officer 

or Administrator. 


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■ 45. Section 423.514 is amended by 

revising paragraph (a) introductory text 

and paragraph (a)(2) to read as follows: 

§ 423.514 Validation of Part D reporting 

requirements. 

(a) Required information. Each Part D 

plan sponsor must have an effective 

procedure to develop, compile, 

evaluate, and report to CMS, to its 

enrollees, and to the general public, at 

the times and in the manner that CMS 

requires, information indicating the 

following— 

* * * * * 

(2) The procedures related to and 

utilization of its services and items. 

* * * * * 

46. Section 423.582 is amended by 

revising paragraph (b) to read as follows: 

§ 423.582 Request for a standard 

redetermination. 

* * * * * 

(b) Timeframe for filing a request. 

Except as provided in paragraph (c) of 

this section, a request for a 

redetermination must be filed within 60 

calendar days after receipt of the written 

coverage determination notice or the atrisk determination under a drug 

management program in accordance 

with § 423.153(f). 

(1) The date of receipt of the coverage 

determination or at-risk determination 

is presumed to be 5 calendar days after 

the date of the written coverage 

determination or at-risk determination 

unless there is evidence to the contrary. 

(2) For purposes of meeting the 60- 

calendar day filing deadline, the request 

is considered as filed on the date it is 

received by the Part D plan sponsor or 

delegated entity specified in the Part D 

plan sponsor’s written coverage 

determination or at-risk determination. 

* * * * * 

47. Section 423.584 is amended by 

revising the paragraph (b) heading and 

adding paragraphs (b) introductory text 

and (b)(3) and (4) to read as follows: 

§ 423.584 Expediting certain 

redeterminations. 

* * * * * 

(b) Procedure and timeframe for filing 

a request. A request for redetermination 

must be filed within 60 calendar days 

after receipt of the written coverage 

determination notice or at-risk 

determination notice. 

* * * * * 

(3) The date of receipt of the coverage 

determination or at-risk determination 

is presumed to be 5 calendar days after 

the date of the written coverage 

determination or at-risk determination 

unless there is evidence to the contrary. 

(4) For purposes of meeting the 60- 

calendar day filing deadline, the request 

is considered as filed on the date it is 

received by the Part D plan sponsor or 

delegated entity specified the Part D 

plan sponsor’s written coverage 

determination or at-risk determination. 

* * * * * 

■ 48. Section 423.600 is amended by 

revising paragraph (a) to read as follows: 

§ 423.600 Reconsideration by an 

independent review entity (IRE). 

(a) An enrollee who is dissatisfied 

with the redetermination of a Part D 

plan sponsor has a right to a 

reconsideration by an independent 

review entity that contracts with CMS. 

The prescribing physician or other 

prescriber (acting on behalf of an 

enrollee), upon providing notice to the 

enrollee, may request an IRE 

reconsideration. The enrollee, or the 

enrollee’s prescribing physician or other 

prescriber (acting on behalf of the 

enrollee) must file a written request for 

reconsideration with the IRE within 60 

calendar days after receipt of the written 

redetermination by the Part D plan 

sponsor. 

(1) The date of receipt of the 

redetermination is presumed to be 5 

calendar days after the date of the Part 

D plan sponsor’s written 

redetermination, unless there is 

evidence to the contrary. 

(2) For purposes of meeting the 60- 

calendar day filing deadline, the request 

is considered as filed on the date it is 

received by the IRE specified in the Part 

D plan sponsor’s written 

redetermination. 

* * * * * 

■ 49. Section 423.2267 is amended by 

revising paragraph (e)(33) to read as 

follows: 

§ 423.2267 Required materials and 

content. 

* * * * * 

(e) * * * 

(33) Notice of availability of language 

assistance services and auxiliary aids 

and services (notice of availability). This 

is a model communications material 

through which Part D sponsors must 

provide a notice of availability of 

language assistance services and 

auxiliary aids and services that, at a 

minimum, states that the Part D sponsor 

provides language assistance services 

and appropriate auxiliary aids and 

services free of charge. 

(i) This notice of availability of 

language assistance services and 

auxiliary aids and services must be 

provided in English and at least the 15 

languages most commonly spoken by 

individuals with limited English 

proficiency of the relevant state and 

must be provided in alternate formats 

for individuals with disabilities who 

require auxiliary aids and services to 

ensure effective communication. 

(ii) If there are additional languages in 

a particular service area that meet the 5- 

percent service area threshold, 

described in paragraph (a)(2) of this 

section, beyond the languages described 

in paragraph (e)(33)(i) of this section, 

the notice of availability of language 

assistance services and auxiliary aids 

and services must also be translated into 

those languages. Part D sponsors may 

also opt to translate the notice in any 

additional languages that do not meet 

the 5-percent service area threshold, 

where the Part D sponsor determines 

that this inclusion would be 

appropriate. 

(iii) The notice must be provided with 

all required materials under this 

paragraph (e). 

(iv) The notice may be included as a 

part of the required material or as a 

standalone material in conjunction with 

the required material. 

(v) When used as a standalone 

material, the notice may include 

organization name and logo. 

(vi) When mailing multiple required 

materials together, only one notice is 

required. 

(vii) The notice may be provided 

electronically when a required material 

is provided electronically as permitted 

under paragraph (d)(2) of this section. 

* * * * * 

■ 50. Section 423.2274 is amended by: 

■ a. In paragraph (a): 

■ i. Revising paragraph (i) of the 

definition of ‘‘Compensation’’; and 

■ ii. Revising the definition of ‘‘Fair 

market value (FMV)’’; and 

■ b. Revising paragraphs (c)(5), (d)(1)(ii), 

(d)(2) introductory text, (d)(3) 

introductory text, and (e)(1) and (2). 

The revisions read as follows: 

§ 423.2274 Agent, broker, and other thirdparty requirements. 

* * * * * 

(a) * * * 

Compensation. (i) Includes monetary 

or non-monetary remuneration of any 

kind relating to the sale, renewal, or 

services related to a plan or product 

offered by a Part D sponsor including, 

but not limited to the following: 

(A) Commissions. 

(B) Bonuses. 

(C) Gifts. 

(D) Prizes or Awards. 

(E) Payment of fees to comply with 

State appointment laws, training, 

certification, and testing costs. 

(F) Reimbursement for mileage to, and 

from, appointments with beneficiaries. 


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(G) Reimbursement for actual costs 

associated with beneficiary sales 

appointments such as venue rent, 

snacks, and materials. 

(H) Any other payments made to an 

agent or broker that are tied to 

enrollment, related to an enrollment in 

a Part D plan or product, or for services 

conducted as a part of the relationship 

associated with the enrollment into a 

Part D plan or product. 

* * * * * 

Fair market value (FMV) means, for 

purposes of evaluating agent or broker 

compensation under the requirements of 

this section only, the amount that CMS 

determines could reasonably be 

expected to be paid for an enrollment or 

continued enrollment into a Part D plan. 

(i) Beginning January 1, 2021, the 

national FMV is 81. 

(ii) Beginning in 2025, the FMV will 

be increased to account for 

administrative payments included 

under the compensation rate, beginning 

at $31 and updated annually in 

compliance with this section. 

(iii) For subsequent years, FMV is 

calculated by adding the current year 

FMV and the produce of the current 

year FMV and Annual Percentage 

Increase for Part D, which is published 

for each year in the rate announcement 

issued under § 422.312 of this chapter. 

* * * * * 

(c) * * * 

(5) Ensure that no provision of a 

contract with an agent, broker, or other 

TPMO has a direct or indirect effect of 

creating an incentive that would 

reasonably be expected to inhibit an 

agent or broker’s ability to objectively 

assess and recommend which plan best 

fits the health care needs of a 

beneficiary. 

* * * * * 

(d) * * * 

(1) * * * 

(ii) Part D sponsors are limited to the 

compensation amounts outlined in this 

section. 

(2) Initial enrollment year 

compensation. For each enrollment in 

an initial enrollment year, Part D 

sponsors may pay compensation at 

FMV. 

* * * * * 

(3) Renewal compensation. For each 

enrollment in a renewal year, Part D 

sponsors may pay compensation at a 

rate of 50 percent of FMV. 

* * * * * 

(e) * * * 

(1) For plan years through 2024, 

Payments for services other than 

enrollment of beneficiaries (for example, 

training, customer service, agent 

recruitment, operational overhead, or 

assistance with completion of health 

risk assessments) must not exceed the 

value of those services in the 

marketplace. 

(2) Beginning in 2025, administrative 

payments are included in the 

calculation of enrollment-based 

compensation. 

* * * * * 

PART 460—PROGRAMS OF ALLINCLUSIVE CARE FOR THE ELDERLY 

(PACE) 

■ 51. The authority citation for part 460 

continues to read as follows: 

Authority: 42 U.S.C. 1302, 1395, 

1395eee(f), and 1396u–4(f). 

■ 52. Section 460.119 is added to read 

as follows: 

§ 460.119 Resolution of complaints in the 

complaints tracking module. 

The PACE organization must comply 

with requirements of §§ 422.125 and 

422.504(a)(15) of this chapter to, 

through the CMS complaints tracking 

module as defined in § 422.125(a) of this 

chapter, address and resolve complaints 

received by CMS against the PACE 

organization within the required 

timeframes. References to the MA 

organization or MA plan in those 

regulations must be read as references to 

the PACE organization. Nothing in this 

section should be construed to affect the 

PACE organization’s obligation to 

resolve grievances as described in 

§ 460.120. 

■ 53. Section 460.121 is amended by 

revising paragraph (b)(2) to read as 

follows: 

§ 460.121 Service determination process. 

* * * * * 

(b) * * * 

(2) Requests that do not constitute a 

service determination request. Requests 

to initiate, modify, or continue a service 

do not constitute a service 

determination request if the request is 

made prior to completing the 

development of the initial plan of care. 

For all requests identified in this 

section, the interdisciplinary team 

must— 

(i) Document the request; and 

(ii) Discuss the request during the care 

planning meeting, and either: 

(A) Approve the requested service and 

incorporate it into the participant’s 

initial plan of care; or 

(B) Document their rationale for not 

approving the service in the initial plan 

of care. 

* * * * * 

■ 54. Section 460.194 is amended by 

revising paragraph (b) to read as follows: 

§ 460.194 Corrective action. 

* * * * * 

(b) At their discretion, CMS or the 

State administering agency may monitor 

the effectiveness of corrective actions. 

* * * * * 

Title 45 

PART 170—HEALTH INFORMATION 

TECHNOLOGY STANDARDS, 

IMPLEMENTATION SPECIFICATIONS, 

AND CERTIFICATION CRITERIA AND 

CERTIFICATION PROGRAMS FOR 

HEALTH INFORMATION 

TECHNOLOGY 

■ 55. The authority citation for part 170 

continues to read as follows: 

Authority: 42 U.S.C. 300jj–11; 42 U.S.C 

300jj–14; 5 U.S.C. 552. 

■ 56. Section 170.205 is amended by: 

■ a. Revising paragraph (b); 

■ b. Adding paragraph (c); 

■ c. Adding a reserved paragraph (t); 

and 

■ d. Adding paragraph (u). 

The revision and additions read as 

follows: 

§ 170.205 Content exchange standards 

and implementation specifications for 

exchanging electronic health information. 

* * * * * 

(b) Electronic prescribing—(1) 

Standard. National Council for 

Prescription Drug Programs (NCPDP): 

SCRIPT Standard Implementation 

Guide; Version 2017071 (incorporated 

by reference in § 170.299). The 

Secretary’s adoption of this standard 

expires on January 1, 2027. 

(2) Standard. NCPDP SCRIPT 

Standard, Implementation Guide, 

Version 2023011 (incorporated by 

reference in § 170.299). 

(c) Real-time prescription benefit—(1) 

Standard. NCPDP Real-Time 

Prescription Benefit Standard, 

Implementation Guide, Version 13 

(incorporated by reference in § 170.299). 

(2) [Reserved] 

* * * * * 

(t) [Reserved] 

(u) Formulary and benefit—(1) 

Standard. NCPDP Formulary and 

Benefit Standard, Implementation 

Guide, Version 60 (incorporated by 

reference in § 170.299). 

(2) [Reserved] 

■ 57. Section 170.299 is amended by 

revising paragraph (k) to read as follows: 

§ 170.299 Incorporation by reference. 

* * * * * 

(k) National Council for Prescription 

Drug Programs (NCPDP), Incorporated, 

9240 E. Raintree Drive, Scottsdale, AZ 

85260–7518; phone (480) 477–1000; 


ddrumheller on DSK120RN23PROD with PROPOSALS2
78630 Federal Register / Vol. 88, No. 219 / Wednesday, November 15, 2023 / Proposed Rules 

email: info@ncpdp.org; website: 

www.ncpdp.org. 

(1) NCPDP SCRIPT Standard, 

Implementation Guide, Version 2017071 

(Approval Date for ANSI: July 28, 2017); 

IBR approved for § 170.205(b). 

(2) NCPDP SCRIPT Standard, 

Implementation Guide, Version 

2023011, April 2023, (Approval Date for 

ANSI: January 17, 2023); IBR approved 

for § 170.205(b). 

(3) NCPDP Real-Time Prescription 

Benefit Standard, Implementation 

Guide, Version 13, July 2023 (Approval 

Date for ANSI: May 19, 2022); IBR 

approved for § 170.205(c). 

(4) NCPDP Formulary and Benefit 

Standard, Implementation Guide, 

Version 60, April 2023 (Approval Date 

for ANSI: April 12, 2023); IBR approved 

for § 170.205(u). 

* * * * * 

Xavier Becerra 

Secretary, Department of Health and Human 

Services. 

[FR Doc. 2023–24118 Filed 11–6–23; 4:15 pm] 

BILLING CODE 4120–01–P 


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