25090 Federal Register / Vol. 87, No. 81 / Wednesday, April 27, 2022 / Proposed Rules 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Parts 400, 406, 407, 408, 410, 

423, 431, and 435 

[CMS–4199–P] 

RIN 0938–AU85 

Medicare Program; Implementing 

Certain Provisions of the Consolidated 

Appropriations Act, 2021 and Other 

Revisions to Medicare Enrollment and 

Eligibility Rules 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), Department 

of Health and Human Services (HHS). 

ACTION: Proposed rule. 

SUMMARY: This proposed rule would 

implement certain provisions of the 

Consolidated Appropriations Act, 2021 

(CAA). Additionally, CMS is proposing 

to delete references to specific Medicare 

forms from the text of existing 

regulations at §§ 406.7 and 407.11 in 

order to provide greater administrative 

flexibility. Finally, this proposed rule 

would update the various federal 

regulations that affect a state’s payment 

of Medicare Part A and B premiums for 

beneficiaries enrolled in the Medicare 

Savings Programs and other Medicaid 

eligibility groups. 

DATES: To be assured consideration, 

comments must be received at one of 

the addresses provided, no later than 5 

p.m. on June 27, 2022. 

ADDRESSES: In commenting, refer to file 

code CMS–4199–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 http://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–4199–P, P.O. Box 8013, Baltimore, 

MD 21244–4199. 

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–4199–P, Mail 

Stop C4–26–05, 7500 Security 

Boulevard, Baltimore, MD 21244–1850. 

[Note: This zip code is for express mail 

or courier delivery only. This zip code 

specifies the agency’s physical location.] 

You may submit comments on this 

document’s paperwork requirements by 

following the instructions at the end of 

the ‘‘Collection of Information 

Requirements’’ section in this 

document. 

For information on viewing public 

comments, see the beginning of the 

SUPPLEMENTARY INFORMATION section. 

FOR FURTHER INFORMATION CONTACT: 

Major Bullock, (410) 786–8974, or Steve 

Manning (410) 786–1961—General 

questions. 

Steve Manning, (410) 786–1961, or 

Carla Patterson (410) 786–8911—For 

inquiries related to section 120 of the 

CAA. 

Gail Sexton, (410) 786–4583, or Major 

Bullock, (410) 786–8974—For inquiries 

related to section 402 of the CAA. 

Melissa Heitt, 410–786–4494—For 

inquiries related to section 402(f) 

(Medicare Savings Programs) of the 

CAA. 

Carla Patterson, (410) 786–8911—For 

inquiries related to the Medicare 

enrollment form. 

Kim Glaun, (410) 786–3849—For 

inquiries related to state payment of 

Medicare premiums. 

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: http://

www.regulations.gov. Follow the search 

instructions on that website to view 

public comments. 

I. Summary 

A. Beneficiary Enrollment 

Simplification in Medicare Parts A and 

B—Overview 

1. Background 

Medicare is a Federal program to 

provide health insurance for people age 

65 and older, and those under 65 with 

certain disabilities or ESRD. Medicare 

consists of four distinct parts, 

commonly referred to as Medicare Parts 

A, B, C and D. Medicare Part A, 

sometimes referred to as hospital 

insurance (HI), covers inpatient hospital 

services, skilled nursing care, hospice 

care, and some home health services. 

Individuals must meet certain 

conditions to be entitled to Part A. 

Medicare Part B, or supplementary 

medical insurance (SMI), is an optional 

benefit that helps cover medically 

necessary services and supplies like 

physicians’ services, durable medical 

equipment, outpatient care, and other 

medical services that Part A does not 

cover, including many preventive 

services. Together, Medicare Parts A 

and B comprise ‘‘original’’ or 

‘‘traditional’’ Medicare. Most 

beneficiaries are automatically enrolled 

in Part A and Part B by the Social 

Security Administration (SSA) or the 

Railroad Retirement Board when they 

turn 65. In addition, if an individual has 

been receiving Social Security or 

Railroad Retirement Disability benefits 

for 24 months, they will automatically 

be enrolled by SSA or the Railroad 

Retirement Board in Medicare Parts A 

and B. 

The first opportunity individuals have 

to enroll in Part B is during their initial 

enrollment period (IEP). The IEP is a 7- 

month period that usually begins 3 

months before the month in which an 

eligible individual turns 65 and ends 3 

months after the first month of 

eligibility. The next opportunity for 

eligible individuals who do not enroll in 

Part B during their IEP to enroll in Part 

B, if they choose to do so, is in the 

general enrollment period (GEP) which 

runs from January 1st through March 

31st each year. Currently, an 

individual’s entitlement (coverage 

period effective date) under Part B 

depends on the enrollment period and 

the month in which the individual 

enrolls, according to the requirements in 

sections 1837 and 1838 of the Social 

Security Act (the Act). 

For those who enroll in Medicare Part 

B during any of the first 3 months of 

their IEP, coverage is effective the first 

month they become eligible for 

Medicare (such as age 65 or the 25th 

month of entitlement to monthly Social 

Security or railroad retirement benefits 

based on disability). However, for those 

who enroll in any of the last 4 months 

of their IEP, their coverage becomes 

effective after their month of 

enrollment, with the effective date of 

coverage varying depending on the 

month in which they enroll. 

For individuals subject to the current 

requirements at 42 CFR 407.10, and who 

enroll during the GEP, coverage is 

effective the July 1 following the month 

in which the individual enrolls. 

Example. An individual’s 65th 

birthday is April 10 and they first meet 

the eligibility requirements for 


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enrollment April 1. The individual’s 

initial enrollment period would extend 

from January through July in the year 

they turn 65. The month in which the 

individual enrolls in Part B determines 

the month in which their period of 

entitlement would begin, as follows: 

IEP enrollments 

during a month 

before 

January 1, 2023 

Entitlement begins on— 

January ............. April 1 (month eligibility requirements first met). 

February ............ April 1. 

March ................ April 1. 

April ................... May 1 (month following month of 

enrollment). 

May ................... July 1 (second month after month 

of enrollment). 

June .................. September 1 (third month after 

month of enrollment). 

July .................... October 1 (third month after 

month of enrollment). 

For individuals subject to the current 

requirements at 42 CFR 407.10, and who 

enroll during the GEP, coverage is 

effective the July 1 following the month 

in which he or she enrolls. 

2. Proposal Summary 

Section 120 of the Consolidated 

Appropriations Act, 2021 (CAA), Public 

Law (Pub. L.) 116–260, Division CC, 

title I, section 120 (December 27, 2020), 

modified the requirements in section 

1838 of the Act, pertaining to 

individuals enrolling in Part B after not 

being automatically enrolled, or who are 

re-enrolling in Part B after 

disenrollment. Specifically, the CAA 

revised sections 1838(a)(2)(C), 

1838(a)(3)(A), and 1838(a)(2)(D) of the 

Act to provide that for individuals who 

become eligible for Medicare on or after 

January 1, 2023, and enroll in Part B 

during the last 3 months of their IEP, 

entitlement would begin the first day of 

the month following the month in 

which they enroll. 

These changes enacted under section 

120 of the CAA will result in coverage 

under Part B that becomes effective 

sooner after an individual enrolls during 

the IEP, deemed IEP, or GEP. We expect 

these changes will simplify the 

enrollment process and reduce gaps in 

health care coverage, and make it easier 

for affected beneficiaries to understand 

the effective date of their Medicare 

coverage. We are proposing conforming 

changes to our regulations at 42 CFR 

part 407 to implement these Part B 

changes. In addition, while the statutory 

provisions of section 120 of the CAA 

primarily affect individuals enrolling in 

Part B, those changes will also affect the 

requirements applicable to the limited 

number of individuals enrolling in Part 

A who are not entitled to premium-free 

Part A. We are proposing conforming 

modifications to our regulations at 42 

CFR part 406 to reflect those Part A 

changes. 

Additionally, section 120 of the CAA 

established new section 1837(m) of the 

Act, which provides authority for the 

Secretary of the Department of Health 

and Human Services (HHS) (the 

Secretary) to establish SEPs for 

individuals who are eligible to enroll in 

Medicare and meet such exceptional 

conditions as the Secretary may 

provide, effective January 1, 2023. 

Corresponding changes in sections 

1838(g) and 1839(b) of the Act provide 

the Secretary the discretion to 

determine the effective date of 

entitlement for individuals who enroll 

under an SEP for exceptional 

conditions, and exempt individuals 

enrolling under such an SEP from being 

subject to a late enrollment penalty 

(LEP), respectively. We are proposing to 

establish several SEPs for exceptional 

conditions in this proposed rule, and 

would incorporate those SEPs in our 

regulations under 42 CFR parts 406 and 

407. 

B. Extended Coverage of 

Immunosuppressive Drugs for Certain 

Kidney Transplant Patients—Overview 

1. Background 

End-stage renal disease (ESRD) is a 

medical condition in which a person’s 

kidneys cease functioning permanently, 

leading to the need for a regular course 

of long-term dialysis or a kidney 

transplant to maintain life. A kidney 

transplant is ultimately considered the 

best treatment for ESRD. Section 226A 

of the Act includes a provision that 

enables certain individuals diagnosed 

with ESRD to be entitled to Medicare, 

regardless of age. If an individual with 

ESRD applies for Medicare and is 

entitled to Medicare Part A and eligible 

for Part B benefits, Medicare provides 

coverage for all covered medical 

services, not only those related to the 

kidney failure condition. When an 

individual receives a successful kidney 

transplant, Medicare coverage extends 

for 36 months after the month in which 

the individual receives the transplant. 

Currently, after the 36th month, 

Medicare coverage ends unless the 

individual is eligible for Medicare on 

another basis, such as age or disability. 

Medicare Part B covers medical and 

other health services including, as 

specified in section 1861(s)(2)(J) of the 

Act, prescription drugs used in 

immunosuppressive therapy furnished 

to an individual who receives an organ 

transplant for which Medicare payment 

is made. Kidney transplant recipients 

must take immunosuppressive drugs to 

help prevent their immune systems 

from rejecting the transplanted kidney. 

If a transplanted kidney is rejected, the 

individual would revert to ESRD status 

and again need dialysis treatment or 

another transplant. 

Under current law, Medicare Part B 

beneficiaries have coverage for such 

immunosuppressive drug therapy for as 

long as they remain eligible for and 

enrolled in Medicare Part B. However, 

section 226A(b)(2) of the Act currently 

requires that entitlement to Medicare 

Part A and eligibility to enroll under 

Part B for ESRD beneficiaries ends with 

the 36th month after the month in 

which the individual receives a 

successful kidney transplant (see also 42 

CFR 406.13(f)(2)). 

2. Proposal Summary 

Section 402 of the CAA amended 

sections 226A(b)(2) (and made 

conforming changes to sections 1836, 

1837, 1838, 1839, 1844, 1860D–1, 1902, 

and 1905 of the Act) to make certain 

individuals eligible for enrollment 

under Medicare Part B solely for 

purposes of coverage of 

immunosuppressive drugs described in 

section 1861(s)(2)(J) of the Act. Effective 

January 1, 2023, this provision would 

allow certain individuals whose 

Medicare entitlement based on ESRD 

would otherwise end after a successful 

kidney transplant to continue 

enrollment under Medicare Part B only 

for the coverage of immunosuppressive 

drugs described in section 1861(s)(2)(J) 

of the Act. These individuals would not 

receive Medicare coverage for any other 

items or services (under either Part A or 

Part B), and would only be eligible for 

immunosuppressive drug coverage 

under Part B if they are not enrolled in 

certain other types of coverage, as 

described in ‘‘Eligibility for the Part B– 

ID Benefit’’ (section II.B.2.b. this 

proposed rule). Section 402 of the CAA 

also amended the Medicare Savings 

Programs (MSPs) under sections 

1905(p)(1)(A) and 1902(a)(10)(E) of the 

Act to pay the Part B premiums and in 

some cases the costs of the Part B 

deductible and coinsurance for 

immunosuppressive drug coverage for 

certain low-income individuals. 

C. Simplifying Regulations Related to 

Medicare Enrollment Forms—Overview 

1. Background 

Individuals who receive monthly 

Social Security or railroad retirement 

benefits at age 65 or have been entitled 

to monthly Social Security or railroad 

retirement benefits based on disability 

benefits for more than 24 months, are 

automatically entitled to Part A and do 


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1Thirty-seven states (including the District of 

Columbia) also have buy-in agreements for Part A. 

not have to file a separate application in 

order to enroll in premium-free Part A. 

These individuals are automatically 

enrolled (auto-enrolled) by the Social 

Security Administration or the Railroad 

Retirement Board into Part A when they 

reach age 65 or their 25th month of 

entitlement to Social Security or 

railroad retirement benefits based on 

disability. Individuals who become 

eligible for premium-free Medicare but 

who are not auto-enrolled, either 

because they have delayed receiving 

Social Security or railroad retirement 

benefits, or are not eligible for such 

benefits but are otherwise eligible to 

receive premium-free Medicare part A 

based on paying the Medicare payroll 

tax, must file a separate application to 

enroll in Medicare. Individuals who 

decide to collect Social Security benefits 

after they reach age 65, and thus did not 

get auto-enrolled in Medicare by virtue 

of receiving Social Security benefits, 

may use their application for Social 

Security benefits, as defined in 42 CFR 

400.200, to apply for Medicare if they 

are eligible for Part A at that time. 

Individuals may also separately request 

enrollment in Part B by answering the 

Part B enrollment questions on an 

application for monthly Social Security 

retirement or spousal benefits. As an 

alternative, individuals may enroll in 

Part B by signing a simple statement of 

request, if they are eligible to enroll at 

that time. 

Currently, there are a total of seven 

enrollment forms for traditional 

Medicare—two enrollment forms for 

Part A and five enrollment forms for 

Part B, in §§ 406.7 and 407.11, 

respectively. Medicare enrollment forms 

are available to individuals via mail 

from CMS or SSA, downloadable via the 

CMS and SSA websites, or in person at 

SSA field offices. CMS and SSA 

periodically review the enrollment 

forms to determine if updates are 

necessary to comply with statutory, 

regulatory, or operational changes. Our 

regulations currently identify each form 

by name and provide a brief description 

of its uses. 

2. Proposal Summary 

We are proposing to remove 

references to individual enrollment 

forms from our regulations, including 

their titles and brief descriptions, to 

provide greater administrative flexibility 

in updating, adding, or removing forms 

in the future. We are also proposing to 

make technical edits to the text to state 

that an individual who files an 

application for monthly Social Security 

cash benefits as defined in § 400.200 

also applies for Medicare entitlement if 

he or she is eligible for hospital 

insurance at that time. 

D. Modernizing State Payment of 

Medicare Premiums—Overview 

1. Background 

Since the implementation of the 

original Medicare program in 1966, 

section 1843 of the Act has provided 

states the option to enter into an 

‘‘agreement’’ with the Federal 

government under which a state 

commits to enrolling certain Medicareeligible Medicaid beneficiaries into 

Medicare Part B with the state paying 

the Part B premiums on their behalf. 

Section 1903(a)(1) and (b) of the Act 

authorize federal financial participation 

(FFP) for such state payment of Part B 

premiums for certain dually eligible 

individuals. We have historically 

referred to this process as ‘‘state buyin.’’ All 50 states and the District of 

Columbia have buy-in agreements for 

Part B1 with the Secretary. 

States pay Medicare Part B premiums 

for approximately 10 million 

individuals and Part A premiums for 

approximately 700,000 individuals each 

year who are not entitled to Part A 

without a premium. For an individual 

who is eligible for but not yet enrolled 

in Medicare, state buy-in serves to both 

enroll the individual in Medicare and 

enable the Federal Government to bill 

the state for the new beneficiary’s 

Medicare premiums. For an individual 

who is already enrolled in Medicare, 

state buy-ins enable the Federal 

Government to bill the state for the 

individual’s Medicare premiums and 

stop collecting the premiums through 

deductions from the beneficiary’s 

monthly Social Security (Old Age 

Insurance or Disability benefits or 

Supplemental Security Income), 

Railroad Retirement Board (RRB), or 

Office of Personnel Management (OPM) 

benefits, or through CMS direct billing. 

The impact of state buy-in is 

significant for many beneficiaries. Lowincome individuals who receive 

assistance with Medicare premiums 

save critical funds to use for other 

necessities, including food and housing. 

Upon state buy-in, individuals who 

were paying the Medicare premiums 

through deductions from their Social 

Security benefits see a notable increase 

in their monthly social security checks 

(the standard Part B premium is $170.10 

per month in 2022), and individuals 

eligible but not enrolled in Medicare are 

able to enroll in the program and access 

Medicare services. 

2. Proposal Summary 

We are proposing changes to the state 

buy-in that would better align the 

regulations with federal statute, policy 

and operations that have evolved over 

time, including revising the regulations 

to provide that approved State plan 

provisions governing the buy-in process 

constitute a State’s buy-in agreement 

and limiting retroactive Medicare Part B 

premium liability for states for fullbenefit dually eligible beneficiaries. By 

clarifying and streamlining existing 

requirements, these proposals would 

improve the customer service 

experience of dually eligible 

beneficiaries pursuant to the Executive 

Order on Transforming Federal 

Customer Experience and Service 

Delivery to Rebuild Trust in Government 

and promote access to affordable health 

coverage and essential medical 

treatment and improve health equity for 

underserved populations consistent 

with the Executive Order On Advancing 

Racial Equity and Support for 

Underserved Communities Through the 

Federal Government. 

Together, these proposals not only 

implement provisions of the CAA, but 

also support President Biden’s 

Executive Order on Continuing to 

Strengthen Americans’ Access to 

Affordable, Quality Health Coverage, 

Executive Order on Transforming 

Federal Customer Experience and 

Service Delivery to Rebuild Trust in 

Government, Executive Order On 

Advancing Racial Equity and Support 

for Underserved Communities Through 

the Federal Government and Executive 

Order On Strengthening Medicaid and 

the Affordable Care Act by eliminating 

potentially confusing coverage waiting 

periods, allowing CMS and the Social 

Security Administration to remedy 

missed enrollment periods by allowing 

for SEPs for exceptional conditions and 

extending coverage of Medicare Savings 

Programs (MSPs) to include payment of 

premiums and cost-sharing for a new 

immunosuppressive drug coverage 

under Part B. 

II. Provisions of the Proposed Rule 

A. Proposals for Beneficiary Enrollment 

Simplification (§§ 406.21, 406.22, 

406.27, 406.33, 406.34, 407.22, 407.25, 

and 408.24) 

1. Effective Dates of Entitlement 

While the majority of individuals are 

automatically enrolled in Medicare 

Parts A and B upon reaching age 65 or 

when they have been entitled to 

monthly Social Security or railroad 

retirement benefits based on disability 

for more than 24 months, certain 


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individuals are required to take active 

steps to enroll. Specifically, individuals 

who are eligible for, but not receiving, 

monthly Social Security benefits under 

section 202 of the Act or qualified RRB 

benefits when they turn 65, are not autoenrolled because they have elected not 

to start receiving their Social Security or 

RRB benefits and have not filed an 

application for Social Security or RRB 

benefits and must take separate action to 

apply for Medicare. Certain individuals 

who are entitled to premium free Part A 

through government employment, but 

are not eligible for Social Security or 

RRB benefits also have to take action to 

apply for Medicare. Individuals may 

apply for Part A at any time, but can 

only apply for Part B during a specific 

enrollment period (IEP, GEP, or SEP). 

Further, under section 1818 of the Act, 

certain individuals who are not 

otherwise entitled to Part A but meet 

certain requirements, are eligible to 

enroll in Part A. These individuals are 

required to pay monthly premiums 

under section 1818(d) of the Act, and 

this benefit is frequently referred to as 

‘‘premium Part A.’’ These individuals 

are required to take active steps to enroll 

in premium Part A and Part B. 

As briefly described previously, the 

period during which these individuals 

are entitled to receive benefits under 

Medicare, also known as the coverage 

period, can vary depending on when the 

individual enrolls. The first opportunity 

individuals have to enroll in Part B is 

during their IEP. Section 1837(d) of the 

Act defines the IEP for most individuals 

who become eligible for Medicare on or 

after March 1, 1966. For these 

individuals, the IEP begins on the first 

day of the third month before the month 

the individual turns 65 and ends seven 

months later. Section 1837(d) of the Act 

also defines what is commonly referred 

to as the ‘‘deemed IEP.’’ When an 

individual fails to enroll during their 

IEP because of a belief, based on 

erroneous documentary evidence, that 

he or she had not yet attained age 65, 

section 1837(d) of the Act requires the 

Secretary to establish an IEP for such 

individual. Such individuals are 

considered ‘‘deemed’’ to have enrolled 

for purposes of section 1838(a)(3) of the 

Act, and these individuals are subject to 

entitlement periods consistent with 

those applied for individuals not subject 

to a deemed initial enrollment period 

under 42 CFR 407.14. 

Eligible individuals who do not enroll 

in Part B during their IEP or deemed 

IEP, or who disenroll from Part B and 

wish to re-enroll, must generally do so 

during the GEP. The GEP is established 

under section 1837(e) of the Act, and is 

the period beginning on January 1 and 

ending on March 31 of each year. 

Section 1838(a) of the Act establishes 

the beginning of entitlement for Part B 

for individuals who enroll in their IEP 

or GEP. According to the current 

requirements established under sections 

1838(a)(2)(A) and 1838(a)(3)(A) of the 

Act for individuals who become eligible 

to enroll in Medicare under section 

1836(a) of the Act before January 1, 

2023, and enroll during the first 3 

months of their IEP or deemed IEP, their 

entitlement would begin on the first day 

of the month they turn 65. For such 

individuals who enroll during the 

month in which they become eligible, 

sections 1838(a)(2)(B)(i) and 

1838(a)(3)(B)(i) of the Act currently 

specify that their entitlement begins 

with the first day of the month 

following the month in which they 

enroll. For such individuals who enroll 

in the month after the month in which 

they satisfy the requirements of section 

1836(a) of the Act, their entitlement 

would begin with the first day of the 

second month after the month in which 

they enroll under sections 

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

the Act. For such individuals who 

enroll in Medicare during the last 2 

months of their IEP or deemed IEP, their 

entitlement under Medicare would be 

effective beginning with the first day of 

the third month after the month in 

which he or she enrolls according to 

sections 1838(a)(2)(B)(iii) and 

1838(a)(3)(B)(i) of the Act. Finally, for 

such individuals who enroll in 

Medicare under the GEP in a month 

beginning before January 1, 2023, 

sections 1838(a)(2)(D)(1) and 

1838(a)(3)(B)(i) provide that their 

entitlement would begin with the first of 

July following their enrollment. 

Section 120(a)(1) of the CAA revised 

the entitlement periods for individuals 

who enroll in Medicare Part B in the last 

3 months of their IEP, deemed IEP, or 

during the GEP, beginning January 1, 

2023. Specifically, the CAA modified 

section 1838 of the Act such that revised 

section 1838(a)(2)(C) and (a)(3)(B)(ii) of 

the Act provide that for a Medicare 

eligible individual who satisfies the 

requirements of section 1836(a) of the 

Act in a month beginning on or after 

January 1, 2023, and who enrolls in the 

month in which they satisfy those 

requirements, or in any subsequent 

month of their IEP, the individual’s 

entitlement would begin with the first 

day of the month following the month 

of enrollment. The CAA also 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. 

We expect that these changes to the 

entitlement for individuals who enroll 

during their IEP or GEP are likely to 

increase access to continuous coverage 

under Medicare Part B, both by 

expediting these individuals’ 

entitlement dates and decreasing 

enrollees’ confusion about when their 

coverage becomes effective. Therefore, 

we anticipate this change having a 

positive impact on Medicare 

beneficiaries, including those in 

communities who may be 

disproportionately impacted by lack of 

continuous health coverage. 

Enrolls in IEP: Prior to 1/1/23—Entitlement begins on: On or after 1/1/23—Entitlement begins on: 

January ................................ April 1 (month eligibility requirements first met) ............. April 1 (month eligibility requirements first met). 

February ............................... April 1 .............................................................................. April 1. 

March ................................... April 1 .............................................................................. April 1. 

April ...................................... May 1 (month following month of enrollment) ................ May 1. 

May ...................................... July 1 (second month after month of enrollment) ........... June 1. 

June ..................................... September 1 (third month after month of enrollment) .... July 1. 

July ....................................... October 1 (third month after month of enrollment) ......... August 1. 

As shown in the chart, the changes 

made to section 1838(a) of the Act 

according to section 120 of the CAA 

directly affect the requirements for 

individuals enrolling in Part B. 

However, these changes will also impact 

certain individuals enrolling in Part A. 

Section 1818(c) of the Act specifically 

requires in part that the provisions of 

section 1838 of the Act apply to 

individuals enrolling in premium Part A 

for purposes of determining the period 


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2CMS has separate authority for Medicare Parts 

C and D under sections 1851(e)(4)(d) and 1860D– 

1(b)(3)(C) of the Act, respectively. 

of enrollment and other aspects of 

coverage. In light of this statute, the 

revised entitlement periods established 

in section 1838(a) of the Act will also 

apply to premium Part A enrollees. 

Therefore, to implement the changes 

to 1838(a) of the Act, we are proposing 

to revise language in both 42 CFR part 

406 (for premium Part A) and 42 CFR 

part 407 (for Part B). Specifically, we 

propose the following to reflect changes 

related to the start of entitlement for 

premium Part A IEP enrollments: 

• Section 406.22(a) would be revised 

to apply the existing requirements 

governing the entitlement period for 

individuals who are age 65 or older 

before January 1, 2023 who enroll in 

premium Part A during their IEP. 

• Existing § 406.22(b) would be 

redesignated as paragraph (c). New 

paragraph (b) would lay out the 

entitlement dates for individuals who 

attained age 65 on or after January 1, 

2023, and who enroll during their IEP, 

including a deemed IEP. Subparagraph 

(b)(1) would provide that for such 

individuals who enroll during the first 

3 months of their IEP, entitlement 

begins with the first month of eligibility. 

Subparagraph (b)(2) would specify that 

if such an individual enrolls during the 

last 4 months of their IEP, entitlement 

would begin with the month following 

the month in which they enrolled. 

• Newly redesignated § 406.22(c) 

would be revised to apply the existing 

entitlement date requirements for 

individuals under age 65 who became 

eligible for Medicare prior to January 1, 

2023. For individuals who enroll during 

the first 3 months of their IEP, 

entitlement would begin with the first 

month of eligibility. If an individual 

enrolls during the month in which they 

first become eligible, entitlement would 

begin with following month. If an 

individual enrolls in the month 

following the month of eligibility, 

entitlement would begin with the 

second month after the month of 

enrollment. If the individual enrolls 

more than one month after the month of 

eligibility, entitlement would begin with 

the third month after the month of 

enrollment. 

• New § 406.22(d) would set out the 

start dates for entitlement for 

individuals under age 65 who enroll in 

premium Part A on or after January 1, 

2023. For individuals enrolling during 

the first 3 months of their IEP, 

entitlement would begin with the first 

month of eligibility. If an individual 

enrolls during the last 4 months of their 

IEP, their entitlement would begin with 

the following month. 

We propose the following to reflect 

changes related to the start of 

entitlement for individuals enrolling in 

Part B during their IEP: 

• We would revise section 

407.25(a)(1) to apply the existing 

entitlement date requirements to 

individuals who first satisfy the Part B 

eligibility requirements before January 

1, 2023 and enroll during their IEP or 

deemed IEP. 

• Section 407.25(a)(2) would apply to 

individuals who first satisfy the Part B 

eligibility requirements on or after 

January 1, 2023. Entitlement for such 

individuals would begin with the first 

month of eligibility for enrollments 

made during the first 3 months of the 

IEP. We are proposing that 

§ 407.25(a)(2)(ii) would specify that if 

such an individual enrolls during the 

last 4 months of their IEP, entitlement 

would begin with the month following 

the month in which they enroll. 

Section 120(a)(1)(A) of the CAA also 

modified section 1838(a)(2) of the Act, 

to address the beginning of the 

entitlement for individuals enrolling 

during their GEP according to 1837(e) of 

the Act. We are proposing the following 

changes to reflect those requirements for 

individuals enrolling in premium Part 

A: 

• Section 406.21(c)(3) would be 

revised to reflect the revised entitlement 

periods for individuals who enroll or 

reenroll during a GEP. Specifically, 

§ 406.21(c)(3)(i) would require that for 

individuals who enroll or reenroll 

during a GEP prior to January 1, 2023, 

entitlement would begin July 1st 

following their enrollment, consistent 

with section 1838(a)(2)(D)(i) of the Act 

and the existing entitlement date 

requirements. Section 406.21(c)(3)(ii) 

would require that for individuals who 

enroll or reenroll during a GEP on or 

after January 1, 2023, entitlement would 

begin on the first day of the month after 

the month of enrollment, consistent 

with section 1838(a)(2)(D)(ii) of the Act. 

• Section 407.25(b)(1) would be 

revised to require that for individuals 

enrolling or reenrolling in Part B during 

a GEP before January 1, 2023, the 

current requirements governing the 

entitlement date would continue to 

apply. Specifically, revised 

§ 407.25(b)(1) would state that for all 

such individuals enrolling or 

reenrolling during a GEP before April 1, 

1981, or after September 30, 1981 and 

before January 1, 2023, entitlement 

would begin on July 1 of that calendar 

year. 

• New § 407.25(b)(3) would require 

that for individuals who enroll or 

reenroll in Part B during a GEP on or 

after January 1, 2023, entitlement would 

begin the first day of the month 

following the month of enrollment. 

We note that CMS would update all 

public facing materials to reflect date 

changes from any final rule. This would 

include updated information in CMS 

publications, on Medicare.gov, and in 

training materials. 

2. Special Enrollment Periods for 

Exceptional Conditions 

Under normal conditions, individuals 

who want to enroll in premium Part A, 

Part B, or both must submit a timely 

enrollment request during their IEP, the 

GEP, or an existing SEP for which they 

are eligible. Those who fail to enroll 

during their IEP may face a life-long 

penalty for late enrollment and a 

potential gap in coverage. Prior to the 

enactment of the CAA, CMS did not 

have broad authority to create SEPs 

based on exceptional conditions for 

enrollees in Medicare Parts A and B.2

Section 120(a)(2)(A) of the CAA 

established section 1837(m) of the Act 

to provide the Secretary with authority 

to establish SEPs for individuals who 

satisfy the requirements in paragraph (1) 

or (2) of section 1836(a) of the Act, and 

meet such exceptional conditions as the 

Secretary may provide, beginning 

January 1, 2023. Section 120 of the CAA 

also created section 1838(g) of the Act 

to provide the Secretary the discretion 

to determine the entitlement period for 

individuals who enroll pursuant to an 

SEP established according to section 

1837(m) of the Act, in a manner that 

protects the continuity of health benefit 

coverage to the extent practicable. The 

CAA also modified section 1839(b) of 

the Act to exempt individuals who 

enroll pursuant to an SEP for 

exceptional conditions established 

under section 1838(m) of the Act, from 

paying an LEP. Section 1818(c) of the 

Act provides that individuals enrolling 

under premium Part A are generally 

afforded the same enrollment 

opportunities as those available under 

Part B, so our proposals would apply to 

both premium Part A and Part B, except 

where noted. 

Several SEPs currently exist that 

permit individuals to enroll in premium 

Part A or Part B outside of the IEP or 

GEP. The existing SEPs are briefly 

described as follows: 

• Sections 1837(i)(1) through (3) of 

the Act provide an SEP for certain 

individuals who are enrolled in a 

qualified group health plan (GHP) or 

large GHP (LGHP) at the time they first 

become eligible for Medicare and elect 

not to enroll (or to be deemed enrolled) 

in Medicare during their IEP. 


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• Section 1837(i)(4) of the Act 

establishes an SEP for certain workers 

who are eligible for disability benefits. 

Specifically, an SEP is available to 

covered individuals who are enrolled in 

a GHP (based on their own current or 

former employment or the current or 

former employment of a family member) 

at the time they first become eligible for 

Medicare, and who elect not to enroll 

(or be deemed enrolled) during their 

IEP, when their continuous enrollment 

in such GHP is involuntarily 

terminated, provided certain other 

requirements are met. 

• The SEP for international 

volunteers, established under section 

1837(k) of the Act, establishes an SEP 

for individuals serving as volunteers 

outside the United States at the time 

they first become eligible for Medicare, 

through a program covering at least a 

12-month period, sponsored by a 

501(c)(3) tax exempt organization, and 

who demonstrate health insurance 

coverage while serving in the program. 

These international volunteers are 

eligible for an SEP, if they elect not to 

enroll (or be deemed enrolled) under 

section 1837 of the Act during their IEP 

or terminate Medicare enrollment 

during a month in which they are 

serving in such program. 

• Section 1837(l) of the Act 

establishes a 12-month SEP for certain 

individuals who are enrolled in 

TRICARE and become eligible to enroll 

in Part A on the basis of disability or 

ESRD status under sections 226(b) or 

226A of the Act, respectively, but who 

elect not to enroll (or to be deemed 

enrolled) during their IEP. 

We are proposing to establish new 

exceptional conditions SEPs under 

section 1837(m) of the Act in §§ 406.27 

and 407.23 of the regulations for 

Medicare parts A and B, respectively. 

These SEPs would be available to 

individuals who have missed an 

enrollment period due to a covered 

exceptional condition. Specifically, 

individuals who miss an IEP, GEP, or 

another SEP, such as the GHP SEP, due 

to a covered exceptional condition, 

would be eligible to enroll in Medicare 

premium Part A or Part B using the new 

SEPs. We believe our proposals will 

create the flexibility needed for eligible 

individuals to enroll in the program 

while simultaneously establishing 

parameters to ensure appropriate use of 

the new exceptional conditions SEPs. 

In determining what new exceptional 

conditions SEPs would be beneficial to 

the Medicare program and its 

beneficiaries and that should be 

established in regulations, CMS 

considered numerous factors including 

the following: 

• Whether the conditions that caused 

the individual to miss an enrollment 

period are ‘‘exceptional’’ as required 

under the CAA, and whether they are 

likely to be a one-time event. 

• The SEP should not create an 

incentive for individuals to delay timely 

enrollment into Medicare. 

• The SEP should not create an 

incentive for individuals to not educate 

themselves about the importance of 

enrolling in Medicare timely and make 

informed decisions during other 

available enrollment periods. 

• Whether an SEP would be the most 

appropriate resolution to the 

exceptional conditions in question and 

whether other remedies such as 

individualized equitable relief under 

section 1837(h) of the Act, would more 

appropriately apply. 

• The SEP should be expected to 

apply to a significant number or broad 

category of individuals, which would 

justify the establishment of a specific 

SEP in regulation instead of relying on 

the Secretary’s authority under section 

1837(h) of the Act to evaluate individual 

conditions and approve SEPs on a caseby-case basis. 

With these parameters in mind, we 

leveraged our previous program 

experience with Medicare enrollment in 

determining which SEPs to propose. We 

also considered the SEPs for exceptional 

conditions established under Medicare 

Parts C and D (section 1851(e)(4) of the 

Act), the Health Insurance Marketplace 

(29 U.S.C. 1163), and commercial health 

plans for insight into what SEPs are 

available in both public and private 

healthcare settings. Finally, we also 

considered whether the proposed new 

SEPs and the associated entitlement 

would protect access to continuous 

coverage for individuals eligible for 

Medicare Part A and Part B, such as 

through expediting individuals’ 

entitlement date or by creating 

opportunities for individuals to enroll 

in coverage sooner. 

Based on these considerations, CMS is 

proposing to establish five SEPs under 

Medicare Parts A and B based on the 

Secretary’s authority in section 1837(m) 

of the Act. Four of the proposed SEPs 

address specific exceptional conditions. 

One SEP would permit CMS or SSA to 

evaluate individuals’ particular 

conditions and grant SEPs on a case-bycase basis due to unanticipated 

conditions that may arise in the future. 

We anticipate these proposed changes 

would have a positive impact on 

Medicare beneficiaries, including those 

in communities impacted by lack of 

continuous health coverage. 

To accommodate these changes, we 

propose to establish a new § 406.27, 

entitled ‘‘Special enrollment periods for 

exceptional conditions’’ to provide SEPs 

for individuals who missed enrolling in 

premium Part A during an enrollment 

period due to exceptional conditions. 

Similarly, we propose to establish a new 

§ 407.23, also entitled ‘‘Special 

enrollment periods for exceptional 

conditions’’ to provide SEPs for 

individuals who missed enrolling in 

Part B during an enrollment period due 

to exceptional conditions. Both 

proposed §§ 406.27(a) and 407.23(a) 

would provide in part that the SEPs for 

exceptional conditions would be 

available beginning January 1, 2023. 

Specifically, the proposed SEPs for 

exceptional conditions would be 

applicable for exceptional conditions 

that took place on or after January 1, 

2023 with the exception of the SEP to 

Coordinate with Termination of 

Medicaid Coverage discussed in section 

II.2.d. of this proposed rule. 

Each of these SEPs would provide an 

opportunity for individuals to enroll 

without having to wait for the GEP. 

Individuals who enroll in Medicare Part 

A or Part B using an SEP for exceptional 

conditions and subsequently disenroll 

would have to wait until the next GEP 

or another SEP to reenroll and may 

potentially be subjected to a LEP. 

Late Enrollment Penalties Associated 

With Special Enrollment Periods for 

Exceptional Conditions 

Section 120(a)(2)(C)(ii) of the CAA 

modified section 1839(b) of the Act to 

provide that individuals who enroll 

during an SEP established under the 

Secretary’s authority under new section 

1837(m) of the Act are not subject to the 

LEP. Specifically, section 1839(b) of the 

Act, as amended, provides that an 

individual who enrolls in Medicare 

‘‘after his initial enrollment period 

[. . .] and not pursuant to a special 

enrollment period under subsection 

(i)(4), (l), or (m) of section 1837 [. . .] 

shall be increased by 10 percent of the 

monthly premium so determined for 

each full 12 months (in the same 

continuous period of eligibility) in 

which he could have been but was not 

enrolled.’’ Therefore, we propose that 

should an individual who missed an 

enrollment period due to an exceptional 

condition, enroll in premium Part A or 

Part B using one of the following SEPs, 

they would not be subject to a LEP. 

Specifically, we are proposing at 

§ 406.33(c)(2) that for enrollments on or 

after January 1, 2023 under one of the 

SEPs established pursuant to the 

Secretary’s authority in section 1837(m) 

of the Act and established in § 406.27, 

any months of non-coverage would be 

excluded from the calculation of the 


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LEP. Similarly, we are proposing at 

§ 408.24(b)(2) that for enrollments on or 

after January 1, 2023 under one of the 

SEPs established pursuant to the 

Secretary’s authority in section 1837(m) 

of the Act and established in § 407.23, 

any months of non-coverage would be 

excluded from the calculation of the 

LEP. 

We are also proposing changes to our 

regulations to reflect that certain 

individuals who reenroll in premium 

Part A or Part B would also be exempted 

from paying an LEP. Specifically, we are 

proposing under §§ 406.34(a) and 

408.24(c) that, for individuals who 

reenroll prior to January 1, 2023, the 

requirements currently in place for 

determining the months taken into 

account for purposes of calculating the 

LEP would continue to apply. In 

addition, we are proposing in 

§§ 406.34(e) and 408.24(d)(2)(ii) that for 

reenrollments on or after January 1, 

2023, pursuant to one of the SEPs for 

exceptional conditions established 

under the Secretary’s authority in 

section 1837(m) of the Act and 

promulgated in §§ 406.27 or 407.23, 

respectively, any months of noncoverage would be excluded from the 

calculation of the LEP. However, if the 

individual fails to enroll or reenroll 

during the available exceptional 

condition SEP, any months of noncoverage, including the months during 

the exceptional condition SEP, would 

be taken into consideration for 

calculating the LEP in accordance with 

§§ 406.33, 406.34, and 408.22. 

In the following sections, we discuss 

each of the proposed SEPs for 

exceptional conditions. 

a. SEP for Individuals Impacted by an 

Emergency or Disaster 

The severity and duration of extreme 

weather-related events and other 

emergencies can be difficult to 

accurately predict, but may strip 

individuals of their ability to carry out 

day-to-day activities. In many cases, 

impacted individuals need additional 

time after the end of an emergency to 

return to their normal routine. We know 

from program experience that these 

events can result in disruptions in mail 

delivery, SSA office closings, and 

operational delays at Social Security 

field offices, any of which can prevent 

individuals from submitting their 

enrollment applications in a timely 

manner. 

For Medicare Parts A and B, we have 

the authority under section 1837(h) of 

the Act to provide relief to individuals 

whose enrollment or non-enrollment in 

Part A or Part B was unintentional or 

erroneous and resulted from an error, 

misrepresentation or inaction by the 

federal government. Disrupted mail 

delivery and Social Security office 

closures due to disasters might justify 

relief under 1837(h) in some cases. For 

example, during the COVID–19 

pandemic, we utilized this equitable 

relief authority to provide assistance to 

individuals who missed their 

opportunity to enroll in Medicare 

during their IEP, GEP, or SEP. However, 

disasters or emergencies may interfere 

with individuals’ ability to enroll in 

Medicare without any error or inaction 

by the Federal government. As a result, 

these conditions would not meet the 

requirements for equitable relief under 

section 1837(h) of the Act. 

To address such exceptional 

conditions, we are proposing an SEP for 

individuals impacted by an emergency 

or disaster under the Secretary’s 

authority to establish SEPs beginning 

January 1, 2023, under section 1837(m) 

of the Act. Establishing such an SEP 

would permit the agency to provide 

immediate relief to individuals 

impacted by certain emergencies and 

disasters without being subject to the 

requirements applicable under our 

existing equitable relief authority. 

Providing an SEP for individuals who 

missed enrolling in Medicare during an 

enrollment period because they were 

impacted by an emergency or disaster 

will permit Medicare beneficiaries to 

maintain healthcare coverage and access 

healthcare services in times of 

disruption when healthcare may be 

most critical. We believe these effects 

would be most significant, and the 

proposed SEP for individuals impacted 

by and emergency or disaster would be 

most beneficial, for communities where 

social risk factors such as food, housing, 

or financial insecurity are prevalent. 

CMS is proposing, at new §§ 406.27(b) 

and 407.23(b), to create an SEP for 

individuals prevented from submitting a 

timely Medicare enrollment request by 

an emergency or disaster declared by 

either a Federal, state, or local 

government. These SEPs would apply 

for individuals enrolling in premium 

Part A or Part B and would eliminate 

potential gaps in coverage and 

otherwise applicable LEPs resulting 

from eligible individuals’ inability to 

submit a timely enrollment request as a 

result of emergency or disaster. 

At new §§ 406.27(b)(1) and 

407.23(b)(1), we propose this SEP would 

be available to those who were not able 

to enroll in premium Part A or Part B 

or both if they reside (or resided) in an 

area for which a Federal, state or local 

government entity newly declared a 

disaster or other emergency. The 

individual must demonstrate that they 

reside (or resided) in the area during the 

period covered by that declaration. We 

understand that not every emergency 

declaration would impact an 

individual’s ability to enroll in a timely 

manner. Therefore, we are specifically 

soliciting comments regarding this 

proposal, including whether CMS 

should limit the time frame of the SEP 

based on the type of emergency, or 

specify that the type of emergency must 

explicitly restrict an individual’s ability 

to enroll. 

At §§ 406.27(b)(2) and 407.23(b)(2), 

we propose that the SEP would begin on 

the date an emergency or disaster is 

declared, or if different, the start date 

identified in the declaration, whichever 

is earlier, so long as the date is on or 

after January 1, 2023. The SEP ends 2 

months after the end date identified in 

the disaster or emergency declaration or, 

if applicable, the end date of any 

extensions or the date when the 

declaration has been determined to have 

ended or has been revoked. The 

intention of having the SEP end 2 

months after the end of the declaration 

is to provide individuals enough time to 

recover from the emergency before 

needing to enroll in Medicare. 

We are proposing in §§ 406.27(b)(3) 

and 407.23(b)(3), according to the 

Secretary’s authority under section 

1838(g) of the Act to specify the 

coverage period for individuals 

enrolling during SEPs established under 

section 1837(m) of the Act, that the 

coverage period for individuals who 

enroll under this SEP would begin the 

first day of the month following the 

month of enrollment, so long as the date 

is on or after January 1, 2023. 

b. SEP for Health Plan or Employer 

Misrepresentation or Providing 

Incorrect Information 

As codified in § 406.6(c) of our 

regulations, some individuals are not 

auto-enrolled into Medicare, and thus 

must apply in order to enroll. Often, the 

primary source of information about 

Medicare for working aged individuals 

is their employer or the carrier of their 

GHP. CMS is aware of multiple 

instances in which individuals received 

erroneous information from their 

employer that resulted in the individual 

not enrolling in Part B timely and 

consequently they were assessed an 

LEP. CMS’s ability to offer assistance to 

individuals who are misinformed about 

Medicare enrollment periods by their 

employer or GHP is very limited. As a 

result, these individuals have 

historically faced gaps in coverage or 

been required to pay significant LEPs for 

the rest of their lives after failing to 

enroll in Part B based on 


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misrepresentation by an employer, GHP 

or a representative of such an entity. 

In order to provide relief to 

individuals who missed an enrollment 

period because of misrepresentation by 

or incorrect information from their 

employer or GHP, we are proposing to 

create a new SEP at § 406.27(c) and at 

§ 407.23(c) based on exceptional 

conditions. This SEP would apply for 

individuals whose non-enrollment in 

premium Part A or Part B is 

unintentional, inadvertent, or erroneous 

and results from material 

misrepresentation or reliance on 

incorrect information provided by the 

individual’s employer or GHP, or any 

person authorized to act on behalf of the 

employer or GHP. We are proposing at 

§§ 406.27(c)(1) and 407.23(c)(1) that an 

individual is eligible for such an SEP if 

they can demonstrate that he or she did 

not enroll in premium Part A or Part B 

during an enrollment period in which 

they were eligible based on information 

received from an employer or GHP, or 

any person authorized to act on such 

organization’s behalf, and an employer, 

GHP or their representative materially 

misrepresented information or provided 

incorrect information relating to 

enrollment in premium Part A or Part B, 

so long as the misrepresentation or error 

occurred on or after January 1, 2023. 

To demonstrate material 

misrepresentation, an individual would 

be required to provide documentation of 

the relevant misrepresentation to SSA. 

The documentation must show that the 

information was provided on or after 

January 1, 2023, was directly from an 

employer, GHP or their representative 

prior to an enrollment period, and that 

the inaccuracy caused the individual 

not to enroll timely. Examples of such 

evidence could be a letter from the 

employer or GHP that materially 

misrepresents the Medicare enrollment 

process or a letter from the employer or 

GHP acknowledging that they provided 

misinformation in a previous 

communication. An omission by the 

employer or GHP or the representative 

of such organization would not be 

considered a misrepresentation for 

purposes of this proposed SEP, as 

employers and GHPs do not have an 

affirmative responsibility to educate 

employees about Medicare. 

We are proposing at § 406.27(c)(2) and 

§ 407.23(c)(2) that this SEP would begin 

the day the individual notifies SSA of 

the employer or GHP misrepresentation 

or incorrect information provided, so 

long as the misrepresentation or error 

occurred on or after January 1, 2023, 

and would end 2 months later. 

Individuals would be required to 

provide SSA or CMS evidence that 

shows what misinformation was 

initially provided by the employer, 

GHP, or their representative. We are 

soliciting comments on whether we 

should require additional evidence, for 

example, evidence of what new 

information was received that caused 

discovery of the misinformation and 

evidence of when the discovery was 

made. Finally, at §§ 406.27(c)(3) and 

407.23(c)(3), we propose that the 

coverage period would begin the first 

day of the month following enrollment. 

c. SEP for Formerly Incarcerated 

Individuals 

Section 1862(a)(2) and (3) of the Act 

generally prohibits Medicare payment 

for covered services while the recipient 

is incarcerated, as the incarcerated 

individual is provided healthcare 

through their penal institution. Further, 

section 202(x)(1)(A) of the Act prohibits 

the payment of Old-age, Survivors, and 

Disability Insurance (OASDI) benefits to 

individuals who are incarcerated. 

Therefore, if an individual turns 65 and 

qualifies for Medicare while 

incarcerated (meaning the individual is 

in custody of penal authorities as 

described in 42 CFR 411.4(b)) and is not 

yet receiving OASDI benefits, that 

individual is not automatically enrolled 

in Medicare Part A. Moreover, current 

law does not provide any special 

enrollment opportunities for formerly 

incarcerated individuals who miss a 

Medicare enrollment period while 

incarcerated. If these individuals do not 

enroll into Medicare because they are 

incarcerated, they may go months 

without health coverage upon their 

release. For example, upon their release 

such individuals would only be able to 

enroll in Medicare during the GEP 

which could result in a significant delay 

in coverage. Further, delaying 

enrollment means that they may incur 

an LEP for premium Part A and/or Part 

B for the rest of their lives. Regardless 

of whether they are newly eligible for 

Medicare coverage or not, individuals 

who are incarcerated are required to 

begin and maintain their monthly 

premium payments for premium Part A 

and/or Part B to avoid termination of 

Medicare coverage. 

To address the exceptional conditions 

that an individual faces while 

incarcerated as described previously, 

and to ensure that formerly incarcerated 

individuals have access to health 

coverage under Medicare, we are 

proposing at §§ 406.27(d) and 407.23(d) 

an SEP for individuals who are released 

from incarceration on or after January 1, 

2023. This SEP would allow formerly 

incarcerated individuals to avoid 

potential gaps in coverage and late 

enrollment penalties. We propose at 

§§ 406.27(d)(1) and 407.23(d)(1) that an 

individual would be eligible for this 

SEP if they demonstrate that they are 

eligible for Medicare and failed to enroll 

or reenroll in Medicare premium Part A 

or Part B during another enrollment 

period in which they were eligible to 

enroll while they were incarcerated. 

Further, there must be a record of 

release either through discharge 

documents or data available to SSA. 

We propose at §§ 406.27(d)(2) and 

407.23(d)(2) that this SEP would start 

the day of the individual’s release from 

incarceration and end the last day of the 

sixth month after the month in which 

the individual is released from 

incarceration. We propose this duration 

because (1) it takes approximately 3 

months for OASDI payments to be 

reinstated upon an individual’s release 

from incarceration; and (2) data 

demonstrate that individuals with arrest 

or conviction records face barriers in 

obtaining employment. Such lack of 

income from employment or OASDI 

might dissuade formerly incarcerated 

individuals from enrolling in Medicare 

upon their release because of concerns 

about their ability to pay Medicare 

premiums and cost sharing. Formerly 

incarcerated individuals may 

experience social risk factors including 

financial, housing or food insecurity, 

social isolation, and other factors that 

can increase the likelihood of chronic 

physical or mental health conditions 

that require healthcare services. Lack of 

institutional support may impair the 

ability of formerly incarcerated persons 

from obtaining employment, housing, 

and other stabilizing supports necessary 

for successful reentry. Therefore, by 

providing this extended SEP duration, 

we ensure this at-risk population has 

adequate opportunity to enroll in 

Medicare. Further, we anticipate this 

change having a positive impact on 

formerly incarcerated Medicare 

beneficiaries, including those in 

communities who may be 

disproportionally impacted by a lack of 

continuous health coverage. 

Finally, at new §§ 406.27(d)(3) and 

407.23(d)(3), we propose that 

entitlement would begin the first day of 

the month after the month of 

enrollment, so long as it is after January 

1, 2023. 

d. SEP To Coordinate With Termination 

of Medicaid Coverage 

Many beneficiaries are enrolled in 

Medicaid when they initially qualify for 

Medicare at age 65, or if they are under 

age 65, after receiving 24 months of 

Social Security Disability Insurance 

(SSDI). While some of these individuals 


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3The adult group under § 435.119 (b) has an 

income limit of 133 percent of the FPL, but a basic 

standard deduction of 5 percent of the FPL is 

applicable as described in section 6012(a)(1) of the 

Internal Revenue Services Code. (See 42 CFR 

434.603(e).) 

4For information about the health outcomes of 

low-income Medicare beneficiaries, see HHS Office 

of the Assistant Secretary for Planning and 

Evaluation (2016, December). Social Risk Factors 

and Performance Under Medicare’s Value-Based 

Purchasing Programs. https://aspe.hhs.gov/sites/ 

default/files/migrated_legacy_files//171041/ 

ASPESESRTCfull.pdf. 

5See HHS Office of the Assistant Secretary for 

Planning and Evaluation. (2019, May 8). Loss of 

Medicare-Medicaid Dual Eligible Status: Frequency, 

Contributing Factors and Implications. https://

aspe.hhs.gov/reports/loss-medicare-medicaid-dualeligible-status-frequency-contributing-factorsimplications, page 38. 

6Recent HHS Office of Inspector General reports 

and state audits have cited cases in which states 

continued to provide coverage for many months 

after a change impacting eligibility was identified 

that should have prompted a redetermination. See 

for example: Louisiana Legislative Auditor. (2018, 

November 8). Medicaid Eligibility: Wage 

Verification Process of the Expansion Population. 

https://www.lla.la.gov/PublicReports.nsf/ 

1CDD30D9C8286082862583400065E5F6/$FILE/ 

0001ABC3.pdf; HHS Office of the Inspector General. 

(2019a, August). Colorado Did Not Correctly 

Determine Medicaid Eligibility for Some Newly 

Enrolled Beneficiaries. https://oig.hhs.gov/oas/ 

reports/region7/71604228.pdf; HHS Office of the 

Inspector General. (2019b, August). Illinois 

Medicaid Managed Care Organizations Received 

Capitation Payments After Beneficiaries’ Deaths. 

https://oig.hhs.gov/oas/reports/region5/ 

51800026.pdf; HHS Office of the Inspector General. 

(2019c, May). California Medicaid Managed Care 

Organizations Received Capitation Payments After 

Beneficiaries’ Deaths. https://oig.hhs.gov/oas/ 

reports/region4/41806220.pdf; HHS Office of the 

Inspector General. (2018d, October). Ohio Medicaid 

Managed Care Organizations Received Capitation 

Payments After Beneficiaries’ Deaths. https://

oig.hhs.gov/oas/reports/region5/51700008.pdf. 

7Under their buy-in agreements with CMS, some 

states are required to enroll all Medicaid 

beneficiaries in Medicare Part B and to pay the 

premiums on their behalf (known as ‘‘Part B buyin’’). If such a state has not completed the eligibility 

redetermination for an individual enrolled in the 

adult group before the first month they qualify for 

Medicare, the state must enroll the individual in 

Part B buy-in for all months in which the individual 

is enrolled in the adult group. CMS Manual for the 

State Payment of Medicare Premiums, chapter 1, 

section 1.4, https://www.cms.gov/files/document/ 

chapter-1-program-overview-and-policy.pdf. 

8See section II.D.3.e. of this proposed rule for a 

discussion of buy-in coverage groups available for 

Part B. 

9As described in section II.D.1. of this proposed 

rule, states can only pay the Part A premiums for 

individuals who enrolled in the Qualified Medicare 

Beneficiary (QMB) group. 

retain Medicaid coverage after becoming 

eligible for Medicare, others lose 

Medicaid benefits or eligibility entirely. 

For example, when an individual 

enrolled in the adult group under 

§ 435.119 becomes eligible for Medicare, 

they become ineligible for the Medicaid 

adult group. (Individuals enrolled in the 

adult group have an annual income 

below 138 percent of the Federal 

Poverty Level ($20,398 for an individual 

in 2022)).3 Unless such individuals are 

eligible for Medicaid on another basis, 

they will no longer be eligible for 

Medicaid. Many such individuals 

qualify for another Medicaid eligibility 

group, such as a Medicare Savings 

Programs (MSP) group, but others lose 

Medicaid coverage entirely because they 

do not qualify for another Medicaid 

eligibility group. 

Low-income Medicare beneficiaries 

experience poorer health outcomes than 

their higher-income counterparts.4

Based on program experience and 

reports from stakeholders, we are aware 

that some individuals who lose all 

Medicaid coverage after newly 

qualifying for Medicare may experience 

confusion and administrative barriers 

that undermine a seamless transition 

from Medicaid to Medicare coverage, 

risking a period of time without health 

insurance and a possible LEP for these 

at-risk individuals. 

Before terminating or reducing the 

scope of Medicaid coverage for 

individuals who become eligible for 

Medicare, the state Medicaid agency 

must conduct a redetermination of 

eligibility, including a determination of 

whether the individual is eligible for 

Medicaid upon another basis (42 CFR 

435.916(d) and 435.916(f)(1)). The state 

must continue the same level of 

Medicaid coverage until the state 

completes the eligibility 

redetermination and provides at least 10 

days advance notice and fair hearing 

rights in accordance with § 435.917 and 

42 CFR part 431 Subpart E. If during the 

redetermination process, an individual 

is found to no longer be eligible for the 

eligibility group under which they had 

been most recently receiving coverage, 

the state would then: (1) Move the 

individual to a different eligibility 

group, which could include an MSP 

eligibility group, for which the person is 

eligible; or (2) determine the 

individual’s potential eligibility for 

other insurance affordability programs, 

in accordance with § 435.916(f)(2), and 

terminate the individual’s Medicaid 

coverage. 

Despite these requirements, there are 

multiple scenarios that can prevent a 

seamless transition to Medicare 

coverage. States sometimes fail to 

complete redeterminations timely. 

Additionally, individuals sometimes 

lose coverage for procedural reasons (for 

example, failure to submit required 

paperwork in time) even though they 

likely remain eligible for Medicaid.5 In 

the first situation, while § 435.916(d) 

requires that states ‘‘promptly’’ conduct 

redeterminations based on changes in 

circumstances, including new eligibility 

for Medicare, we believe that some 

states do not complete redeterminations 

until months after the individual first 

becomes eligible for Medicare even 

though Medicare eligibility is generally 

predictable.6 If a state does not complete 

a redetermination when the beneficiary 

attains Medicare eligibility, an 

individual may retain Medicaid even 

though the individual no longer 

technically meets the Medicaid 

eligibility criteria. State Health 

Insurance Assistance Programs and 

beneficiary advocacy groups report that 

these individuals may then miss their 

IEP because they continue to be covered 

by Medicaid and may think they do not 

need or cannot afford Medicare coverage 

at that time, especially when 

individuals expect to be liable for 

Medicare premiums. While some states 

cover the Part B premiums for 

individuals remaining in the adult 

group pending a redetermination under 

their buy-in agreement,7 others do not.8

States cannot include the payment of 

the Part A premium for adult group 

beneficiaries in their buy-in agreement.9

During the ongoing Public Health 

Emergency in response to the 

Coronavirus Disease 2019 outbreak 

(COVID–19 PHE), as a condition of 

receiving the federal medical assistance 

percentage (FMAP) increase authorized 

by the Families First Coronavirus 

Response Act (FFCRA) (Pub. L. 116– 

127), states have been required to 

maintain Medicaid enrollment for 

nearly all individuals enrolled in 

Medicaid as of March 18, 2020, through 

the end of the month in which the PHE 

ends. This condition, known as the 

continuous enrollment requirement, 

applies to, among others, individuals 

who qualified during this time period in 

the adult group and subsequently 

became eligible for Medicare. In the 

preamble to the interim final rule with 

comment period published in the 

November 6, 2020 Federal Register (85 

FR 71142), CMS explained that states 

would be in compliance with the 

continuous enrollment requirement if 

they were to transition an adult group 

beneficiary who becomes eligible for 

Medicare to an MSP group for which 

such an individual is eligible (but that 

such an individual could not be 

transitioned to an MSP group if the 

individual did not meet the eligibility 

requirements for any MSP group). CMS 

articulated this policy after initially 

directing states that they had to retain 

such individuals in both the adult group 

and MSP groups in order to comply 


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10See CMS. COVID–19 Frequently Asked 

Questions (FAQs) for State Medicaid and Children’s 

Health Insurance Program (CHIP) Agencies. Last 

updated January 6, 2021, available at https://

www.medicaid.gov/state-resource-center/ 

downloads/covid-19-faqs.pdf. 

with the continuous enrollment 

requirement.10

Since the start of the COVID–19 PHE, 

beneficiary advocacy groups and State 

Health Insurance Assistance Programs 

have reported to us that a substantial 

number of beneficiaries who became 

eligible for Medicare while enrolled in 

the adult group may have interpreted 

states’ notifications that their Medicaid 

coverage would remain throughout the 

COVID–19 PHE (and the ensuing 

months of continuous coverage after 

they qualified for Medicare) to mean 

they did not need to take any action 

during the COVID–19 PHE to secure 

health coverage, including enrolling in 

Medicare. As mentioned previously, 

some beneficiaries who stay in the adult 

group are ineligible for coverage of their 

Part B premiums under state buy-in. 

Further, certain beneficiaries should 

have been enrolled in Medicare on the 

basis of their state’s buy-in agreement 

but were not because, although their 

state includes all Medicaid beneficiaries 

in their buy-in agreement for Part B 

premiums, the state may have been 

unclear this includes individuals whom 

states kept in the adult group on the 

basis of the continuous enrollment 

requirement. Consequently, some 

beneficiaries who maintained adult 

group eligibility are likely to have 

missed their IEPs as a result of 

confusion based on the COVID–19 PHE. 

Based on these reports, we are 

concerned that when the COVID–19 

PHE ends and states resume routine 

eligibility and enrollment operations for 

Medicaid, including taking action on 

pending applications, renewals, and 

redeterminations necessitated by 

changes in beneficiary circumstances, 

such individuals may end up being 

terminated from Medicaid and will 

experience a gap in coverage and lose 

access to critical health care as a result. 

Further, once they do enroll in 

Medicare, they may incur late 

enrollment penalties. 

As an existing requirement under the 

Medicaid program designed to 

maximize continuity of coverage for 

beneficiaries whom states have 

determined ineligible for Medicaid, 

states must determine or assess their 

potential eligibility for other Insurance 

Affordability Programs, such as the 

Children’s Health Insurance Program 

(CHIP) and health insurance coverage 

available on the Marketplace with 

financial assistance and transfer their 

accounts to such programs as 

appropriate under §§ 435.916(f)(2) and 

435.1200(e). Although Insurance 

Affordability Programs have not been 

defined to include Medicare, we believe 

promoting a seamless transition from 

Medicaid to Medicare coverage is also 

very important. The ability to enroll in 

Medicare can be vital in preventing gaps 

in health coverage, especially if 

individuals lack access to other health 

insurance and may be subject to an LEP 

when they do enroll in Medicare. 

To remove barriers that present an 

exceptional condition that could 

prevent individuals from transitioning 

from coverage under the Medicaid 

program to coverage under the Medicare 

program, we are proposing an SEP at 

§§ 406.27(e) and 407.23(e) for 

individuals who lose Medicaid 

eligibility entirely after the COVID–19 

PHE ends or on or after January 1, 2023 

(whichever is earlier) and have missed 

a Medicare enrollment period. We 

anticipate our proposals will advance 

health equity by improving low-income 

individuals’ access to continuous, 

affordable health coverage and use of 

needed health care consistent with the 

Executive Order on Advancing Racial 

Equity and Support for Underserved 

Communities Through the Federal 

Government and the Executive Order on 

Continuing to Strengthen Americans’ 

Access to Affordable, Quality Health 

Coverage. 

We are proposing at §§ 406.27(e)(1) 

and 407.23(e)(1) that to be eligible for 

this SEP, an individual must 

demonstrate they are eligible for 

Medicare and their Medicaid eligibility 

is terminated on or after January 1, 

2023, or is terminated after the last day 

of the COVID–19 PHE as determined by 

the Secretary, whichever is earlier. At 

§§ 406.27(e)(2)(i) and 407.23(e)(2)(i), we 

propose that if the termination of 

Medicaid eligibility occurs after the last 

day of the COVID–19 PHE and before 

January 1, 2023, the SEP starts on 

January 1, 2023 and ends on June 30, 

2023. At §§ 406.27(e)(2)(ii) and 

407.23(e)(2)(ii), we propose that if the 

termination of Medicaid eligibility 

occurs on or after January 1, 2023, the 

SEP starts when the beneficiary receives 

notice of an upcoming termination of 

Medicaid eligibility and ends 6 months 

after the termination of eligibility. We 

believe this extended duration would 

allow this at-risk population sufficient 

opportunity to enroll in Medicare. 

We note that unlike the other 

proposed SEPs for exceptional 

conditions, this SEP could apply to a 

circumstance that occurs before January 

1, 2023 (that is, if the end of the PHE 

and the individual’s Medicaid 

termination occur before such time). We 

believe that such a deviation is 

warranted in this limited circumstance 

given the novel COVID–19 outbreak and 

unprecedented federal, state and local 

efforts to combat it. As mentioned 

earlier, to comply with the continuous 

enrollment requirement under section 

6008 of FFRCA, states have kept 

substantial numbers of beneficiaries in 

the adult group for several months after 

they qualified for Medicare (more than 

2 years in some cases). As described 

previously, state notices regarding 

extended Medicaid eligibility and the 

provision of continuous enrollment may 

have contributed to confusion, causing 

many individuals to miss their IEP 

during the PHE. To minimize 

beneficiary burden and help reduce 

gaps in coverage from Medicaid-only to 

Medicare-only once states restore 

routine eligibility and enrollment 

operations, it is critical to provide this 

SEP to individuals who lose coverage 

after the PHE if that occurs before 

January 1, 2023. In short, the PHE 

presents a unique convergence of 

circumstances that will affect a defined 

group of individuals currently known to 

CMS. 

We propose at §§ 406.27(e)(3) and 

407.23(e)(3) that entitlement would 

begin the first day of the month 

following the month of enrollment, so 

long as it is effective after the end of the 

PHE or January 1, 2023, whichever is 

earlier. We note that individuals whose 

Medicaid eligibility is terminated after 

the end of the COVD–19 PHE, but before 

January 1, 2023 (if applicable), have the 

option of requesting that entitlement 

begin back to the first of the month 

following termination of Medicaid 

eligibility provided the individual pays 

the monthly premiums for the period of 

coverage. 

Lastly, we propose at §§ 406.27(e)(4) 

and § 407.23(e)(4) that individuals who 

otherwise would be eligible for this SEP, 

but enrolled during the COVID–19 PHE 

prior to January 1, 2023, if applicable, 

are eligible to have LEPs collected under 

§§ 406.32(d) or 408.22 reimbursed and 

ongoing penalties removed. Given the 

unique nature of this specific SEP, and 

the fact that we are proposing that 

individuals could be eligible for the SEP 

if the COVID–19 PHE ends before 

January 1, 2023, we believe it is 

appropriate and fair that these 

individuals not be subject to an LEP that 

would not have been collected had they 

known about this remedy at the time of 

enrollment. 

This proposed SEP would allow an 

individual who loses Medicaid 

eligibility entirely once the PHE ends or 

on or after January 1, 2023, if earlier, 


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and who has missed a Medicare 

enrollment period, to enroll in Medicare 

without a gap in coverage or an LEP. We 

anticipate that the SEP would most 

frequently apply to individuals who do 

not sign up for Medicare while they still 

have Medicaid, including those eligible 

in the adult group. At least initially, we 

suspect that the individuals who are 

most likely to need and use this 

proposed SEP are those who were in the 

Medicaid adult group under § 435.119, 

especially those individuals who 

remained in the adult group during the 

COVID–19 PHE and while pending an 

eligibility determination once normal 

operations resume because, for example, 

they believe they do not need additional 

coverage or cannot afford to pay the 

Medicare premiums. This SEP would 

apply to individuals who lose Medicaid 

coverage altogether, regardless of 

whether the Medicaid termination 

results from their new eligibility for 

Medicare, other changes in 

circumstances, or procedural reasons. 

As noted previously, an individual 

would need to have missed a Medicare 

enrollment period and if eligible, the 

SEP would be available once the 

individual is notified of their Medicaid 

termination. Further, individuals who 

are determined to no longer meet the 

eligibility requirements for one 

Medicaid eligibility group but are 

determined eligible for a separate 

Medicaid eligibility group that is 

included in their state’s buy-in 

agreement would not use this SEP 

because they do not need it as the state 

can already enroll them in Medicare 

without regard to Medicare enrollment 

periods and LEPs. 

We seek comment on the parameters 

of this proposed SEP, particularly 

whether the SEP’s duration (that is, the 

trigger, which is after the loss of 

Medicaid eligibility, rather than while 

the individual is still enrolled in 

Medicaid, as well as the end date for the 

SEP) and Medicare entitlement date 

(that is, earliest date Medicare benefits 

can start) prevent gaps in coverage and 

promote continuity of care for lowincome beneficiaries who lose Medicaid 

coverage after qualifying for Medicare. 

e. SEP for Other Exceptional Conditions 

CMS is proposing to retain the ability 

to provide SEPs on a case-by-case basis 

for other unanticipated situations that 

involve exceptional conditions and 

warrant an SEP. This SEP would allow 

us to grant SEPs on a case-by-case basis 

for circumstances we do not have 

enough experience to consider or 

anticipate that could create a barrier to 

enrollment. We acknowledge that there 

is no way to predict the full range of 

circumstances that would warrant an 

SEP—they are ‘‘exceptional’’—so we 

need this SEP for exceptional conditions 

to be timely in our response to 

beneficiaries with unique cases, given 

the time it takes to establish a more 

targeted SEP via rulemaking. There is a 

similar SEP under Medicare Part C and 

Part D, and we are leveraging our 

experience from those programs to 

afford beneficiaries who have unique 

exceptional conditions beyond their 

control that prevent them from enrolling 

in Medicare, an SEP. In addition, some 

of the SEPs that are now codified under 

Part C and Part D started out as case-bycase SEPs. We were able to use the 

information and experience gained as a 

basis for establishing a new SEP, 

through rulemaking, for a broad 

category of people corresponding to a 

more specific set of circumstances. 

Specifically, we are proposing to 

create an SEP for other exceptional 

conditions to provide individuals an 

opportunity to enroll in premium Part 

A, Part B or both. This SEP would 

provide an enrollment opportunity for 

individuals where conditions beyond 

their control caused them to miss an 

enrollment period and prevented them 

from timely enrolling in premium Part 

A or Part B or both during the IEP, GEP 

or other prescribed SEPs. This SEP 

would apply to individuals whose 

unique conditions do not qualify for one 

of the other proposed SEPs and would 

be proposed at new §§ 406.27(f) and 

407.23(f). We are proposing at 

§§ 406.27(f)(1) and 407.23(f)(1) that such 

SEPs would be granted on or after 

January 1, 2023, if two conditions are 

met. First, an individual must 

demonstrate that conditions outside of 

their control caused them to miss an 

enrollment period. Second, the 

condition must be determined 

exceptional in nature. 

Due to the numerous reasons an 

individual might request an SEP for 

other exceptional conditions, 

individuals may reasonably need 

different amounts of time to enroll in 

Medicare in the event an SEP is granted. 

Setting forth a specific duration for this 

SEP could disadvantage enrollees whose 

condition may require additional time. 

In light of these facts, at §§ 406.27(f)(2) 

and 407.23(f)(2), we propose that the 

SEP duration would be determined on 

a case-by-case basis. CMS believes that 

this SEP will be infrequently used and 

that it will only be granted in conditions 

that are truly exceptional in nature. This 

SEP will not be used to grant 

individuals enrollment due to 

forgetfulness or lack of knowledge. For 

example, an individual who turns 65 

and fails to enroll because they simply 

forgot to enroll during their IEP would 

not qualify for this proposed SEP as 

they do not have evidence that their 

situation that prevented them from 

enrolling timely was beyond their 

control nor was it exceptional in nature. 

Finally, consistent with the other SEPs 

we are proposing under section 1837(m) 

of the Act at §§ 406.27(f)(3) and 

407.23(f)(3) that entitlement would 

begin the first day of the month 

following the month of enrollment, and 

only for exceptional conditions that 

arise on or after January 1, 2023. 

f. Alternatives Considered 

As discussed previously, we 

considered several factors in 

determining which SEPs to propose 

under the new authority established by 

section 120 of the CAA. With these 

principles in mind, and to provide relief 

for individuals in truly exceptional 

conditions as directed by section 120 of 

the CAA, there were a number of SEPs 

that we considered but did not believe 

warranted establishing a separate SEP 

for exceptional conditions. For example, 

we considered an SEP for individuals 

who previously decided not to enroll in 

Medicare but now want to enroll 

outside of the GEP or other enrollment 

periods because they are experiencing a 

health event and want Medicare 

coverage. We decided not to propose an 

SEP for individuals in such conditions 

because there was not an exceptional 

condition that prevented the individual 

from enrolling during an earlier 

enrollment period; allowing enrollment 

outside of the GEP could provide an 

incentive for other individuals to delay 

enrollment in Medicare, which we 

believe is inconsistent with the statutory 

framework that imposes penalties for 

late enrollment. We also considered an 

SEP for individuals who lost Medicare 

coverage due to non-payment of 

premiums who are not eligible for 

another SEP or equitable relief and now 

want to re-enroll outside of the GEP. We 

opted not to propose this SEP because 

we did not want to create an 

environment where there could be 

cycles of an individual losing and 

reenrolling in Medicare based on 

whether they have paid their premiums. 

If a beneficiary is experiencing financial 

constraints, there are mechanisms in 

place (including state buy-in, MSP and 

premium payment plans) that would 

more appropriately provide support for 

affected individuals while ensuring 

continuity in their health care coverage. 

In order to be eligible for any of the 

SEPs other than the new exceptional 

condition SEPs, individuals must have 

had separate health insurance coverage 

when they first become eligible for 


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Medicare and have elected not to enroll 

(or to be deemed enrolled) during their 

IEP. To be consistent with the existing 

Medicare SEPs and to ensure 

appropriate use of the exceptional 

condition SEPs, we considered 

proposing a requirement that new SEPs 

would only be available to individuals 

who have missed their IEP due to an 

exceptional condition. However, 

because of the potential need to use the 

exceptional condition SEPs outside of 

the IEP and because section 1837(m) of 

the Act allows for additional flexibility 

to establish these SEPs we have not 

included this limitation. 

We welcome comments on our 

proposed changes to the coverage period 

dates and on our proposed SEPs for 

exceptional conditions. We note that we 

may establish additional SEPs for 

exceptional conditions through 

rulemaking in the future if experience 

demonstrates that additional SEPs 

would be necessary or beneficial. We 

also welcome recommendations for 

additional SEPs based on exceptional 

conditions. We request that any 

suggestions for additional SEPs for 

exceptional conditions include a robust 

discussion of why commenters believe 

the potential SEPs would be consistent 

with the policy considerations and 

guiding parameters discussed 

previously. 

3. Technical Correction to the 

Calculation of the Late Enrollment 

Penalty for Individuals Enrolling on or 

After January 1, 2023 

Currently, section 1839(b) of the Act 

specifies that the LEP is based on the 

number of months that have elapsed 

between the close of the individual’s 

IEP and the close of the enrollment 

period during which they enroll, plus 

certain additional months for 

individuals who reenroll. However, 

section 120(a)(3) of the CAA amended 

section 1839(b) of the Act to specify 

that, for enrollments on or after January 

1, 2023, the months that will be taken 

into account for purposes of 

determining any LEP include months 

which elapse between the close of the 

individual’s IEP and the close of the 

month in which they enroll, plus, for 

individuals who reenroll, the months 

that elapse between the date of 

termination of previous coverage and 

the close of the month in which the 

individual enrolls. We expect that these 

changes will decrease the number of 

months individuals are subject to the 

LEP. To implement these changes, we 

propose the following changes to our 

regulations: 

• At § 406.33, we propose to revise 

paragraph (a) to reflect the requirement 

that, for individuals enrolling for the 

first time, the existing Part A LEP 

calculation requirements continue to 

apply to enrollments before January 1, 

2023. 

• We also propose to redesignate 

paragraph (c) of § 406.33 as paragraph 

(d) and add new paragraph (c) to 

address the calculation of the LEP for 

individuals enrolling for the first time 

on or after January 1, 2023. Specifically, 

the introductory text of § 406.33(c) 

would require that the months to be 

counted for calculating the Part A LEP 

begin with the end of the individual’s 

IEP, and extend through the end of the 

month in which the individual enrolls. 

In proposed § 406.33(c)(1), we would 

continue to exclude certain months 

from the calculation of the LEP, based 

on the requirements currently in effect 

under § 406.33(a)(1) through (6). We are 

proposing to exclude additional months 

from the calculation of the LEP for 

enrollments on or after January 1, 2023 

at § 406.33(c)(2), however those changes 

are unrelated to the technical correction 

implemented under section 120(a)(3) of 

the CAA, and are discussed in greater 

detail in section II.A.2. of this proposed 

rule. 

• At § 408.24, we propose to revise 

paragraph (a) to apply the existing Part 

B LEP calculation months and 

exceptions to individuals who satisfy 

the requirements of § 408.24 before 

January 1, 2023. 

• At § 408.24, we also propose to 

redesignate paragraph (b) as paragraph 

(c) and add new paragraph (b) to 

address the calculation of the LEP for 

enrollments on or after January 1, 2023. 

Specifically, the paragraph at 

§ 408.24(b) would require that for 

individuals who satisfy the 

requirements of § 408.24 after January 1, 

2023, the months to be counted for 

calculating the Part B LEP begin with 

the end of the individual’s IEP, and 

extends through the end of the month in 

which the individual enrolls. In 

proposed § 408.24(b)(1), we would 

continue to exclude certain months 

from the calculation of the LEP, 

consistent with the requirements 

currently in effect under § 408.24 (a)(1) 

through (10). We are proposing to 

exclude additional months from the 

calculation of the LEP for enrollments 

on or after January 1, 2023 at 

§ 408.24(b)(2), however those changes 

are unrelated to the technical correction 

implemented under section 120(a)(3) of 

the CAA, and are discussed in greater 

detail in section II.A.2. of this proposed 

rule. 

• At § 406.34, we propose to revise 

paragraph (a) to reflect the requirement 

that, for individuals reenrolling in 

Premium Part A, the existing Part A LEP 

calculation requirements continue to 

apply to enrollments before January 1, 

2023. 

• At 406.34, we propose to 

redesignate paragraph (e) as paragraph 

(f) and add new paragraph (e) to address 

the calculation of the LEP for 

individuals reenrolling on or after 

January 1, 2023. Specifically, new 

§ 406.34(e)(1) would require that the 

months to be counted for calculating the 

Part A LEP begin with the end of the 

individual’s IEP and extend through the 

end of the month in which the 

individual reenrolls, and we would 

continue to include the months 

currently specified in paragraphs (b) 

and (d) of this section, as applicable, 

and the months from the end of the first 

period of entitlement through the end of 

the month during the GEP in which the 

individual reenrolled. In proposed 

§ 406.34(e)(2), we would exclude the 

months of non-coverage in accordance 

with an individual’s use of an 

exceptional condition SEP under 

§ 406.27. Those months are not counted 

for premium increases, provided the 

individual enrolls within the duration 

of the SEP. 

• We are also proposing coordinating 

changes related to the LEP for 

reenrollments at § 408.24. Specifically, 

we propose to amend § 408.24, to revise 

newly redesignated paragraph (c) to 

apply the existing Part B LEP 

calculation months and exceptions for 

reenrollments to individuals who satisfy 

the requirements of § 408.24 before 

January 1, 2023. New § 408.24(d) would 

require that for individuals who satisfy 

the requirements of § 408.24 after 

January 1, 2023, the months to be 

counted for calculating the Part B LEP 

include the number of months elapsed 

between the close of the individual’s 

IEP and the close of the month in which 

he or she first enrolled and the number 

of months elapsed between the 

individual’s initial period of coverage 

and the close of the month in which he 

or she reenrolled (as well as the number 

of months elapsed between each 

subsequent period of coverage and the 

close of the month in which he or she 

reenrolled). In proposed 

§ 408.24(d)(2)(i), we would continue to 

exclude certain months from the 

calculation of the LEP, consistent with 

the requirements currently in effect 

under § 408.24 (a)(1) through (10) and 

also excluding months before April 

1981 during which the individual was 

precluded from reenrolling by the twoenrollment limitation in effect before 

that date. Further, as discussed 

previously, an individual who missed 

an enrollment period due to an 


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11Under 42 CFR 406.13(b), ESRD means that 

stage of kidney impairment that appears irreversible 

and permanent and requires a regular course of 

dialysis or kidney transplantation to maintain life. 

12United States Renal Data System: 2018 USRDS 

Annual Data Report: Epidemiology of Kidney 

Disease in the United States, Bethesda, MD, 

National Institutes of Health, National Institute of 

Diabetes and Digestive and Kidney Diseases, 2018, 

from https://cjasn.asnjournals.org/content/14/3/ 

327. 

exceptional condition, and who enrolls 

in Part B using an exceptional condition 

SEP, would not be subject to a LEP. 

Therefore, we propose in 

§ 408.24(d)(2)(ii) that if an individual 

uses an exceptional condition SEP 

under § 407.23 any months of noncoverage would not be counted towards 

the calculation of the SEP, provided the 

individual enrolls within the duration 

of the SEP. 

B. Proposals for Extended Coverage of 

Immunosuppressive Drugs for Certain 

Kidney Transplant Patients (§§ 407.1, 

407.55, 407.57, 407.59, 407.62, 408.20, 

and 423.30) 

1. History and Definition of Benefit 

In 1972, Congress enacted section 

299I of the Social Security Amendments 

of 1972 (Pub. L. 92–603), which 

amended section 226 of the Act to allow 

qualified individuals with ESRD 11

under the age of 65, to enroll in the 

federal Medicare health care program, 

beginning in 1973. These requirements 

are now codified in section 226A of the 

Act and implemented in our regulations 

at 42 CFR 406.13. As mentioned earlier, 

section 226A(a) of the Act provides that 

certain individuals who are medically 

determined to have ESRD and apply for 

Medicare coverage are entitled to 

benefits under Medicare Part A and 

eligible to enroll in Part B. However, 

section 226A(b)(2) of the Act currently 

requires that an individual’s entitlement 

under Part A and eligibility under Part 

B based on ESRD status ends with the 

36th month after the month in which 

the individual receives a kidney 

transplant. 

The termination of Medicare 

entitlement has led to some 

beneficiaries losing coverage of 

immunosuppressive drugs that 

transplant patients would still need. Per 

the 2018 US Renal Data System 

(USRDS) Annual Report, 32 percent of 

kidney transplant recipients ages 45–64 

years old have no known or other 

creditable prescription drug coverage.12

Section 402(a) of the CAA established 

an exception that permits certain 

beneficiaries who were successful 

kidney transplant patients to receive a 

limited Part B benefit effective January 

1, 2023—covering only those 

immunosuppressive drugs described in 

section 1861(s)(2)(J) of the Act. Section 

402(b) of the CAA also amended section 

1836(b) of the Act to support limited 

eligibility under Part B for beneficiaries 

whose entitlement to insurance benefits 

under Part A ends by reason of section 

226A(b)(2). These individuals are 

eligible to enroll (or to be deemed 

enrolled) for the new Part B 

immunosuppressive drug benefit 

(herein referred to as the Part B–ID 

benefit). 

Not all Medicare kidney transplant 

patients who lose entitlement to Part A 

coverage based on section 226A(b)(2), 

however, are eligible to enroll in the 

new Part B–ID benefit. The CAA 

provided that certain individuals are not 

eligible to enroll in the new program. In 

general, if the individuals are enrolled 

in certain specific forms of health 

insurance or other programs that cover 

immunosuppressive drugs, the 

individuals would not be eligible to 

enroll in the Part B–ID benefit. We will 

discuss the excepted individuals and 

the specific forms of insurance and 

programs in greater detail in section 

II.B.2.b of this proposed rule entitled 

‘‘Determination of Eligibility’’ and in 

our proposed rule at § 407.55(b). 

Individuals that are seeking entitlement 

under the new Part B–ID benefit would 

also need to meet additional statutory 

criteria, as discussed in section II.B.2.b. 

of this proposed rule, and in the 

proposed rule at § 407.57. Individuals 

enrolled in the new Part B–ID benefit 

would not receive Medicare coverage for 

any other items or services, other than 

coverage of immunosuppressive drugs. 

Section 402 of the CAA made 

conforming amendments to sections 

1836, 1837, 1838, 1839, 1844, 1860D–1, 

1902, and 1905 of the Act. We discuss 

each of those changes elsewhere in this 

document, along with the corresponding 

proposals to modify our regulations in 

order to implement these changes. We 

are proposing to revise §§ 407.1, 408.20, 

410.30, 423.30 and establish a new 

Subpart D (§§ 407.55 through 407.65) in 

42 CFR part 407, entitled Part B 

Immunosuppressive Drug Benefit to 

implement the new Part B–ID benefit. 

Sections 226A, 1836(b) and 1837(n) of 

the Act provide the statutory authority 

for this new, limited Medicare 

entitlement program, and we are 

proposing to add a description of this 

basis for the Part B–ID benefit at 

§ 407.1(a)(6). We specifically propose in 

§ 407.1(a)(6) that, sections 1836(b) and 

1837(n) of the Act will provide for 

coverage of immunosuppressive drugs 

as described in section 1861(s)(2)(J) of 

the Act under Part B beginning on or 

after January 1, 2023. Coverage of 

immunosuppressive drugs would be for 

eligible individuals whose benefits 

under Medicare Part A and eligibility to 

enroll in Part B on the basis of ESRD 

would otherwise end with the 36th 

month after the month in which the 

individual receives a kidney transplant 

by reason of section 226A(b)(2) of the 

Act. 

We are also proposing to revise 

§ 407.1(b) and establish a new paragraph 

(2) to incorporate the eligibility, 

enrollment, and entitlement 

requirements for the Part B–ID benefit 

within the scope of part 407. We 

specifically propose to revise § 407.1(b) 

to retain the language that states that 

part 407 sets forth the eligibility, 

enrollment, and entitlement 

requirements and procedures for 

supplementary medical insurance at 

§ 407.1(b)(1), including the reference to 

the rules governing premiums in part 

408 of this chapter. At new § 407.1(b)(2), 

we propose to add language stating that 

this part also sets forth the eligibility, 

enrollment, and entitlement 

requirements and procedures for the 

immunosuppressive drug benefit 

provided for under sections 1836(b) and 

1837(n) of the Act, including the short 

title for the Part B-immunosuppressive 

drug benefit (Part B–ID). 

The Part B–ID benefit is unique 

because it is available to a defined 

subset of Medicare beneficiaries and 

provides coverage only for 

immunosuppressive drugs. Since 

immunosuppressive drug therapy is a 

Part B benefit under section 1861(s)(2)(J) 

of the Act, certain rules and 

requirements applicable to Part B apply 

to the Part B–ID benefit. Where there are 

specific differences, we address them in 

this rulemaking. 

2. Part B–ID Benefit Eligibility, 

Enrollment, Entitlement, and 

Termination 

a. Eligibility for the Part B–ID Benefit 

Section 402(a)(2) of the CAA adds 

section 1836(b) of the Act, which 

establishes specific eligibility criteria for 

the Part B–ID benefit. Subject to 

exceptions, new section 1836(b)(1) of 

the Act provides that individuals whose 

entitlement to insurance benefits under 

Part A ends (whether before, on, or after 

January 1, 2023) by reason of section 

226A(b)(2), and who meet certain 

additional requirements, would be 

eligible to enroll (or to be deemed 

enrolled) in Part B solely for purposes 

of coverage of immunosuppressive 

drugs in accordance with section 

1837(n) of the Act. The principal 

limitations on eligibility for the Part B– 

ID benefit are set out in new section 


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1836(b)(2) of the Act. Under section 

1836(b)(2)(A) of the Act, individuals 

enrolled in certain other types of health 

coverage would not be eligible for the 

Part B–ID benefit. As discussed in 

greater detail in this section, we are 

proposing to specify that an individual 

who has such other health coverage 

would not be eligible for the Part B–ID 

benefit in § 407.55(b). 

b. Determination of Eligibility 

Section 1836(b)(2)(B)(i) of the Act 

requires the Secretary, in coordination 

with the Commissioner of Social 

Security (Commissioner), to establish a 

process for determining whether an 

individual who is to be enrolled, or 

deemed to be enrolled, in the Part B–ID 

benefit meets the requirements for such 

enrollment, including the requirement 

that the individual not be enrolled in 

other health coverage that would make 

them ineligible for the Part B–ID benefit 

under 1836(b)(2)(A) of the Act. 

In order for an individual to be 

enrolled in the Part B–ID benefit, 

section 1836(b)(2)(B)(ii)(I) of the Act 

requires that an individual provide to 

the Commissioner an attestation that 

they are not enrolled and do not expect 

to enroll in the excepted coverage, as 

described in section II.B.2.a. of this 

proposed rule (‘‘Eligibility for the Part 

B–ID Benefit’’), that would make the 

individual ineligible for the Part B–ID 

benefit under section 1836(b)(2)(A) of 

the Act. Section 1836(b)(2)(B)(ii)(II) of 

the Act requires that the individual 

notify SSA within 60 days of enrollment 

in such excepted coverage. Based on 

these requirements, we are proposing at 

§ 407.59(a) and (b), that all prospective 

enrollees in the Part B–ID benefit must 

provide to the Commissioner, in the 

form and manner specified by CMS and 

SSA in the final rule, an attestation that 

the individual is not enrolled and does 

not expect to enroll in other health 

coverage that would make the 

individual ineligible for the Part B–ID 

benefit, and that the individual agrees to 

notify the Commissioner within 60 days 

of enrollment in such other coverage as 

described in § 407.55(b). 

Individuals who currently have 

Medicare entitlement based on ESRD, 

and whose coverage would be 

terminated 36 months after the month of 

a successful transplant, are notified in 

advance of the 36-month termination by 

SSA. We refer to such notices as ‘‘pretermination notices.’’ We plan to 

include information about the Part B–ID 

benefit in this pre-termination notice 

and include instructions for individuals 

to enroll in the Part B–ID benefit, 

including how to provide the required 

attestation. 

We are proposing that beneficiaries 

will be able to primarily use a verbal 

(telephonic) attestation as part of 

enrolling in the Part B–ID benefit. 

Generally, for the verbal attestation, an 

individual would contact SSA, and an 

SSA representative, using a standard 

script, will convey the requirements to 

the individual that are in the CMS– 

10798 attestation form, described in 

§ 407.59 of this proposed rule. The 

individual will then attest that the 

individual does not have coverage 

under any of the specified health 

programs or insurance. The individual 

will also affirm that the statement 

provided was true and correct and that 

the individual acknowledged that there 

may be criminal penalties for making a 

false statement for purposes of obtaining 

these Medicare benefits. After the 

individual provides the oral attestation, 

the SSA representative will document 

the content of the call, and the 

document will be retained as required 

under SSA processes. 

Having interested beneficiaries call 

SSA to attest and enroll is the simplest 

and most efficient method, and would 

avoid potential delays in an individual 

mailing a signed written statement that 

could potentially result in a delay in the 

individual continuing to receive this 

vital coverage of these necessary drugs. 

Using a verbal attestation and 

enrollment process also aligns with the 

President’s December 13, 2021 

Executive Order, titled Executive Order 

on Transforming Federal Customer 

Experience and Service Delivery to 

Rebuild Trust in Government, which, 

among other things, directs Federal 

agencies to improve the public’s 

experience of interacting with agency 

services. Of particular relevance, the 

executive order directs the 

Commissioner of SSA to provide a 

report that identifies potential 

opportunities for policy reforms that can 

support modernized customer 

experiences while ensuring original or 

physical documentation requirements 

remain where there is a statutory or 

strong policy rationale. The executive 

order further directs the Commissioner 

to, consistent with applicable law and to 

the extent practicable, remove 

requirements that members of the public 

provide physical signatures. 

We are also proposing that 

individuals would be permitted to 

provide the attestation in writing with a 

pen-and-ink signature, if they choose to 

do so. Under our proposal, individuals 

could download a PDF-fillable version 

of an attestation form from SSA or CMS 

websites to print, sign, and mail to SSA, 

or to call SSA to request the form in 

hard copy. We are further soliciting 

public comment on whether SSA 

should only accept attestations in 

writing with a pen-and-ink signature, 

and not allow an individual to attest 

verbally to their eligibility to enroll in 

the Part B–ID benefit. We are soliciting 

public comment on all of these 

proposed methods of attestation, and 

other potential methods such as 

electronic submission, submission by 

fax, or a signed document. 

We are proposing to rely on enrollee 

attestations to ensure eligibility for the 

Part B–ID benefit, and we will monitor 

developments in the Part B–ID benefit 

program and take appropriate action to 

address any potential areas of concern, 

including with respect to inaccurate 

attestations or other conditions 

involving ineligible individuals 

enrolling or remaining enrolled in the 

Part B–ID benefit. We will continue to 

evaluate opportunities to enhance our 

oversight to ensure compliance with the 

eligibility requirements on an ongoing 

basis. We specifically request public 

comments on whether additional 

procedures would be helpful or 

necessary to ensure the integrity of this 

program. Upon receipt of public 

comment, CMS will consider if 

proposals received would need to be set 

out in future notice-and-comment 

rulemaking prior to implementation. 

As mentioned previously, we are 

proposing to establish the eligibility 

criteria for the Part B–ID benefit in new 

§ 407.55, entitled ‘‘Eligibility to enroll.’’ 

Specifically, in § 407.55(a), we propose 

that an individual would be eligible to 

enroll in, be deemed enrolled, or reenroll in the Part B–ID benefit if their 

Part A entitlement ends at the end of the 

36th month after the month in which 

the individual received a successful 

kidney transplant, as set out under 

revised § 406.13(f)(2), and discussed in 

section II.B.5 of this proposed rule. 

The types of coverage that would 

make an individual ineligible for the 

Part B–ID benefit are specified in 

section 1836(b)(2)(A)(i) through (v) of 

the Act. Specifically, the Act requires 

that individuals shall not be eligible for 

enrollment in the Part B–ID benefit 

during any period the individual is: 

• Enrolled in a group health plan or 

group or individual health insurance 

coverage, as such terms are defined in 

section 2791 of the Public Health 

Service Act; 

• Enrolled for coverage under the 

TRICARE for Life program under section 

1086(d) of title 10, United States Code; 

• Enrolled under a state plan (or 

waiver of such plan) under title XIX of 

the Act and is eligible to receive benefits 

for immunosuppressive drugs described 


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in section 1836(b) of the Act under such 

plan (or such waiver); 

• Enrolled under a state child health 

plan (or waiver of such plan) under title 

XXI of the Act and is eligible to receive 

benefits for such drugs under such plan 

(or such waiver); or 

• Enrolled in the patient enrollment 

system of the Department of Veterans 

Affairs established and operated under 

section 1705 of title 38, United States 

Code and is either of the following: 

++ Is not required to enroll under 

section 1705 of such title to receive 

immunosuppressive drugs described in 

section 1836(b) of the Act; or 

++ Is otherwise eligible under a 

provision of title 38 of the United States 

Code (other than section 1710), to 

receive immunosuppressive drugs 

described in section 1836(b) of the Act. 

We are proposing regulation text at 

§ 407.55(b) that would mirror those 

requirements, as set out in sections 

1836(b)(2)(A)(i) through (v) of the Act. 

Section 1836(b)(2) of the Act contains 

specific exceptions that prevent 

individuals from enrolling in the Part 

B–ID benefit. For some of those 

provisions, section 402 of the CAA 

includes an additional limitation that 

the coverage must include coverage of 

immunosuppressive drugs. For other 

coverage, the statute does not include 

this limitation. When specific 

restrictions are included in one section 

of a statute but not in another, we 

presume that the language of the statute 

is intentional and deliberate with 

respect to adding the limitations. This is 

sometimes called the negative 

implication canon or expessio unius est 

exclusion alterius. 

Other than coverage under Medicaid, 

child health plan coverage, or in regard 

to immunosuppressive drugs, an 

individual is eligible to receive from the 

Department of Veterans Affairs with or 

without enrolling in the system 

established and operated under section 

1705 of Title 38, the statute does not 

address the level of coverage, or the 

benefits that must be provided under an 

individual’s other coverage, that would 

make an individual ineligible for the 

Part B–ID benefit. Therefore, we 

interpret section 1836(b)(2)(A) of the 

Act to require that, except in the case of 

an individual who receives title XIX or 

XXI benefits under a state plan or 

waiver, or immunosuppressive drugs 

individuals are eligible to receive 

through the Department of Veterans 

Affairs with or without enrolling in the 

system established and operated under 

section 1705 of Title 38, an individual’s 

enrollment in any other coverage 

specified under 1836(b)(2)(A), 

regardless of the scope of benefits 

offered to the individual under that 

coverage, would make the individual 

ineligible for the Part B–ID benefit. 

As indicated previously, section 

1836(b)(2)(B)(ii)(I) of the Act requires 

that an individual provide to the 

Commissioner an attestation that they 

are not enrolled and do not expect to 

enroll in such other coverage as 

described in section II.B.2.b. of this 

proposed rule, in order for SSA to 

determine if they are eligible for the Part 

B–ID benefit. Section 1836(b)(2)(B)(ii)(II) 

of the Act requires that individuals must 

also notify SSA within 60 days of 

enrollment in such other coverage as 

that would then make them no longer 

eligible for immunosuppressive drug 

coverage under the Part B–ID benefit. 

We propose to establish corresponding 

requirements in regulation at new 

§ 407.59. Specifically, we are proposing 

at § 407.59(a) that, in order to be eligible 

for immunosuppressive drug coverage, 

the individual must attest in either a 

verbal attestation or signed paper form 

provided by SSA, that they are not 

enrolled, and do not expect to enroll in, 

coverage as described in § 407.55(b). 

Similarly, at § 407.59(b) we are 

proposing that individuals must notify 

SSA within 60 days of enrollment in 

such coverage. 

c. Enrollment in the Part B–ID Benefit 

Section 1837(n)(1) of the Act states 

that any individual who is eligible for 

coverage of immunosuppressive drugs 

under section 1836(b) of the Act, that is, 

whose entitlement for hospital 

insurance benefits under part A ends by 

reason of section 226A(b)(2), may enroll 

or be deemed to have enrolled in the 

Part B–ID benefit as established in 

regulations and during an enrollment 

period. We are proposing in § 407.57(d) 

that, to enroll in the Part B–ID benefit, 

an individual must submit the required 

attestation as described in § 407.59. We 

will have historical information about 

individuals who will be eligible to 

enroll in the Part B–ID benefit based on 

their Medicare entitlement at the time of 

their transplant. In light of this fact, we 

believe that submission of an attestation 

and confirmation of an individual’s 

eligibility as described previously will 

be sufficient for SSA to enroll 

individuals in the Part B–ID benefit. We 

are proposing in § 407.55(c) that, if SSA 

denies an individual’s enrollment in the 

Part B–ID benefit, the individual will be 

afforded an initial determination 

entitlement appeal as described in 

§ 405.904(a)(1). This will ensure that the 

beneficiary’s statutory and due process 

rights will be adequately protected. 

Section 1837(n)(2) of the Act provides 

that an individual whose entitlement for 

hospital insurance benefits under part A 

ends by reason of section 226A(b)(2) 

prior to January 1, 2023, may enroll in 

the Part B–ID benefit beginning on 

October 1, 2022, or the day on which 

the individual first satisfies section 

1836(b) of the Act, whichever is later. 

Section 1837(n)(3) of the Act specifies 

that an individual whose entitlement for 

hospital insurance benefits under part A 

ends by reason of section 226A(b)(2) on 

or after January 1, 2023, shall be deemed 

to have enrolled in the medical 

insurance program established by this 

part for purposes of coverage of 

immunosuppressive drugs. 

We propose to establish the 

provisions relating to enrollment and 

the entitlement to the Part B–ID benefit 

in new § 407.57, titled ‘‘Part B–ID 

benefit enrollment.’’ Specifically, we are 

proposing at § 407.57(a) that an 

individual whose Part A entitlement 

ends at the end of the 36th month after 

the month in which the individual 

received a successful kidney transplant, 

on or after January 1, 2023, is deemed 

to have enrolled into the Part B–ID 

benefit effective the first day of the 

month in which the individual first 

satisfies the eligibility requirements 

proposed at § 407.55, and provides the 

attestation required in proposed 

§ 407.59, prior to the termination of 

their Part A benefits. 

In accordance with new subsections 

1837(n)(2) and (3) of the Act, certain 

individuals have an ongoing 

opportunity to enroll in the Part B–ID 

benefit regardless of whether their 

entitlement under Part A ended before 

or after January 1, 2023. Therefore, we 

are proposing at § 407.57(b) that an 

individual whose Part A entitlement 

ends in accordance with revised 

§ 406.13(f)(2) (as discussed in section 

II.B.5. of this proposed rule), and who 

meets the proposed Part B–ID benefit 

eligibility requirements proposed at 

§ 407.55 and provides the attestation 

required in proposed § 407.59, may 

enroll in the Part B–ID benefit as 

follows: 

• An individual whose entitlement 

ended prior to January 1, 2023, may 

enroll in the Part B–ID benefit beginning 

on October 1, 2022 or later. 

• An individual whose entitlement 

ends on or after January 1, 2023 can 

enroll at any time after such entitlement 

ends. 

We are further proposing at 

§ 407.57(c) that an individual who had 

previously enrolled in the Part B–ID 

benefit but whose participation in the 

benefit was terminated may re-enroll in 

the Part B–ID benefit at any time if they 

meet the eligibility requirements 

proposed at § 407.55 and provides the 


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attestation required in proposed 

§ 407.59. For instance, if an individual 

lost Part B–ID benefits because the 

individual had health coverage under a 

health program or insurance plan 

described in § 407.55(b), but then later 

lost that other coverage, the individual 

can re-enroll in the Part B–ID benefit. 

There are no late enrollment penalties 

assessed, regardless of when an 

individual enrolls or disenrolls from the 

benefit. 

d. Effective Date of Entitlement 

Provided the individual meets the 

eligibility requirements described at 

§ 407.55 and provides the attestation as 

required under § 407.59, we are 

proposing the following entitlement 

dates in § 407.57(e): 

• For individuals whose Medicare 

Part A entitlement based on ESRD status 

ends on or after January 1, 2023, and 

who submit the attestation required 

under § 407.59 before the end of the 

36th month after the month in which 

they receive a successful kidney 

transplant, their entitlement begins with 

the month their Part A benefits under 

section 226A of the Act would end. 

• For individuals who do not provide 

an attestation as part of the enrollment 

process for the Part B–ID benefit before 

their Part A entitlement under section 

226A of the Act ends, but later provides 

an attestation, their entitlement begins 

with the month following the month in 

which the individual provides the 

attestation required in § 407.59. 

• For individuals whose entitlement 

ended prior to January 1, 2023 and who 

submit an attestation as part of the 

enrollment process from October 1, 

2022 through December 31, 2022, their 

entitlement begins January 1, 2023. 

e. Termination of the Part B–ID Benefit 

Under sections 1838(b) and (h)(4) of 

the Act, individuals are not required to 

enroll or remain enrolled in the Part B– 

ID benefit. Individuals enrolled in the 

Part B–ID benefit can terminate their 

enrollment in the Part B–ID benefit by 

notifying SSA that they no longer wish 

to participate in the Part B–ID benefit. 

SSA would also terminate the Part B–ID 

benefit under certain conditions. 

Consistent with these requirements, we 

are proposing in new § 407.62, 

‘‘Termination of coverage,’’ that the 

effective date of the termination of an 

individual’s entitlement under the Part 

B–ID benefit will depend upon the 

conditions of his or her termination, as 

described in this section. 

As discussed in section II.B.2.b. of 

this proposed rule, section 1836(b)(2)(A) 

of the Act requires that an individual is 

not eligible for the Part B–ID benefit if 

they are enrolled in certain other health 

coverage. Under proposed 

§ 407.62(a)(1), when an individual 

enrolls in such other health coverage 

that would make them ineligible for the 

Part B–ID benefit as set out in 

§ 407.55(b) and notifies the 

Commissioner of this health coverage 

consistent with § 407.59(b), their Part B– 

ID benefit would be terminated effective 

the first day of the month after the 

month of notification. 

We are proposing at § 407.62(a)(1) that 

an individual may request a different, 

prospective termination date for the Part 

B–ID benefit to align with the coverage 

period under the other insurance plan 

or government program. While section 

402 of the CAA does not explicitly 

authorize CMS to permit individuals to 

request a future termination date, it also 

does not prohibit a beneficiary from 

requesting a future termination date. In 

these cases, if an individual chooses 

their Part B–ID benefit termination date, 

they will be able to retain the benefit up 

to the effective date of their new 

coverage, which will alleviate potential 

gaps or overlaps in coverage. For 

example, if an individual enrolls in 

employer coverage during an employer’s 

open enrollment period in October, for 

a January 1st effective date, the 

individual can submit their request for 

termination of the Part B–ID benefit in 

October or November, and not lose their 

Part B–ID benefit prior to the January 1st 

effective date. If we only permitted an 

individual to use a default termination 

date (for example, termination on the 

first of the month after the month of 

notification), an individual submitting a 

termination notice in October or 

November would lose their Part B–ID 

benefit prior to the effective date of their 

new coverage. However, CMS would not 

permit individuals to request a future 

termination date that is after the 

effective date of enrollment in other 

health insurance coverage, as described 

in § 407.55(b), that would make them 

ineligible for the Part B–ID benefit. The 

law provides that individuals will lose 

their Part B–ID benefit eligibility when 

the individual is enrolled in certain 

other health coverage, and they notify 

the Commissioner of this other coverage 

within 60 days of their enrollment in 

such coverage. Individuals may wish to 

terminate Part B–ID benefits as soon as 

coverage is provided by another 

program so that they are not required to 

pay duplicative premiums for the same 

coverage. We believe this proposal will 

be helpful for beneficiaries as it would 

facilitate the coordination of benefit 

coverage and avoid duplicative costs for 

beneficiaries. 

The rules for terminating Part B 

coverage based on a voluntary request 

for termination, set out in section 

1838(b) of the Act, require that Part B 

coverage ends effective the close of the 

month following the month in which 

the notice is filed, except for an 

individual who loses coverage under a 

state buy-in agreement as described in 

§ 407.50(b)(2)(i). For example, if an 

individual submits a voluntary notice to 

terminate Part B April 1st, the 

individual’s last day of Part B coverage 

would be May 31st. In contrast, we are 

proposing a shorter timeframe for 

effectuating termination of the Part B–ID 

benefit in § 407.62(a)(1), specifically 

that when an individual enrolls in other 

coverage and provides notification 

consistent with § 407.59(b), their 

enrollment in the Part B–ID benefit 

would end effective the first day of the 

month after the month they provide the 

required notification. For example, if an 

individual notified SSA on April 1st to 

end their Part B–ID benefit, their Part B– 

ID benefit will be terminated effective 

the first day of the month after the 

month of notification, May 1st. We are 

proposing this shorter period between 

notification and the end of individuals’ 

Part B–ID coverage in order to minimize 

periods of overlapping coverage that 

could result in unnecessary and 

overlapping premium liability. 

Although the statute requires that an 

individual’s eligibility for the Part B–ID 

benefit ends at the time they enroll in 

prohibited coverage, SSA would need 

additional time upon the individual’s 

notification of such other coverage, to 

effectuate the termination of the Part B– 

ID benefit. Therefore, the individual’s 

eligibility would end as of the first day 

of the month after the month they 

provide the required notification. 

Further, although 1836(b)(2)(B)(ii) 

provides up to 60 days for Part B–ID 

beneficiaries to notify the Commissioner 

that the individual has enrolled in other 

health coverage, some individuals will 

want to notify the Commissioner sooner 

to reduce the financial responsibility for 

Part B–ID benefit premiums. We believe 

this approach would implement the 

requirements of section 1838(h) of the 

Act, which requires that the entitlement 

for Part B–ID beneficiaries ends when 

an individual enrolls in other health 

coverage that makes them ineligible for 

the Part B–ID benefit. 

As discussed previously in this rule, 

we will continue to evaluate 

opportunities to enhance our oversight 

to ensure compliance with the Part B– 

ID benefit’s eligibility requirements. 

Therefore, we are proposing in 

§ 407.62(a)(2) that if an individual who 

is enrolled in the Part B–ID benefit fails 


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13There is a fourth and much smaller MSP 

eligibility group that is the Qualified Disabled 

Working Individuals (QDWI) group, which provides 

medical assistance of coverage of Part A premiums 

for individuals who are entitled to Part A under 

section 1818A of the Act, and with income that 

does not exceed 200 percent of the FPL and whose 

resources do not exceed twice the maximum 

amount permitted under the SSI program. Section 

402 of the CAA does not apply to QDWIs. 

to provide the notice of other excepted 

health coverage, and it is determined 

that an individual has such other health 

coverage, the individual would be 

ineligible for the Part B–ID benefit as 

described in proposed § 407.55(b), and 

their enrollment in the Part B–ID benefit 

would be terminated on a prospective 

basis. If it is determined, through 

investigation, that an individual has 

such other coverage, and SSA 

terminates the individual’s Part B–ID 

benefit, the individual will be provided 

notification and appeal rights, as 

currently established for Medicare Part 

B. Specifically, we are proposing at 

§ 407.62(a)(2) that the enrollment for an 

individual who enrolls in the Part B–ID 

benefit, but who subsequently enrolls in 

other health coverage as described in 

§ 407.55(b) but does not notify SSA 

within 60 days consistent with 

§ 407.59(b), the individual’s Part B–ID 

enrollment would be terminated 

effective the first day of the month after 

the month in which SSA determines the 

individual is enrolled in health coverage 

described in § 407.55(b). We are 

proposing this shorter period (as 

typically would occur with termination 

of Part B coverage), between SSA 

making a determination that an 

individual has certain other health 

coverage as set out in proposed 

§ 407.55(b), and termination of the Part 

B–ID benefit, in order to minimize 

periods of overlapping coverage that 

could result in unnecessary and 

overlapping premium liability. We 

believe this approach would implement 

the requirements of section 1838(h) of 

the Act which requires that the 

entitlement for the Part B–ID benefit 

ends when an individual enrolls in 

other health coverage that makes them 

ineligible for the Part B–ID benefit. 

However, we are proposing in 

§ 407.62(f) that, if an individual is 

involuntarily disenrolled from the Part 

B–ID benefit based on § 407.62(a)(2), (b) 

or (c), they will be permitted an initial 

determination appeal as outlined in 

§ 405.904(a)(1), which is consistent with 

existing requirements applicable to Part 

B coverage. This ensures that the 

beneficiary’s statutory and due process 

rights will be adequately protected. 

Consistent with appeals filed by 

individuals whose Medicare entitlement 

based on disability is denied or 

terminated, the individual would be 

entitled to the Medicare Part B–ID 

benefit while the appeal is in 

adjudication. CMS believes that this 

position lessens burden on beneficiaries 

by ensuring that there is no lapse in 

coverage for these necessary drugs. 

Consistent with existing requirements 

applicable to Part B benefits at 

§ 407.27(a), which state that entitlement 

to Part B benefits ends on the last day 

of the month in which an individual 

dies, we are proposing that entitlement 

to the Part B–ID benefit would end on 

the last day of the month in which the 

individual dies under new proposed 

§ 407.62(b). Based on our experience 

administering the Part B program, we 

believe this approach is easy to 

understand, familiar to members of the 

public, fair, and administratively 

straightforward. Based on these facts we 

are proposing to apply this policy to the 

Part B–ID benefit as well. 

In order to maintain consistency with 

existing Part B premium payment rules, 

and as established under section 

1838(b)(2) of the Act and revised under 

section 402 of the CAA, we are 

proposing at § 407.62(c) that termination 

of the Part B–ID benefit for individuals 

who fail to pay their Part B–ID benefit 

premiums would end as set forth in 42 

CFR part 408. This would include 

provisions governing a grace period by 

which premiums must be paid in order 

to avoid termination. Based on our 

experience administering the Part B 

program, we believe an approach that 

would apply the existing Part B 

requirements to the Part B–ID benefit 

would be easy to understand, familiar to 

members of the public, fair, and 

administratively straightforward. 

Consistent with existing requirements 

applicable to Part B coverage under 

section 1838(b)(1) of the Act, we are 

proposing that an individual may 

request voluntary termination of the 

Part B–ID benefit. To voluntarily 

terminate their Part B–ID benefit, an 

individual will provide notification to 

SSA. Primarily, we are proposing that 

an individual would contact SSA to 

request termination, either 

telephonically, or by visiting an SSA 

field office. We are also proposing that 

individuals could notify SSA in writing, 

by completing a CMS–1763 termination 

form, indicating that the individual no 

longer wishes to participate in the Part 

B–ID benefit (even if the individual does 

not have other health insurance 

coverage). Individuals could obtain a 

termination form (CMS–1763) from the 

SSA or CMS website to print, sign, and 

mail to SSA, or they can call SSA to 

request the form in hard copy. Providing 

options for beneficiaries to terminate 

their Part B–ID benefit aligns with the 

President’s December 13, 2021 

Executive Order on Transforming 

Federal Customer Experience and 

Service Delivery to Rebuild Trust in 

Government, which directs Federal 

agencies to improve the public’s 

experience of interacting with agency 

services. We are soliciting public 

comment on these proposed methods of 

attestation, and other potential methods 

such as electronic submission, or 

submission by fax. Once an individual 

contacts SSA to inform them that they 

want to disenroll from the Part B–ID 

benefit, their benefit would be 

terminated effective the first day of the 

month following the month in which 

they submit their request. Accordingly, 

we are proposing at new § 407.62(d) that 

an individual may request 

disenrollment at any time by contacting 

SSA to inform them that they no longer 

want to be enrolled in the Part B–ID 

benefit. Such individuals’ enrollment 

would end with the last day of the 

month in which the individual provides 

the disenrollment request. Similar to the 

rationale for our proposals for 

§ 407.62(b), based on our experience 

administering the Part B program we 

believe this approach would be easy to 

understand, familiar to members of the 

public, fair, and administratively 

straightforward. Based on these facts we 

are proposing to apply this policy to the 

Part B–ID benefit as well. 

Under section 1838(h)(4) of the Act, 

individuals’ entitlement to the Part B– 

ID benefit ends when an individual 

becomes entitled to Medicare based on 

age, disability, or ESRD status (see 

§§ 406.5, 406.12 and 406.13). Consistent 

with these statutory requirements, we 

are proposing that in such conditions 

individuals’ entitlement to the Part B– 

ID benefit will terminate effective the 

last day of the month prior to the month 

in which the individual becomes 

entitled to Medicare based on either age, 

disability, or ESRD under new proposed 

§ 407.62(e). 

3. Ensuring Coverage Under the 

Medicare Savings Programs 

The MSPs includes three primary 13

Medicaid eligibility groups that cover 

the Medicare Part A and/or B premiums 

and sometimes cost-sharing for over 10 

million low income individuals and are 

defined at sections 1905(p)(1) and 

1902(a)(10)(E) of the Act. One MSP 

eligibility group is the Qualified 

Medicare Beneficiary (QMB) group, 

which provides medical assistance 

through coverage of Medicare Part A 

and B premiums and cost-sharing for 

certain individuals that meet specific 

requirements. In general, the individual 


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14 In most states, receipt of SSI automatically 

qualifies an individual for Medicaid. See § 435.120. 

must have income that does not exceed 

100 percent of the federal poverty line 

(FPL) and resources that do not exceed 

three times the limit for SSI with 

adjustments for inflation as described in 

section 1905(p)(1) of the Act. A second 

MSP eligibility group is the Specified 

Low-Income Beneficiary (SLMB) group, 

which provides medical assistance 

through coverage of Part B premiums for 

individuals who would otherwise be 

eligible in the QMB eligibility group, 

except that their income exceeds 100 

percent of the FPL and is below 120 

percent of the FPL as defined at section 

1902(a)(10)(E)(iii) of the Act. A third 

MSP eligibility group is the Qualifying 

Individuals (QI) group, which provides 

medical assistance of coverage of Part B 

premiums for individuals who would 

otherwise be eligible in the QMB group, 

except that their income exceeds 120 

percent of the FPL and is below 135 

percent of the FPL as defined at section 

1902(a)(10)(E)(iv) of the Act. Federal 

statute does not allow states to 

implement MSP eligibility criteria (that 

is, income and resource limits and 

methodologies) that are more restrictive 

than those federal baselines. However, 

through authority granted by section 

1902(r)(2) of the Act, states may choose 

to implement income and/or resource 

methodologies that are more generous 

than the federal baselines for QMB, 

SLMB and QI. 

As a result of changes made under 

section 402(f) of the CAA, low income 

individuals who are entitled to 

Medicare based on enrollment in the 

Part B–ID benefit may also be eligible 

for enrollment in QMB, SLMB, or QI 

MSPs for payment of some or all of their 

Part B–ID benefit premiums and costsharing. 

Section 402(f) of the CAA revised 

section 1905(p)(1)(A) of the Act to 

change the definition of QMB to allow 

for individuals enrolled in the Part B– 

ID benefit to be eligible for medical 

assistance through Medicare costsharing as QMBs if they otherwise meet 

the income and resource limits 

established at 1905(p)(1)(B) and (C) of 

the Act. The CAA also made similar 

changes under section 1902(a)(10)(E)(iii) 

and (iv) of the Act to make medical 

assistance available for Medicare costsharing for Part B–ID benefit enrollees 

who qualify for the SLMB and QI 

eligibility groups. These changes would 

allow individuals enrolled in the Part 

B–ID benefit to attain eligibility for 

these MSPs for payment of their Part B– 

ID benefit premium and cost-sharing for 

QMBs, and for payment of their Part B– 

ID benefit premium as SLMBs and QIs, 

if such beneficiaries also meet the 

relevant income and resource criteria. 

We propose to codify this expansion of 

MSPs to apply to the Part B–ID benefit 

at new § 435.123 described in section 

II.D.3.h. of this proposed rule. 

Under section 1905(p)(1) and 

1902(a)(10)(E) of the Act, as modified by 

section 402(f) of the CAA, individuals 

eligible for the Part B–ID benefit could 

become enrolled in MSPs for payment 

of the Part B–ID benefit (MSP Part B–ID) 

through two paths on or after January 1, 

2023. First, individuals could enroll in 

the Part B–ID benefit and newly apply 

for Medicaid and be determined eligible 

for the QMB, SLMB, or QI eligibility 

groups by their state. Second, 

individuals who are enrolled in an MSP 

eligibility group and whose Medicare 

eligibility is based on ESRD, can 

transition to an MSP based on Part B– 

ID (MSP Part B–ID) the month after 36 

months after transplant if they enroll in 

the Part B–ID benefit under certain 

conditions. In order to transition to MSP 

Part B–ID under this latter condition, 

the individual must (a) return the 

attestation to be deemed to enroll in the 

Part B–ID benefit by the end of the 36th 

month after the month in which they 

receive a kidney transplant in 

accordance with the attestation 

requirements in section 1836(b)(2)(B) of 

the Act and (b) continue to meet the 

other eligibility criteria for an MSP 

eligibility group described in section 

1905(p)(1), 1902(a)(10)(E)(iii), or (iv) of 

the Act. We anticipate the second 

situation will help ensure continuity of 

coverage for beneficiaries, but note that 

continuity of coverage depends on many 

factors, including the timing of when an 

individual attests to not having other 

disqualifying insurance coverage under 

§ 407.59 as well as coordination among 

multiple entities including states, CMS 

and SSA. Given its greater complexity, 

the second situation is the primary 

focus of our discussion here. 

The simplest way to maintain 

continuity of coverage for individuals 

enrolled in an MSP who are losing 

Medicare entitlement based on ESRD 

status is through the Medicaid 

redetermination process. For full- and 

partial-benefit (that is, individuals 

enrolled only in an MSP and receiving 

coverage of only Medicare premiums 

and sometimes cost sharing) Medicaid 

beneficiaries who have Medicare 

entitlement based on ESRD status and 

lose full Medicare coverage 36 months 

after the month in which they received 

a kidney transplant, this loss of full 

Medicare coverage would constitute a 

change in circumstance under 

§ 435.916(d) even if they might obtain 

coverage under Medicare through 

enrollment in the Part B–ID benefit. 

Under § 435.916(d)(1), state Medicaid 

agencies are required to promptly 

redetermine an individual’s eligibility 

for Medicaid whenever it receives 

information about a change in a 

beneficiary’s circumstances that may 

affect their eligibility. We are providing 

an overview of how the Medicaid 

redetermination process will operate 

under the existing Medicaid regulations 

for both full- and partial-benefit 

Medicaid beneficiaries who have 

Medicare entitlement based on ESRD 

status and lose full Medicare coverage. 

However, for clarity, we want to 

highlight up front that individuals who 

remain or become full-benefit Medicaid 

beneficiaries after this redetermination 

process will not be eligible for the Part 

B–ID benefit, as explained in this 

section. 

During this redetermination process, 

under §§ 435.916(b) and 435.911, 

individuals who are already eligible for 

a full-benefit Medicaid eligibility group, 

such as those receiving Supplemental 

Security Income (SSI) 14 would still 

retain their Medicaid eligibility as long 

as there are no other disqualifying 

changes to income or disability status. 

This is true of the redetermination 

process for all individuals who are 

eligible for more than one eligibility 

group in Medicaid. If the change in 

circumstance only ends the individual’s 

eligibility for one eligibility group but 

not the other, the individual remains 

eligible for the eligibility group for 

which they still qualify. Even if the 

individual was not eligible previously 

for a full-benefit Medicaid eligibility 

group, if the individual nonetheless 

qualifies for a full-benefit Medicaid 

eligibility group (for example, the adult 

group) after the redetermination, the 

state must enroll the individual in that 

group per §§ 435.916(f) and 435.911. 

We anticipate that individuals who 

are eligible for a full-benefit Medicaid 

eligibility group would not be eligible 

for the Part B–ID benefit, because all 

states currently opt to cover 

immunosuppressive drug coverage for 

all full-benefit Medicaid eligibility 

groups and by virtue of having such 

drug coverage under Medicaid they 

would be ineligible according to section 

1836(b)(2)(A)(iii) of the Act. 

On the other hand, if the individual 

is not eligible for Medicaid on any basis, 

the state is required to screen the 

individual for potential eligibility for 

other insurance affordability programs 

as defined in § 435.4 in accordance with 

§ 435.1200(e), as required under 

§ 435.916(f). This would include 

referring the individual to an Exchange 


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15https://www.medicare.gov/Pubs/pdf/10128- 

medicare-coverage-esrd.pdf. 

to determine whether the individual is 

eligible for enrollment in a Qualified 

Health Plan with Advance Premium Tax 

Credit (APTC), cost sharing reductions 

(CSRs) or both as described in § 435.4. 

We also encourage states to inform the 

beneficiary of the Part B–ID benefit and 

coordinate with SSA, State Health 

Insurance Assistance Programs (SHIPs), 

and beneficiary groups, among others, to 

help individuals complete the 

telephonic Part B–ID benefit attestation, 

and provide other personalized 

assistance if the individual does not 

qualify for full-benefit Medicaid or the 

Exchange with either APTC or CSRs. We 

note that if the individual enrolls in an 

Exchange plan, it will make them 

ineligible for the Part B–ID benefit as set 

out in § 407.55(b). If the individual has 

already enrolled in the Part B–ID benefit 

prior to enrollment in the Exchange, 

they will need to notify SSA of this 

health care coverage in the Exchange 

consistent with § 407.59(b). 

If the individual does not ultimately 

enroll in the Part B–ID benefit, the state 

would terminate MSP enrollment 

because individuals must have Part A 

entitlement or be enrolled in the Part B– 

ID benefit to be eligible for the MSPs 

under sections 1905(p)(1)(A) and 

1902(a)(10)(E)(iii) and (iv) of the Act. 

Prior to termination, states must provide 

affected beneficiaries with advance 

notice and an opportunity for a fair 

hearing in accordance with § 435.917 

and part 431, subpart E. 

If, as a result of the redetermination 

process that must be completed prior to 

termination under § 435.916(f), the state 

identifies that the individual has 

completed the required attestation and 

would be enrolled in the Part B–ID 

benefit the month after Medicare 

entitlement based on ESRD ends (the 

end of the 36th month after the month 

in which the individual received a 

kidney transplant), the state must 

maintain the individual in the 

appropriate MSP eligibility group for 

payment of Part B–ID benefit premiums 

and, if eligible, cost-sharing, provided 

there are no other disqualifying changes 

in the income and resources of the 

individual under section § 435.911. 

As noted previously, the changes to 

section 402(f) of the CAA expand the 

definition of QMB, SLMB, and QI to 

allow individuals to qualify for those 

MSPs based on their enrollment in the 

Part B–ID benefit and meeting the 

income and resource standards of MSPs. 

As such, as part of considering all bases 

of eligibility in the redetermination 

process under § 435.916(f)(1), states 

must consider the revised eligibility 

criteria in section 402(f) of the CAA and 

enroll individuals in MSP Part B–ID 

benefit who are enrolled in the Part B– 

ID benefit and meet the income and 

resource criteria for MSPs. 

If an individual was enrolled in an 

MSP while entitled to Medicare on the 

basis of ESRD, their continued 

enrollment in MSPs for the Part B–ID 

benefit will ultimately depend on how 

quickly the state completes its 

redetermination, whether the individual 

has full Medicaid benefits (and whether 

the State plan would cover 

immunosuppressive drugs for the 

individual), and whether the individual 

enrolls in the Part B–ID benefit. If the 

state does not complete the 

redetermination process prior to the end 

of the 36th month after the month in 

which the individual received a kidney 

transplant, when an individual’s 

Medicare entitlement based on ESRD 

status ends under section 226A(b)(2) of 

the Act, and the individual had full 

Medicaid plus an MSP prior to the point 

at which their Medicare entitlement 

ends according to section 226A(b)(2) of 

the Act, the individual would retain full 

Medicaid until the redetermination is 

complete per § 435.930(b), but would 

lose MSP coverage when Medicare 

entitlement based on ESRD Medicare 

coverage expires. While states are 

required to continue furnishing 

Medicaid until the state determines an 

individual ineligible for Medicaid under 

§ 435.930(b), the only medical 

assistance provided for MSPs is 

payment of Medicare premiums and 

sometimes cost-sharing. As such, when 

Medicare entitlement ends, states stop 

providing MSP coverage because the 

individual no longer has a Medicare 

benefit for which they owe premiums, 

deductibles, coinsurance and 

copayments. Beneficiaries losing MSP 

coverage under these conditions may 

remain eligible for Medicaid on another 

basis, and states must furnish the 

Medicaid coverage for which they are 

eligible until they are found to be 

ineligible under § 435.930(b). 

If the state does not complete the 

redetermination process by the end of 

the 36th month after the month in 

which the individual received a kidney 

transplant, when Medicare entitlement 

based on ESRD status would end, and 

the individual is enrolled only in an 

MSP and does complete the Part B–ID 

benefit attestation prior to losing 

Medicare based on ESRD status, then, 

under § 435.930(b), the individual 

would maintain enrollment in their 

current MSP until the redetermination 

is complete, and the MSP would cover 

the appropriate costs for the Part B–ID 

benefit. In this scenario, once CMS 

receives enrollment confirmation of the 

individual in the Part B–ID benefit from 

SSA, CMS systems will automatically 

switch the individual from state buy-in 

for Part B to the Part B–ID benefit buyin and alert the state of the individual’s 

new enrollment and billing status. The 

reason for the difference in the outcome 

when the individual returns the 

attestation is that under § 435.930(b), 

the state must continue furnishing MSP 

because there would be a Medicare 

benefit to wrap around through coverage 

of premiums, deductibles, coinsurance 

and copayments. 

If the state does not complete the 

redetermination process by the end of 

the 36th month after the month in 

which the individual received a kidney 

transplant, when Medicare entitlement 

based on ESRD status would end, and 

the individual is enrolled only in an 

MSP and does not complete the Part B– 

ID benefit attestation prior to losing 

Medicare entitlement based on ESRD 

status, then the individual would not be 

entitled to coverage of 

immunosuppressive drugs therapy 

under section 1836(b)(2)(B) of the Act or 

state payment of the premiums for the 

Part B–ID benefit because enrollment in 

the Part B–ID benefit is a pre-requisite 

to state payment of premiums under 

section 402(f) of the CAA. 

After a kidney transplant, individuals 

must diligently take 

immunosuppressive drug therapy in 

order to avoid the rejection of the 

kidney.15 In order to prevent gaps in 

coverage of such medication when 

individuals transition off Medicare 

entitlement based on ESRD status, for 

partial-benefit Medicaid beneficiaries 

(beneficiaries enrolled in an MSP and 

not full-benefit Medicaid), states will 

need to complete redeterminations 

regarding Medicaid eligibility under 

§ 435.916(d) before individuals’ 

Medicare eligibility based on ESRD 

status ends. While we note that these 

individuals could continue coverage 

under the MSP Part B–ID benefit if they 

complete the attestation, many of these 

individuals will be eligible for fullbenefit Medicaid under the adult group 

described at § 435.119 in all states that 

expanded Medicaid since the MSPs 

generally have an income limit up to 

135 percent of the FPL and the adult 

group has an income limit up to 138 

percent of the FPL. Enrolling 

individuals in adult group coverage at 

the outset instead of enrolling them 

retroactively is vastly preferable—both 

to provide immediate coverage of their 

health coverage needs and to reduce 

administrative burden. Additionally, if 

these individuals are ultimately 


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16See https://www.niddk.nih.gov/healthinformation/health-statistics/kidney-disease 

discussing that ESRD prevalence is about 3.7 times 

greater in African Americans, 1.4 times greater in 

Native Americans, and 1.5 times greater in Asian 

Americans. 

17 Gordon, Elisa J., Prohaska, Thomas R., and 

Sehgal, Ashwin R. The Financial Impact of 

Immunosuppressant Expenses on New Kidney 

Transplant Recipients Clin Transplant 2008: 22, 

736. Available at https://www.ncbi.nlm.nih.gov/ 

pmc/articles/PMC2592494/. 

enrolled retroactively in full-benefit 

Medicaid after enrolling in the Part B– 

ID benefit—and these Medicaid benefits 

continue to include coverage of 

immunosuppressive drugs for the 

individual, the individuals will need to 

inform SSA that they have other 

insurance coverage in order for SSA to 

terminate them from the Part B–ID 

benefit in accordance with § 407.62. 

These individuals will also need to ask 

their providers to submit all of their 

bills to Medicaid for payment beginning 

from the date Medicare entitlement 

based on ESRD status ended until the 

date of the new notice of determination 

of full Medicaid. For any 

immunosuppressive drugs received 

during that time, the individuals would 

need to ask their pharmacy to bill 

Medicaid for any Medicare copays paid 

by the individual because Medicaid 

would pay secondary to Medicare. As 

such, we are strongly recommending 

that states start an early advance 

redetermination process for those 

partial-benefit beneficiaries whose 

Medicare entitlement is based on ESRD 

status and who receive kidney 

transplants. As noted previously, during 

this redetermination process, we 

encourage states to reach out to 

individuals who are likely eligible for 

the MSP Part B–ID benefit to explain the 

Part B–ID benefit and if necessary, 

coordinate with SSA, SHIPs and 

beneficiary advocates to help them 

submit the attestation to enroll in the 

Part B–ID benefit, which will assist the 

state in enrolling them in the 

appropriate MSP. We are also exploring 

steps to conduct outreach and education 

for beneficiaries and multiple external 

partners, including those who regularly 

assist beneficiaries with health 

insurance counseling, regarding the 

most appropriate coverage options for 

MSP beneficiaries transitioning off 

Medicare entitlement based on ESRD. 

Additionally, CMS will be engaged and 

able to assist beneficiaries in assessing 

their health care options and enrolling 

in the Part B–ID benefit as needed. We 

welcome comments regarding steps 

CMS can take to assist beneficiaries and 

promote awareness of coverage choices 

upon loss of the ESRD Medicare benefit 

with the goal of minimizing gaps in 

coverage and ensuring enrollment in the 

most comprehensive benefit available to 

them. 

Both the early redetermination 

process and the outreach effort to 

beneficiaries will help reduce the risk of 

gaps in coverage for 

immunosuppressive drugs for this 

vulnerable beneficiary population. 

We anticipate this early 

redetermination process and outreach 

effort will improve the customer service 

experience of kidney transplant 

recipients, consistent with the Executive 

Order on Transforming Federal 

Customer Experience and Service 

Delivery to Rebuild Trust in 

Government. We also believe it will 

have a positive health equity impact 

consistent with the Executive Order on 

Advancing Racial Equity and Support 

for Underserved Communities Through 

the Federal Government. Finally, by 

helping to avoid gaps in Medicaid and 

Marketplace coverage, it is consistent 

with the Executive Order on 

Strengthening Medicaid and the 

Affordable Care Act. In general, 

individuals with ESRD are more likely 

to be from racial or ethnic minority 

groups.16 Additionally, individuals who 

are younger, poorer and less educated 

have more difficulty affording 

transplant medication, which has led to 

lower rates of graft survival among those 

populations.17 Making 

immunosuppressive drugs more 

affordable to individuals through MSPs 

would improve lower income 

individuals’ access to 

immunosuppressive drugs critical to 

prevent transplant failure. 

As discussed previously, if an 

individual who had MSP coverage 

while entitled to Medicare based on 

ESRD status fails to enroll in the Part B– 

ID benefit after losing Medicare 

entitlement based on ESRD status, by 

the end of the 36th month after the 

month in which the individual received 

a kidney transplant the individual 

would also lose access to the MSPs after 

the state provides appropriate notice 

and fair hearing rights. However, an 

individual may re-apply for the MSPs if 

they later enroll in the Part B–ID benefit 

under section 402(f) of the CAA. 

Moreover, if an individual did not 

previously enroll in an MSP while 

entitled to Medicare based on ESRD 

status, once they enroll in the Part B– 

ID benefit they may apply for and enroll 

in an MSP provided they meet the 

applicable eligibility criteria. 

We note that states will be required to 

enroll individuals in an MSP if they are 

enrolled in the Part B–ID benefit, apply 

for an MSP, and meet the income and 

resource requirements of an MSP. As 

explained previously, section 402(f) of 

the CAA modified the eligibility 

requirements for QMB, SLMB, and QI at 

1905(p)(1) and 1902(a)(10)(E)(iii) and 

(iv) of the Act to make those MSPs 

available to individuals enrolled in the 

Part B–ID benefit. Thus, states must 

make an MSP eligibility determination 

for individuals who enroll in the Part B– 

ID benefit and apply for an MSP. If a 

state determines that individuals 

enrolled in the Part B–ID benefit meet 

the income and resource requirements 

for an MSP, the state must enroll those 

individuals in an MSP to pay for Part B– 

ID benefit premiums and cost-sharing, 

as applicable. 

Finally, we note that individuals 

enrolled in the Part B–ID benefit and an 

MSP would lose coverage under both 

programs in any of four conditions 

described in §§ 407.62(a),(b),(d), and (e). 

Specifically, an individual’s enrollment 

in both the MSPs and the Part B–ID 

benefit would end in accordance with 

§ 407.62 if the individual (1) enrolls in 

other health insurance that makes them 

ineligible for the Part B–ID benefit as 

described in § 407.55(b); (2) becomes 

eligible for Medicare Part A on the basis 

of age, disability or ESRD status; (3) 

voluntarily terminates coverage; or (4) 

dies. In order to be eligible for MSPs, 

individuals must be entitled either to 

Part A under section 1905(p)(1)(A) and 

1902(a)(E)(10) or the Part B–ID benefit 

as described in section 402(f) of the 

CAA. When individuals lose their 

entitlement to Medicare, they are 

terminated from MSPs after notice and 

fair hearing rights have been provided 

in accordance with § 435.917 and part 

431, subpart E. As such, when 

individuals who are enrolled in an MSP 

for payment of Part B–ID benefit lose 

their underlying basis for enrollment in 

the Part B–ID benefit, they would no 

longer qualify for an MSP under section 

402(f) of the CAA. In the first instance, 

if the individual is enrolled in an MSP 

based on his or her enrollment in the 

Part B–ID benefit, and they obtain other 

coverage that would make the 

individual ineligible for the Part B–ID 

benefit under section 1836(b)(2) of the 

Act, they would also no longer qualify 

for the MSP. In the second condition, if 

the individual is enrolled in an MSP 

based on his or her enrollment in the 

Part B–ID benefit, and they become 

entitled to Medicare based on age, 

disability or ESRD status, the Part B–ID 

benefit ends under section 1838(h)(4) of 

the Act; they would no longer be 

eligible for the MSP Part B–ID benefit. 

However, assuming there were no other 

disqualifying conditions, the individual 

would continue to be eligible for an 


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bp102c15.pdf. 

19https://www.cms.gov/medicare-coveragedatabase/search.aspx. 

MSP, which would then pay the 

Medicare Part B premiums and, if 

applicable, Part A premiums and costsharing on behalf of the individual, 

rather than the Part B–ID benefit 

premium. In the third condition, if the 

individual is enrolled in an MSP based 

on enrollment in the Part B–ID benefit 

and the individual voluntarily 

disenrolls from the Part B–ID benefit in 

accordance with section 1838(b)(1) of 

the Act, the individual would also 

become ineligible for the MSP Part B– 

ID benefit. Finally, if the individual is 

enrolled in an MSP based on his or her 

enrollment in the Part B–ID benefit and 

the individual dies, he or she is 

ineligible for the Part B–ID benefit 

under § 407.27(a), and would no longer 

be eligible for an MSP. 

4. Part B–ID Benefit Premiums 

The Secretary of the Department of 

Health and Human Services (HHS) is 

required by section 1839 of the Act to 

announce the Part B monthly actuarial 

rates for aged and disabled beneficiaries. 

These amounts, according to actuarial 

estimates, will equal, respectively, one 

half of the expected average monthly 

cost of Part B for each aged enrollee (age 

65 or over) and one half of the expected 

average monthly cost of Part B for each 

disabled enrollee (under age 65). The 

standard monthly Part B premium 

represents roughly 25 percent of 

estimated program costs for aged 

enrollees and is calculated to be 50 

percent of this aged actuarial rate, plus 

the $3.00 repayment amount required 

under current law. (Although the costs 

to the program per disabled enrollee are 

different than for the aged, the statute 

provides that the two groups pay the 

same premium amount.) Premiums may 

be further adjusted based on an 

individual’s conditions, such as based 

on late enrollment or reenrollment 

(§ 408.22), the income-related monthly 

adjustment amount (§ 408.28), or for 

beneficiaries subject to non-standard 

premiums (§ 408.20). 

We are proposing to create a new 

paragraph § 408.20(f) to implement the 

requirements established under section 

1839(j) of the Act and propose to modify 

other existing requirements for Part B 

premiums found in 42 CFR part 408 as 

required by statute for the Part B–ID 

benefit. We are proposing in 

§ 408.20(f)(1), that beginning in 2022, as 

required by new section 1839(j) of the 

Act, the Secretary would determine and 

promulgate a monthly premium rate in 

September of each year for the 

succeeding calendar year for individuals 

enrolled only in the Part B–ID benefit. 

Such premium would be equal to 15 

percent of an actuarial rate that 

represents 100 percent of the estimated 

average monthly cost of Part B for each 

aged enrollee (age 65 or over). This 

amount is then rounded to the nearest 

$0.10. 

The standard 20 percent coinsurance 

and annual Part B deductible would 

apply to the Part B–ID benefit. As 

required under new section 1839(j) of 

the Act and other conforming changes of 

the Act, we are proposing in 

§ 408.20(f)(2)(i) that the Part B–ID 

benefit premium would be subject to 

adjustments specified in §§ 408.20(e) 

(Nonstandard premiums for certain 

cases), 408.27 (Rounding the monthly 

premium), and 408.28 (Increased 

premiums due to the income-related 

monthly adjustment amount (IRMAA)). 

In addition, under section 1839(j) of the 

Act, the Part B–ID benefit premiums are 

also not subject to the LEP. Accordingly, 

we are proposing to provide in section 

§ 408.20(f)(2)(ii) that premiums for the 

Part B–ID benefit would not be subject 

to increased premiums for late 

enrollment or reenrollment under 

§ 408.22. 

Section 1840 of the Act requires that 

for individuals receiving monthly 

railroad retirement or Social Security 

benefits or a civil service annuity, 

payment for Part B premiums for those 

individuals must generally be deducted 

from those payments. In light of these 

requirements, we are proposing in 

§ 408.20(f)(3) that the collection of 

premiums for the Part B–ID benefit 

would follow the existing requirements 

governing the collection of Part B 

premiums set out in § 408.6 and part 

408, subpart C of title 42. Under those 

provisions, if a beneficiary is receiving 

a monthly Social Security or Railroad 

retirement benefit, or civil service 

annuity, their Part B premium must 

typically be deducted from that monthly 

benefit. In conditions where an 

individual does not receive benefits of 

the sort described previously, premiums 

must be paid by direct remittance; in 

such cases CMS bills the beneficiary 

directly. 

5. Conforming Changes 

Certain individuals are entitled to 

hospital insurance coverage under 

Medicare Part A on the basis of ESRD, 

as provided under section 226A of the 

Act. Section 406.13(f)(2) currently 

specifies that the period of entitlement 

to Medicare Part A for individuals 

whose Medicare entitlement is based on 

ESRD ends with the end of the 36th 

month after the month in which the 

individual has received a kidney 

transplant. We are proposing to revise 

§ 406.13(f)(2) to provide that beginning 

January 1, 2023, individuals no longer 

entitled to Part A benefits due to their 

coverage ending at the end of the 36th 

month after the month in which the 

individual received a kidney transplant, 

may be eligible to enroll in Part B solely 

for purposes of coverage of 

immunosuppressive drugs as described 

in § 407.55. 

Medicare Part B covers health services 

including prescription drugs used in 

immunosuppressive therapy furnished 

to an individual who receives an organ 

transplant for which Medicare payment 

is made. Section 410.30(b) currently 

lays out the requirements governing 

eligibility for coverage of prescription 

drugs used in immunosuppressive 

therapy, stating that coverage is only 

available for prescription drugs used in 

immunosuppressive therapy, furnished 

to an individual who received an organ 

or tissue transplant for which Medicare 

payment is made, and provided the 

individual is eligible to receive 

Medicare Part B benefits. Chapter 15 of 

the Medicare Benefit Policy Manual, 

section 50.5.1,18 lists some of the Food 

and Drug Administration (FDA)- 

approved, specifically labeled 

immunosuppressive drugs. They are: 

Sandimmune (cyclosporine), Imuran 

(azathioprine), Atgam (antithymocyte 

globulin), Orthoclone OKT3 

(Muromonab-CD3), Prograf (tacrolimus), 

Celicept (mycophenolate mefetil, 

Daclizumab (Zenapax); 

Cyclophosphamide (Cytoxan); 

Prednisone; and Prednosolone. 

However, this is not intended to be an 

all-inclusive list and is subject to 

change. The manual guidance states that 

CMS ‘‘expects contractors to keep 

informed of FDA additions to the list of 

the immunosuppressive drugs.’’ This 

expectation would carry over to the Part 

B–ID benefit. Medicare Administrative 

Contractors have issued Local Coverage 

Determinations on this topic and, 

generally speaking (using Local 

Coverage Determination #L33824 as an 

example 19), covered 

immunosuppressive drugs are oral 

tablets or capsules. However, certain 

immunosuppressive drugs may be 

intravenously infused or 

intramuscularly injected. The majority 

of the immunosuppressive drugs have 

generic equivalents; however, certain 

newer agents remain available as brand 

only. 

A beneficiary will typically gain 

access to the drug through a pharmacy, 

where applicable supplying fees to 


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AvgSalesPrice. 

21We note that CMS made a minor technical 

update to § 407.42 to remove the reference to the 

Continued 

pharmacies (as described in section 

1842(o)(6) of the Act) are paid. 

However, where the conditions require 

an infused or injectable 

immunosuppressive therapy, these 

would be administered in the physician 

office or outpatient setting. In this case 

of Part B–ID, only the cost of the drug 

would be covered (not the service of 

administration). Immunosuppressive 

therapies covered under Part B are paid 

based on pricing methodology in 1847A 

of the SSA (typically, this is an ASPbased payment limit). Payment limits 

for many immunosuppressive therapies 

can be found on the ASP Drug Pricing 

File,20 which is updated quarterly. Cost 

sharing is typically 20 percent. 

We are proposing to revise § 410.30(b) 

to specify that beginning January 1, 

2023, individuals who meet the 

requirements as specified in section 

§ 407.55 are eligible to receive Medicare 

Part B benefits for purposes of 

§ 410.30(b). 

An individual is eligible for 

enrollment into a Part D plan if certain 

conditions are met, as set out in section 

1860D–1(a) of the Act. Section 

423.30(a)(1)(i) of the regulations 

establishes that an individual is eligible 

for Part D if they have Medicare benefits 

under Part A or are enrolled in Medicare 

Part B. Section 423.30(a)(1)(i) would be 

revised to specify that an individual is 

eligible for Part D if they are entitled to 

Medicare benefits under Part A or 

enrolled in Part B, but does not include 

an individual enrolled solely in Part B 

for coverage of immunosuppressive 

drugs under § 407.1(a)(6). 

Section 402 of the CAA states that the 

Secretary may conduct public education 

activities to raise awareness of the 

availability of more comprehensive, 

individual health insurance coverage (as 

defined in section 2791 of the Public 

Health Service Act) for individuals 

eligible under section 1836(b) of the Act 

to enroll or to be deemed enrolled in the 

medical insurance program established 

under this part for purposes of coverage 

of immunosuppressive drugs. 

As a part of implementation, CMS 

will conduct education and outreach 

across the broad span of partners (that 

is, beneficiary advocacy groups, 

providers, associations, etc.) to ensure 

awareness and understanding of this 

benefit. Also, we note that all 

appropriate beneficiary notices, such as 

the Medicare based on ESRD pretermination notice, (discussed in this 

proposed rule), the notice that will be 

provided to individuals who were 

previously terminated from Medicare 

based on ESRD to inform of the Part B– 

ID benefit, as well as the annual notice 

to individuals that have the Part B–ID 

benefit, will include information on the 

availability of, and contact information 

for, other comprehensive coverage that 

an individual may want to explore, such 

as Marketplace or Medicaid coverage. 

Additionally, as discussed in section 

II.B.3, we are encouraging states to 

provide education and assistance to 

individuals as part of the Medicaid 

redetermination process. We are also 

exploring steps to conduct outreach and 

education for beneficiaries and multiple 

external partners, including those who 

regularly assist beneficiaries with health 

insurance counseling, regarding the 

most appropriate coverage options for 

MSP beneficiaries transitioning off 

Medicare entitlement based on ESRD. 

We welcome comments on our 

proposals implementing the Part B–ID 

benefit for eligible individuals. 

C. Proposal on Simplifying Regulations 

Related to Medicare Enrollment Forms 

(§ 406.7 and 407.11) 

We propose to revise §§ 406.7 and 

407.11 to remove references to specific 

forms that are used to enroll in 

Medicare Part A and Part B, 

respectively. This is an administrative 

change that would simplify existing 

regulations and would have no impact 

on current eligibility requirements or 

enrollment processes or the use or 

availability of these forms. We propose 

to continue to update our forms, 

including form numbers, and the 

conditions in which each form is used, 

through subregulatory guidance because 

these are procedural, and not 

substantive rules. 

Identifying each form in regulation as 

we have historically done means that 

rulemaking is required to change the 

description of those forms or the 

numbers of the forms, which in turn 

makes it challenging for CMS and SSA 

to update forms or to adopt new forms 

or new applications of existing forms as 

necessary. For example, the CMS–18–F– 

5 is currently described in §§ 406.7 and 

407.11 as an application for Part A and 

Part B for individuals who are not 

eligible for benefits through Social 

Security or under the Railroad 

Retirement Act. CMS and SSA decided 

that the form should be used for all Part 

A enrollments irrespective of individual 

enrollee’s eligibility for retirement 

benefits. OMB approved the use of the 

form under this new scope. However, in 

order to carry out this change, it would 

be necessary to revise our regulations at 

§§ 406.7 and 407.11 to reflect the 

revised uses of the form. Similarly, 

listing the forms in regulation also 

means that rulemaking is necessary to 

update our regulations when forms are 

removed from use. Currently § 407.11 

lists the forms 40–D and 40–F, which 

are obsolete. 

We are proposing to change our 

regulations in §§ 406.7 and 407.11 to 

remove all references to specific 

enrollment forms that are used to apply 

for entitlement under Medicare Part A 

and enrollment under Medicare Part B. 

Specifically, we are revising § 406.7 to 

provide that forms used to apply for 

Medicare entitlement are available free 

of charge by mail from CMS or at any 

Social Security branch or district office 

or online at the CMS and SSA websites. 

We are also proposing to make technical 

edits to the text to state that an 

individual who files an application for 

monthly Social Security cash benefits as 

defined in § 400.200 to apply also 

applies for Medicare entitlement if he or 

she is eligible for hospital insurance at 

that time. Similarly, we are revising 

§ 407.11 to provide that forms used to 

apply for enrollment under the 

supplementary medical insurance 

program are available free of charge by 

mail from CMS, or at any Social 

Security branch or district office and 

online at the CMS and SSA websites. 

These changes would allow both 

agencies to quickly adapt to the needs 

of beneficiaries by adding, removing, or 

updating forms as necessary. We believe 

that the form numbers and descriptions 

would be disseminated most 

appropriately through sub-regulatory 

guidance. 

We are also proposing a technical 

change in the last paragraph of § 406.7 

to refer to ‘‘monthly Social Security 

benefits’’ instead of ‘‘monthly social 

benefits.’’ 

D. Modernizing State Payment of 

Medicare Premiums (§§ 400.200, 406.21, 

406.26, 407.40 Through 407.48, 431.625, 

435.4, 435.123 Through 126) 

CMS seeks to modernize the Medicare 

Savings Programs through which states 

cover Medicare premiums and costsharing. As part of these efforts, we are 

proposing to update the various federal 

regulations that affect a state’s payment 

of Medicare Part A and B premiums for 

beneficiaries enrolled in the Medicare 

Savings Programs and other Medicaid 

eligibility groups. Specifically, CMS is 

proposing updates at (1) § 406.21, which 

was last revised in 1996; (2) §§ 406.26, 

and 407.40 through 48, which were last 

revised in 1991; 21 (3) § 431.625, which 


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obsolete regulatory provision, § 435.114 

(Individuals Who Would Be Eligible for AFDC 

Except for Increased OASDI in the Income Under 

Pub. L. 92–336) in the November 30, 2016 Federal 

Register (81 FR 86382), entitled ‘‘Medicaid and 

Children’s Health Insurance Programs: Eligibility 

Notices, Fair Hearing and Appeal Processes for 

Medicaid and Other Provisions Related to 

Eligibility and Enrollment for Medicaid and CHIP,’’ 

(hereinafter referred to as the November 2016 final 

rule). 

22The group payer arrangement allows certain 

parties (for example, states) to pay Part A premiums 

for a class of beneficiaries. See Program Operations 

Manual System (POMS) HI 01001.230 Group 

Collection-General at http://policynet.ba.ssa.gov/ 

poms.nsf/lnx/0601001230. 

23States generally include this information at 

section 3.2 of the state plan template, under 

‘‘Coordination of Medicaid with Medicare and 

Other Insurance of their state Medicaid Plan.’’ 

was last revised in 1988; and (4) 

§ 400.200, which was last revised in 

1983. We also propose to add new 

§§ 435.123 through 435.126 and to 

revise § 435.4 to codify in CMS 

Medicaid regulations the Medicare 

Savings Programs under section 

1902(a)(10)(E) of the Act. 

Our proposed rulemaking includes 

policy proposals to modernize the state 

buy-in program and technical updates to 

reflect statutory changes over the last 

three-plus decades. We also propose to 

codify in the regulations certain 

administrative practices that have 

evolved over the years and seek 

comment on alternative policies we 

considered that might be adopted in a 

final rule based on comments received. 

The provisions described in this section 

of the rule would clarify minimum 

requirements for the state payment of 

Medicare premiums and options for 

states to streamline eligibility and 

enrollment in the Medicare Savings 

Programs and other Medicaid eligibility 

groups. We believe that our proposals 

would improve the customer service 

experience of dually eligible 

beneficiaries under Executive Order on 

Transforming Federal Customer 

Experience and Service Delivery to 

Rebuild Trust in Government. We 

anticipate our proposals will also 

advance health equity by improving low 

income individuals’ access to 

continuous, affordable health coverage 

and use of needed health care consistent 

with Executive Order on Advancing 

Racial Equity and Support for 

Underserved Communities Through the 

Federal Government. 

1. State Plan Amendment as Agreement 

Between State and CMS (§ 407.40) 

Section 1843 of the Act provides for 

‘‘agreements’’ between a state Medicaid 

agency and the Secretary to facilitate the 

payment of Part B premiums for 

Medicare-eligible Medicaid 

beneficiaries (‘‘buy-in agreements’’). All 

states currently have elected to enter 

into such agreements, and process Part 

B premium payments as provided under 

section 1843 of the Act. Under section 

1818(g) of the Act, starting January 1, 

1990, states could expand their buy-in 

agreements to enroll Qualified Medicare 

Beneficiaries (QMBs) in Premium Part 

A, with the state paying the Part A 

premiums on their behalf. As of the date 

of this proposed rule, 36 states and the 

District of Columbia include the 

payment of Part A premiums for QMBs 

in their buy-in agreement (‘‘Part A buyin states’’), but 14 states use the group 

payer arrangement to pay Part A on 

behalf of QMBs under § 406.32(g) 

(‘‘group payer states’’).22

To execute agreements under section 

1843 of the Act, the Secretary and states 

initially signed free-standing, written 

agreements that defined the then-scope 

of a state’s buy-in agreement for Part B 

and bind the states to follow federal 

regulations and guidance under section 

1843 of the Act. However, none of these 

original signed agreements have been 

updated for decades, despite ensuing 

federal statutory requirements and 

agreed-upon changes to state or federal 

buy-in policy. In fact, there have been 

no amendments since 1992 to any of the 

free-standing written agreements 

currently in place. None of the 

freestanding written agreements were 

modified to include buy-in for premium 

Part A under section 1818(g) of the Act. 

For example, as stated in the preamble 

to final rule with comment period 

published in the August 12, 1991 

Federal Register (56 FR 38074), entitled 

‘‘Medicare and Medicaid; Eligibility for 

Premium Hospital Insurance; State BuyIn Agreements,’’ (hereinafter referred to 

as the August 1991 final rule), states 

were deemed by regulation to include 

Part B and premium Part A coverage for 

QMBs in their buy-in agreement unless 

they opted out for either or both Parts, 

even though the agreements themselves 

were not amended to reflect this. 

Likewise, the existing free-standing 

agreements do not expressly provide for 

Part B coverage for two other Medicare 

Savings Program groups—the Specified 

Low-Income Beneficiary (SLMB) and 

Qualifying Individual (QI) groups— 

although, as explained in section II.D.5. 

of this proposed rule, CMS 

subregulatory guidance and operational 

policy consider all agreements to 

incorporate these eligibility groups. In 

lieu of amending the decades-old freestanding written agreements, CMS and 

states have used Medicaid state plans 

and state plan amendments (SPAs) to 

document current state buy-in election 

choices and modifications. We believe 

that the vast majority of current 

Medicaid state plans accurately reflect 

the buy-in coverage groups and 

elections agreed upon by CMS and the 

states.23 However, there are provisions 

in the free-standing buy-in agreements 

that are not reflected in these state plan 

provisions, and these non-current 

agreements have never officially been 

superseded. As such, for a complete 

picture of the full obligations a state has 

agreed to under section 1843 of the Act, 

it is necessary to review both the freestanding agreement and deemed 

amendments to this agreement done 

through the SPA process. This is not an 

efficient or effective way to reflect the 

state’s obligations under its buy-in 

agreement with CMS. 

Section 1902(a)(4) of the Act 

authorizes the Secretary to specify 

‘‘methods of administration’’ states 

should adopt under their Medicaid state 

plans that are ‘‘found by the Secretary 

to be necessary for proper and efficient 

administration’’ of the state’s Medicaid 

program. We propose to use this 

authority to amend the definition of a 

state buy-in agreement at § 407.40(b) by 

specifying that state plan provisions 

addressing what a state has agreed to 

under sections 1843 and 1818(g) 

constitute the state’s buy-in agreement 

for purposes of those sections, including 

the scope of a state’s buy-in practice, 

and that all aspects of a state’s buy-in 

agreement with the Secretary, including 

what is set forth in the original buy-in 

agreements that is not currently in the 

state plan, should be set forth in the 

state’s Medicaid state plan. The state’s 

submission of a SPA addressing what it 

is agreeing to under sections 1843 and/ 

or 1818(g), and CMS’s approval, would 

under our proposal constitute the 

‘‘agreement’’ between the two parties for 

purposes of sections 1843 and 1818(g). 

This proposal would codify CMS’ longstanding practice of effectuating changes 

in buy-in policy through the Medicaid 

state plans, rather than through the freestanding written agreements originally 

executed with each state, and also 

consolidate all terms of the buy-in 

agreement authorized or modified under 

sections 1843 and 1818(g) in one 

‘‘agreement’’ between the parties in the 

form of submission and approval of 

relevant SPAs. 

If this proposal is finalized, the freestanding buy-in agreements would be 

superseded by provisions related to buyin practices within a state Medicaid 

plan, and, to the extent that any states 

seek to update their state plans, we 

would work with states to modify their 

state plans as needed and reiterate that 


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24For individuals enrolled in Medicaid eligibility 

groups related to cash assistance and QMB, SLMB, 

and QI, § 407.47(b) and (c) specify that the buy-in 

coverage period begins the later of the first month 

the individual is a member of a buy-in coverage 

group (that is, the effective date of the individual’s 

underlying coverage) and eligibility for Part B, or 

the effective date of the buy-in agreement or 

modification that includes the buy-in coverage 

group to which the individual belongs. However, 

for individuals enrolled in one of the other 

Medicaid eligibility groups, § 407.47(c) specifies 

that the buy-in coverage period starts the later of the 

second month the individual meets the 

requirements for both eligibility in the buy-in 

coverage group and Medicare Part B, or the effective 

date of the buy-in agreement or modification that 

includes the buy-in coverage group to which the 

individual belongs. 

25When individuals file for disability benefits, 

SSA determines eligibility for both SSDI and 

supplemental security income (SSI). The same 

disability requirements apply to both programs, but 

other requirements differ. As a result, some 

individuals receive an SSI award while their SSDI 

claim or appeal is pending. 

26 Individuals who are entitled to premium-free 

Part A are also eligible to enroll in Medicare Part 

B under § 407.10(a)(1). 

27For individuals enrolled in Medicaid eligibility 

groups related to cash assistance and QMB, SLMB 

and QI, § 407.47(b) and (c) specify that the buy-in 

coverage period begins the later of the first month 

the individual is a member of a buy-in coverage 

group (that is, the effective date of the individual’s 

underlying coverage) and eligibility for Part B, or 

the effective date of the buy-in agreement or 

modification that includes the buy-in coverage 

group to which the individual belongs. However, 

for individuals enrolled in one of the other 

Medicaid eligibility groups, § 407.47(c) states that 

the buy-in coverage period starts the later of the 

second month the individual meets the 

requirements for both eligibility in the buy-in 

coverage group and Medicare Part B, or the effective 

date of the buy-in agreement or modification that 

includes the buy-in coverage group to which the 

individual belongs. 

28States that have elected the authority provided 

under section 1902(f) of the Act to apply financial 

eligibility methodologies more restrictive than SSI’s 

must provide Medicaid eligibility to certain lowincome individuals who seek Medicaid eligibility 

on the basis of being 65 years of age or older or 

having blindness or disability. 

29A notable difference in criteria between the two 

programs is that individuals can seek SSDI 

payments for up to 12 months before the date of 

application under § 404.622 of chapter 20, whereas 

individuals can obtain SSI payments no earlier than 

the first month after they applied for benefits under 

§ 416.335 of chapter 20. 

they bind the state to follow Medicare 

regulations and guidance under sections 

1843 and 1818(g) of the Act. 

We believe our proposal would help 

remove ambiguity about the prevailing 

buy-in policies in each state and foresee 

no negative impacts or substantive 

changes for coverage policies or buy-in 

processes. We welcome comments on 

whether there are benefits to 

maintaining the free-standing buy-in 

agreements or other unintended effects 

of our proposal. 

Because approved state plan 

provisions addressing what a state has 

agreed to under sections 1843 or 1818(g) 

or both would constitute the buy-in 

agreement referenced in those sections, 

and there are existing mechanisms for: 

(1) A state to modify or terminate this 

buy-in agreement through the State plan 

amendment process; and (2) CMS to 

enforce under section 1904 of the Act 

compliance with the state plan 

requirements that reflect a state’s buy-in 

agreement, we are also proposing to 

delete § 407.45, which currently 

addresses a decision by a state to 

terminate its buy-in agreement, and 

CMS termination of a state’s buy-in 

agreement for a state failure to comply 

with it. 

2. Limiting State Liability for 

Retroactive Changes and Related 

Updates (§ 407.47) 

Under section 1843 of the Act, states 

must pay Part B premiums for any 

individual starting the first month they 

are both a member of the state buy-in 

coverage group specified in the buy-in 

agreement and eligible for Part B.24 In 

some instances, SSA determines 

Medicaid beneficiaries eligible for 

Medicare for a retroactive period. This 

generally occurs when an individual 

under age 65 who files a claim for 

disability benefits at SSA 25 receives a 

favorable social security disability 

insurance (SSDI) award multiple years 

after the initial application, and SSA 

determines the individual eligible for 

SSDI benefits at or up to 12 months 

prior to the point of application, even 

though they were not able to receive 

SSDI payments timely because 

eligibility had not yet been determined. 

Individuals entitled to SSDI become 

entitled to premium-free Medicare Part 

A after 24 months of entitlement to 

SSDI. As described in the examples that 

follow, on occasion, an individual’s 

favorable determination of SSDI is 

retroactive more than 24 months, in 

which case the determination of SSDI 

eligibility for a retroactive period for the 

individual means that the individual’s 

Part A entitlement is retroactive as well. 

The individual is also retroactively 

eligible to enroll in Part B over this 

period.26 However, SSA does not enroll 

the individual in Part B for the past 

months unless the individual pays SSA 

a lump sum amount reflecting the total 

costs of Part B premiums the individual 

would have paid had they been enrolled 

in Part B during that time or the 

individual is a member of the state buyin coverage group as explained in this 

section of this rule. 

Retroactive Medicare Part A 

entitlement for a Medicaid-eligible 

individual can have multiple 

implications for state Medicaid 

agencies. First, states may, under their 

buy-in agreement, be liable for Medicare 

Part B premiums for the retroactive 

period. If a state learns that SSA 

established retroactive Medicare Part A 

entitlement for a member of a buy-in 

coverage group, the state must review 

the individual’s eligibility for Part B 

buy-in over the retroactive period. 

Under section 1843(d)(2) of the Act and 

the current version of § 407.47(a), states 

must pay Medicare Part B premiums for 

individuals beginning with the start of 

the buy-in coverage period. The buy-in 

coverage period begins with the first 

month a Medicaid beneficiary is 

enrolled in Medicaid and qualifies for 

Medicare, with no limit on 

retroactivity.27 Therefore, states are 

retroactively liable for Medicare 

premiums back to the first month such 

individuals are determined eligible for 

Medicare, even in instances involving 

lengthy delays in Medicare 

determinations that result in effective 

dates far in the past. 

The following two examples illustrate 

how retroactive Part A Medicare 

entitlement for buy-in coverage group 

members currently affects state liability 

for retroactive Part B premiums. 

Example 1—Individual is receiving 

SSI and is enrolled in Medicaid under 

§ 435.120 (‘‘Individuals receiving SSI’’) 

or meets the eligibility requirements 

under § 435.121 (‘‘Individuals in states 

using more restrictive requirements for 

Medicaid than the SSI requirements’’ 28) 

and is retroactively entitled to Part A. 

• A 55-year-old individual applies for 

disability-related benefits at SSA in 

January 2014. SSA determines that the 

individual is eligible for SSI effective 

February 2014, and the individual is 

enrolled in Medicaid and SSI in the 

same month. (As discussed further in 

section II.D.5. of this preamble, all states 

include SSI-related individuals in their 

buy-in coverage group.) As noted 

previously, SSA will concurrently 

determine SSI and SSDI eligibility for 

an individual who files a disabilityrelated claim. While the disability 

evaluation is the same for both 

programs, other programmatic 

differences result on occasion in some 

individuals receiving favorable SSI 

determinations while their SSDI claims 

are pending.29

• In January 2019, SSA determines 

the individual to be entitled to SSDI, 

dating back to January 2013 (one year 

prior to the disability-related 

application). The individual’s 

entitlement to Medicare Part A is 

therefore effective in January 2015. The 

individual would also be eligible to 


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30 Individuals eligible for Medicare are not 

eligible for coverage under the adult group under 

§ 435.119. A state must redetermine propsective 

eligibility for adult group beneficiaries under 

§ 435.916(d) when they become eligible for 

Medicare. However, an adult group individual who 

is retroactively entitled to Part A would not in this 

example have his or her eligibility group 

retroactively adjusted, and, assuming the state 

includes all Medicaid eligibility groups in its buyin agreement, the state would have to enroll this 

individual in Part B. 

31Available on the CMS website at https://

www.cms.gov/Regulations-and-Guidance/ 

Guidance/Manuals/Downloads/clm104c01.pdf. 

32 In most states, individuals receiving or who are 

deemed to be receiving SSI are mandatorily eligible 

for Medicaid under various groups described in 42 

CFR part 435, subpart B. A minority of states have 

elected the authority described in section 1902(f) of 

the Act to apply financial eligibility methodologies 

more restrictive than SSI’s (‘‘209(b)’’ states, named 

after the section of the Social Security Act 

Amendments of 1972, Pub. L. 92–603, that 

authorized the more restrictive methodology). In 

209(b) states, individuals receiving or who are 

deemed to be receiving SSI are not mandatorily 

eligible for Medicaid, but 209(b) states must afford 

them certain favorable treatment (for example, 

states disregard SSI benefits and incurred medical 

expenses in determining eligibility for SSI 

beneficiaries; see 42 CFR 435.121(f)). 

33 In states with 1634 agreements (‘‘1634 states’’), 

SSA automatically qualifies individuals entitled to 

SSI for Medicaid and, once they qualify for 

Medicare, CMS automatically enrolls those 

individuals in Part B buy-in. In such states, the 

retroactive disability and Medicare determinations 

for the SDW individuals resulted in CMS billing for 

retroactive Part B premiums going back several 

years. States without 1634 agreements also owed 

Part B premiums for the individuals enrolled in SSI 

and Medicaid during past period, but CMS only 

billed the state after the state requested buy-in for 

these individuals. 

enroll in Medicare Part B in the same 

month. 

• Because the individual was 

enrolled in a Medicaid eligibility group 

that was (and remains) included in the 

state’s buy-in agreement at the point at 

which the individual became eligible for 

Part B, and the individual maintained 

enrollment in the eligibility group, the 

state Medicaid agency is liable for the 

individual’s Part B premiums effective 

January 2015 (that is, 48 months of 

retroactive Part B premium liability). 

Example 2—Individual who is 

enrolled in Medicaid under § 435.119 

(‘‘Coverage for individuals age 19 or 

older and under 65 at or below 133 

percent of the federal poverty level 

(FPL),’’ or the ‘‘adult group’’) is 

retroactively entitled to Part A. 

• A 55-year-old individual applies for 

disability-related benefits at SSA in 

January 2014. The individual 

simultaneously applies for Medicaid. 

The state determines the individual 

eligible for the adult group and enrolls 

him/her in it effective February 2014. 

The individual’s Medicaid eligibility 

group, the adult group, is included in 

the state buy-in agreement. (As 

discussed further in section II.D.5. of 

this preamble, some states include all 

Medicaid eligibility groups in their state 

buy-in coverage group, which means 

that all eligibility groups added to a 

state’s plan, including ones the state 

adopted after the state’s buy-in election, 

are included in the buy-in coverage 

group.) 

• In January 2019, SSA determines 

that the individual is entitled to SSDI, 

dating back to January 2013 (1 year prior 

to the disability-related application). 

The individual’s entitlement to 

Medicare Part A is therefore effective in 

January 2015. The individual would 

also be eligible to enroll in Medicare 

Part B in the same month. 

• The state is liable for Part B 

premiums effective January 2015, the 

first month the individual is a member 

of buy-in coverage group and eligible for 

Part B (that is, 48 months of retroactive 

Part B premium liability).30

A second implication for states when 

Medicare enrollment is established 

retroactively for Medicaid beneficiaries 

is that the state must determine if it has 

already paid a Medicaid claim for the 

individual, because Medicare is the 

primary payer for dually eligible 

beneficiaries when services are covered 

by both programs. In this situation, 

under section 1902(a)(25)(B) of the Act 

and § 433.139(d), the state must seek to 

recoup Medicaid payments to providers 

for any Medicare-covered services 

during the period of retroactive 

Medicare coverage, unless the state 

determines it is not cost-effective to do 

so. If Medicaid recoups funds paid to a 

provider, the provider may bill 

Medicare, which may require the 

provider to obtain an exception to 

Medicare’s 1-year timely filing 

requirement as described in CMS 

guidance published in Pub. 100–04, 

Medicare Claims Processing Manual, 

Chapter 1, Section 70.7.3.31 However, 

the greater the length of time from the 

date of service, the more labor-intensive 

and administratively burdensome it is 

for the state to recoup Medicaid 

payments from providers, for the 

provider to submit a claim to Medicare, 

and for Medicare to process it. 

Retroactive Medicare determinations 

have also resulted from operational and 

systems problems preventing the federal 

government from issuing timely SSDI 

awards to SSI beneficiaries. Over the 

past 20 years, SSA has initiated efforts 

to retroactively enroll SSI recipients in 

SSDI and Medicare (known as the 

Special Disability Workload (SDW))— 

dating as far back as the 1970s—to 

remedy operational and systems 

shortcomings that prevented SSA from 

originally screening individuals entitled 

to SSI for disability insurance benefits. 

SSI beneficiaries who qualify for 

Medicaid are buy-in coverage group 

members in all states.32 Under section 

1843(d)(2) of the Act, and the current 

version of § 407.47(g), states technically 

became liable for retroactive Part B 

premiums for such beneficiaries going 

many years back, starting the first 

month SSA retroactively established 

Part A entitlement, with no limit on this 

retroactivity.33 In 2009, a federal district 

court ruled that it was not reasonable to 

require retroactive Part B premium 

payments by states for long past periods 

for which the state could not get the 

benefit of the retroactively determined 

Medicare eligibility that would be 

covered by these premium payments 

and the state had already incurred the 

costs of coverage under Medicaid (NY 

State v. Sebelius (N.D. NY, June 22, 

2009)). In response to this ruling, CMS 

implemented a policy under which it 

does not impose an obligation on states 

to make retroactive Part B premium 

payments when SSA operational and 

systems errors cause lengthy delays in 

SSDI awards and Medicare eligibility 

determinations for full-benefit Medicaid 

beneficiaries and the state cannot obtain 

the benefit of the Medicare coverage 

associated with the Part B premium 

payments the state would otherwise be 

obligated to make. In addition, CMS 

currently allows states to request relief 

on a case-by-case basis from retroactive 

premiums for periods involving lengthy 

delays in Medicare determinations to 

the extent that such delays cover 

periods for which the state asserts it is 

too late to benefit from Medicare 

coverage. CMS considers the potential 

for beneficiary harm and the state’s 

recoupment policy (that is, time limits 

on state actions to recoup Medicaid 

payments from providers) as factors in 

assessing these state requests. We 

believe rulemaking is warranted to 

ensure that the regulations reflect a clear 

and consistent policy, transparent to all 

states, on how CMS is addressing the 

equitable concerns addressed in the 

previously discussed court decision and 

subsequent CMS policy implementing 

it. 

Based on our analysis discussed in 

this section of this rule of when a 

retroactive period would become so 

long that the burdens of retroactively 

processing claims outweigh the benefits 

of leveraging retroactive Medicare 

coverage, we propose to add a new 

paragraph (f)(1) at § 407.47 to establish 

a general rule under which state liability 

for retroactive Medicare Part B 


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34 ‘‘Full-benefit’’ Medicaid coverage, in the 

context of individuals who are considered ‘‘dually’’ 

eligible, generally refers to the package of services, 

beyond coverage for Medicare premiums and costsharing, that certain individuals are entitled to 

under § 440.210 and § 440.330. 

premiums for full-benefit 34 Medicaid 

beneficiaries under a buy-in agreement 

would be limited to a period no greater 

than 36 months prior to the date of the 

Medicare enrollment determination 

(that is, January 2016 in examples 1 and 

2). We believe that this proposed 

revision conceptually aligns with the 

2009 court decision limiting state 

liability for retroactive Medicare Part B 

premiums for full-benefit Medicaid 

beneficiaries. 

Our proposal would reduce 

administrative burden on providers for 

beneficiaries with Medicare 

determinations more than 36 months in 

the past, by relieving providers of 

Medicaid recoupment activities states 

may find cost-effective to pursue and 

the need, therefore, to resubmit the 

claim to Medicare. We estimate that 

approximately 700 Medicaid 

beneficiaries per month become 

retroactively eligible for Medicare for a 

period of greater than 36 months. It 

would not create beneficiary liability 

since Medicaid would have covered any 

medical costs the beneficiary incurred, 

and absent state buy-in, the individual 

would not be enrolled in Part B and, 

therefore, would not owe any premiums 

for periods greater than 36 months in 

the past. We believe that adopting a 

defined time limit for retroactive Part B 

premium liability for full-benefit 

Medicaid beneficiaries reduces burden 

and promotes efficiencies, clarity and 

predictability for providers, states, and 

CMS and is therefore consistent with 

the authority under section 1902(a)(4) of 

the Act for the Secretary to find 

methods of administration ‘‘necessary 

for proper and efficient administration’’ 

of the Medicaid program. We note that 

our proposal does not negate the 

Secretary’s continuing authority to grant 

relief in cases of federal government 

error under section 1837(h) of the Act. 

We also propose a ‘‘good cause’’ 

exception in proposed paragraph (f)(2). 

This provision would allow an 

exception for retroactive periods of 

more or less than 36 months if a 

currently unforeseen situation arises in 

which application of the proposed 

paragraph (f)(1) would result in harm to 

a beneficiary. Proposed paragraph (f)(2) 

would also allow CMS to provide relief 

to states for periods of less than 36 

months if we determine the state cannot 

benefit from Medicare and limiting state 

liability would not result in harm to the 

beneficiary. We seek comment on our 

proposal for a good cause exception. 

Although, as previously noted, we 

believe that a 36-month retroactive limit 

strikes the right balance between 

payment accuracy and reducing 

administrative burden, we considered 

proposing limits on state premium 

liability for time periods longer or 

shorter than 36 months, including a 

range from 24 to 60 months. We propose 

a 36-month limit for two primary 

reasons. First, we believe Medicaid 

Management Information Systems 

(MMIS) would still have Medicaid 

claims data for dates of service going 

back at least 36 months. Although state 

data retention policies vary, state MMIS 

must maintain sufficient data for 

multiple purposes, including claims 

processing, third party recovery, and 

program integrity efforts to prevent and 

detect improper payments of claims 

submitted by providers. Second, the 

length of time in our proposal is 

consistent with section 1902(a)(25)(I)(iv) 

of the Act, under which states must 

require health insurers, including Parts 

C and D plans, to accept claims 

submitted by the state within a 

minimum of 3 years from the date of 

service. We invite comment on our 

proposed 36-month limit, including 

how it compares with state Medicaid 

recoupment time-limits, or on 

alternative options to balance accuracy 

and burden. 

Our proposal to limit state liability for 

retroactive Part B premiums applies 

only when Medicaid beneficiaries 

receive retroactive SSDI and Medicare 

eligibility determinations from SSA. We 

are aware that Medicare entitlement 

delays can also stem solely from federal 

buy-in system errors, as opposed to 

retroactive SSDI and Medicare 

determinations. Such buy-in enrollment 

delays can occur if a state submits a 

valid buy-in request to federal systems, 

but the federal agencies do not process 

the buy-in enrollment (that is, enroll the 

individual in Medicare with the state 

paying the Part A or B premiums or 

both) and promptly remedy the error. 

Under section 1837(h) of the Act, the 

Secretary has discretion to grant relief to 

correct or eliminate the effects of such 

errors or inaction. 

We do not propose to extend the 36- 

month retroactive limit or good cause 

exception to such enrollment delays 

which can affect all members of a state 

buy-in coverage group, including 

individuals enrolled in partial-benefit 

Medicaid. Such individuals may need 

Parts A or B or both for a past period 

to cover unpaid medical bills. The 

existing process for these cases allows 

the Secretary to consider the conditions 

of each case, and avoid harm to the 

beneficiaries. 

We also propose modifying § 407.47 

to clarify our current requirement that 

states consider all bases of membership 

in the buy-in coverage group to 

determine the start date of buy-in. 

Under section 1843(d)(2) of the Act and 

§ 407.47(a), the beginning of an 

individual’s buy-in coverage period 

depends on the type of medical 

assistance they receive under the 

Medicaid state plan. For individuals 

enrolled in Medicaid eligibility groups 

related to cash assistance, as defined in 

section II.D.4. of this preamble, and 

QMB, Specified Low-Income Medicare 

Beneficiary (SLMB) and Qualifying 

Individual (QI), § 407.47(b) and (c) 

require the buy-in coverage period to 

begin the later of the first month the 

individual is a member of a buy-in 

coverage group (that is, the effective 

date of the individual’s underlying 

coverage) and eligible for Part B, or the 

effective date of the buy-in agreement or 

modification that includes the buy-in 

coverage group to which the individual 

belongs. For individuals enrolled in one 

of the other Medicaid groups, 

§ 407.47(c) requires that the buy-in 

coverage period starts the later of the 

second month the individual meets the 

requirements for both eligibility in the 

buy-in coverage group and Medicare 

Part B, or the effective date of the buyin agreement or modification that 

includes the buy-in coverage group to 

which the individual belongs. 

However, many individuals who 

qualify as a QMB or a SLMB also qualify 

under separate Medicaid eligibility 

groups. While an individual’s separate 

Medicaid eligibility or SLMB eligibility 

can be retroactive up to 3 months before 

the application under § 435.915, QMB 

eligibility is effective no earlier than the 

month following the month of the 

determination of such eligibility under 

sections 1902(e)(8) and 1905(a) of the 

Act. Thus, if a state determines that an 

individual is eligible for the QMB 

eligibility group and a separate 

Medicaid eligibility group, the 

individual may first become designated 

as a member of the buy-in coverage 

group corresponding to the non-QMB 

Medicaid eligibility group under which 

the individual is determined eligible, 

based on the effective date of such 

eligibility before they qualify for the 

buy-in coverage group corresponding to 

the QMB eligibility group. To determine 

the start date of the buy-in coverage 

period, our proposal clarifies at 

paragraph (a)(2) that the state must take 

into account the earlier of the buy-in 

effective dates for the applicable group. 


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For example, if a Medicare-eligible 

individual— 

• Applies for Medicaid on January 1 

of a particular calendar year; 

• Is determined in January to be 

eligible under the eligibility group 

described in section 

1902(a)(10)(A)(ii)(X) of the Act (relating 

to individuals who have incomes up to 

the FPL and are either 65 years old or 

older or with disabilities, which we 

consider to be an ‘‘other Medicaid 

eligibility group’’ under our proposed 

§ 407.42(b)(3)) retroactive to October 1 

of the previous calendar year (under 

§ 435.915(a)); 

• Is determined in January to meet all 

eligibility requirements for the QMB 

eligibility group; and 

• The individual’s state has elected to 

include all Medicaid beneficiaries 

eligible for Medicare in its buy-in 

agreement, then Part B buy-in starts on 

November 1 of the previous calendar 

year (that is, the buy-in start date for 

‘‘other Medicaid eligibility groups,’’ 

which is the second month the 

individual is eligible for the Medicaid 

eligibility group and Medicare). 

While the individual’s QMB 

eligibility under the state plan will not 

become effective until February of the 

particular calendar year, Part B buy-in 

starts on November 1 of the previous 

calendar year, because the individual 

was eligible in a Medicaid eligibility 

group that was included in the state’s 

buy-in coverage group effective in 

October of the previous calendar year 

(that is, the buy-in start date for ‘‘other 

Medicaid eligibility groups,’’ which is 

the second month the individual is 

eligible for a buy-in coverage group and 

Medicare). 

We believe that our proposal on the 

effective date of buy-in coverage for 

individuals who qualify for the buy-in 

coverage group upon multiple bases will 

provide greater transparency and 

certainty to states and beneficiaries, and 

address confusion about existing 

requirements. 

3. Technical Changes to Regulations on 

State Payment of Medicare Premiums 

a. Revisions to General Definitions 

(§ 400.200) 

Section 400.200 includes general 

definitions applicable to chapter IV of 

Title 42. In this section, we describe our 

proposed revisions and additions to the 

Medicare Savings Program definitions 

in § 400.200. 

As explained in section II.D.3.h of this 

proposed rule, we propose to amend 

Medicaid regulations to add a new 

definition of the Medicare Savings 

Programs and to codify the Qualified 

Medicare Beneficiary, Specified Low 

Income Beneficiary, Qualifying 

Individuals, and Qualified Disabled 

Working Individual eligibility groups 

for the first time since their enactment. 

As such, we propose to replace the 

existing definitions of QMB and QDWI 

in § 400.200 with streamlined references 

to the proposed QMB definition in 

§ 435.123 and the proposed QDWI 

definition in § 435.126, respectively. We 

also propose to add definitions for the 

Medicare Savings Programs, SLMB, and 

QI in § 400.200 that reference the 

corresponding proposals defining the 

Medicare Savings Programs in § 435.4 

and the proposed codification of SLMB 

in § 435.124 and QI in § 435.125. These 

proposals in § 400.200—and related 

proposals in Part 435 would bring the 

regulations in conformance with 

existing statute and policy and promote 

consistency and clarity for states. 

b. Revisions to Individual Enrollment 

(§ 406.21) 

Paragraph (a) of § 406.21 describes 

basic limitations on the timing of 

enrollment in Medicare Part A, in which 

an individual eligible for Part A may 

only enroll during his or her IEP, a GEP, 

an SEP, or, for HMO/CMP enrollees, a 

transfer enrollment period, as set forth 

in paragraphs (b) through (f). We 

propose to modify paragraph (a) to 

specify that such timing limitations do 

not apply to individuals enrolling in 

Part A through a buy-in agreement, as 

defined in § 407.40. The proposal would 

codify long-standing policy that QMBeligible individuals may enroll in Part A 

at any time of year, without regard to 

the enrollment periods currently 

specified in paragraph (a). We propose 

this change to improve the readability 

and technical accuracy of the regulation 

text. We do not believe our proposed 

update to the regulation text would 

create any meaningful change in 

existing CMS policy. 

c. Revisions to Enrollment Under State 

Buy-In (§ 406.26) 

Section 406.26 describes enrollment 

in Medicare Part A through the buy-in 

process. We propose to add a new 

paragraph (a)(3) to codify long-standing 

policy against discrimination in the 

enrollment process. Proposed paragraph 

(a)(3) would specify that states with a 

buy-in agreement in effect must enroll 

any applicant who meets the eligibility 

requirements for the QMB eligibility 

group, with the state paying the 

premiums on the individual’s behalf. 

This proposal, consistent with current 

policy, prohibits states from applying a 

cost-effectiveness test to choose which 

individuals to enroll in QMB. For 

instance, states cannot restrict QMB 

eligibility to those individuals for whom 

paying the Medicare premium would 

cost less than covering them through 

Medicaid alone. 

We also propose a revision to 

paragraph (b)(2) because the current 

language has proven to be a source of 

confusion in our interactions with states 

and other stakeholders. The current 

paragraph (b) establishes that coverage 

under buy-in begins with the latest of: 

(1) The third month following the 

month in which the agreement 

modification covering QMBs is affected, 

(2) the first month in which the 

individual is entitled to premium 

hospital insurance under § 406.20(b) 

and has QMB status, or (3) the date 

specified in the agreement modification. 

We propose amending paragraph (b)(2) 

to clarify that, under a buy-in 

agreement, as defined in § 407.40, QMBeligible individuals can enroll in 

premium hospital insurance (that is, 

Premium Part A) at any time of the year, 

without regard to Medicare enrollment 

periods. This proposal would codify 

long-standing policy. (The ability to 

enroll without regard to Medicare 

enrollment periods was discussed in the 

rulemaking for § 406.26 in the August 

1991 final rule.) 

d. Revisions to Enrollment Under a 

State Buy-In Agreement (§ 407.40) 

We propose a series of revisions to 

§ 407.40 to reflect statutory updates and 

codify agency practices related to buyin agreements. 

Section 407.40(a) describes pertinent 

legislative history on the state buy-in 

agreements. We propose to add new 

paragraphs (a)(6) through (a)(9) to cover 

other statutory changes since § 407.40 

was last updated in 1991. 

• Proposed paragraph (a)(6) 

references the establishment of the 

SLMB eligibility group, as of January 

1993, through the Omnibus Budget 

Reconciliation Act of 1990 (Pub. L. 101– 

508). 

• Proposed paragraph (a)(7) 

references the establishment of the QI 

eligibility group, effective January 1998 

through the Balanced Budget Act of 

1997 (BBA, Pub. L. 105–33). 

• Proposed paragraph (a)(8) 

references changes to the federal 

resource standard for QMB, SLMB, and 

QI to align with those under the Part D 

program in the Medicare Improvements 

for Patients and Providers Act of 2008 

(Pub. L. 110–275) effective January 

2010. This law also required SSA to 

transfer information from a low-income 

subsidy (LIS) application to the state 

Medicaid agency, requiring the agency 


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35See section 103(a)(1) of the Personal 

Responsibility and Work Opportunity 

Reconciliation Act of 1996 (PRWORA) (Pub. L. 104– 

193). The Temporary Assistance for Needy Families 

(TANF) program replaced AFDC. However, TANF 

is not linked to Medicaid coverage and is therefore 

not a Medicaid eligibility group in the buy-in 

coverage groups. 

36See Pub. 100–24, State Buy-In Manual, Chapter 

1, Section 130.H (November 1996) and December 

17, 1987 Federal Register (56 FR 47929), entitled 

‘‘Medicaid Program; Relations With Other Agencies, 

Miscellaneous Medicaid Definitions, Third Party 

Liability Quality Control, and Limitations on 

Federal Funds for Abortions.’’ 

37Prior to the repeal of title IV–A of the Act, most 

individuals now covered under section 1931 of the 

Act received Medicaid based on their receipt of 

AFDC and were thus optional cash assistance 

recipients for the purposes of buy-in. 

to use the information to initiate an 

MSP application. 

• Proposed paragraph (a)(9) 

references the permanent extension of 

the QI eligibility group through the 

Medicare Access and CHIP 

Reauthorization Act (Pub. L. 114–10) 

effective April 16, 2015. 

• Proposed (a)(10) references the 

expansion of QMB, SLMB and QI under 

section 402 of CAA, 2021 (Pub. L. 116– 

260) to cover individuals who are 

enrolled in the Part B–ID benefit. 

Paragraph (b) defines terms related to 

buy-in agreements. Currently, paragraph 

(b) states that the definitions apply as 

used in this section, unless context 

indicates otherwise. However, the terms 

defined are used throughout subpart C 

and not solely in § 407.40. Therefore, we 

propose to replace the term ‘‘section’’ 

with the term ‘‘subpart C.’’ 

We also propose the following 

changes to the definitions in paragraph 

(b): 

• To revise the definition for aid to 

families with dependent children 

(AFDC). As further explained in section 

II.D.3.e. of this proposed rule, the AFDC 

program is a cash assistance program 

that is obsolete but still relevant to buyin, because some Medicaid eligibility 

groups remain tied to AFDC, as that 

program existed as of July 16, 1996, 

prior to its elimination. 

• To remove the definition of 

‘‘Qualified Medicare Beneficiary’’ 

because the term is already defined in 

§ 400.200 to prevent confusion 

stemming the term being defined in two 

different places in current regulations. 

• To revise the definition of state buyin agreement, as discussed in detail in 

section II.B. of this proposed rule. 

• To add a definition of a ‘‘1634 

state’’ to mean a state that has an 

agreement with SSA, in accordance 

with section 1634 of the Act, for SSA to 

determine Medicaid eligibility on behalf 

of the state for individuals residing in 

the state whom SSA has determined 

eligible for SSI. We are proposing to 

define this term to improve the 

readability of the regulation text and 

codify the term as used today. 

• To add a definition of buy-in 

coverage group to mean a coverage 

group described in section 1843 of the 

Act that is identified by the state and is 

composed of multiple Medicaid 

eligibility groups specified in the buy-in 

agreement. We are proposing to define 

this term to improve the readability of 

the regulation text and codify the term 

as used today. 

Paragraph (c) describes basic rules for 

enrollment under buy-in agreements. 

We propose to revise paragraph (c)(1) 

under § 407.40 to align with proposed 

new paragraph (a)(3) under § 406.26, 

which reflects the current prohibition 

against discrimination in enrollment 

and streamlined enrollment processes 

under buy-in. Specifically, proposed 

§ 407.40(c)(1) would clarify that states 

with buy-in agreements in effect must 

enroll any individual who is eligible to 

enroll in Part B under § 407.10 and who 

is a member of the buy-in coverage 

group, with the state paying the 

premiums on the individual’s behalf. 

States cannot apply a cost-effectiveness 

test to choose which individuals to 

enroll in Part B buy-in. For instance, 

states cannot withhold buy-in from 

those who are not separately eligible for 

full-benefit Medicaid coverage. 

Additionally, we propose new text to 

clarify that states initiate buy-in for 

eligible individuals who are enrolled in 

the buy-in coverage group at any time of 

the year, without regard to Medicare 

enrollment periods. If a member of a 

buy-in coverage group is already 

enrolled in either Medicare Part A or B, 

the state would directly enroll the 

individual in buy-in and refrain from 

referring the individual to SSA to apply 

for Medicare. 

We also propose to add new 

paragraph (c)(4) to reflect that in a 1634 

state, CMS will initiate, on behalf of the 

state, Part B buy-in for individuals 

receiving SSI. We are proposing to 

codify this policy to clarify that all 

states must ensure that buy-in is 

initiated, as this current policy has been 

inconsistently applied in some states. 

We also propose to add new 

paragraph (c)(5) to codify a requirement 

that premiums paid under a buy-in 

agreement are not subject to increase 

because of late enrollment or 

reenrollment. 

e. Revisions to Buy-In Coverage Groups 

Available for Part B (§ 407.42) 

Section 407.42 describes the Part Brelated buy-in coverage groups 

authorized under section 1843(b) 

through (g) of the Act for the 50 states, 

the District of Columbia, and the 

Northern Mariana Islands. Each buy-in 

coverage group in paragraph (a) 

includes multiple Medicaid eligibility 

groups that pertain to dually eligible 

beneficiaries. Current paragraph (a) 

identifies individuals who receive, or 

are deemed to receive, SSI or state 

supplemental program (SSP) benefits (or 

both), and are categorically eligible 

under the state’s Medicaid plan. Every 

buy-in coverage group option described 

in paragraph (b) includes this 

population, making it a mandatory buyin population. Paragraph (a) also affords 

states the option to target in their buyin population individuals who are 

receiving or are treated as receiving 

AFDC as deemed recipients of cash 

assistance (in addition to individuals 

receiving or deemed to be receiving SSI 

or SSP). 

Federal law eliminated the AFDC 

program in 1996 and, with it, the 

Medicaid eligibility link to receipt of 

AFDC.35 Some Medicaid eligibility 

groups that covered individuals deemed 

eligible for AFDC are now obsolete, 

such as the group serving individuals 

who have lost AFDC due to increased 

earnings or hours from employment 

described at 42 CFR 435.112. However, 

states must treat beneficiaries in two 

Medicaid eligibility groups as if they are 

receiving AFDC for the purposes of 

Medicaid eligibility determinations 

under section 1902(a)(10)(A)(i) of the 

Act. First, under section 473(b) of the 

Act, states must consider individuals 

who are receiving adoption assistance, 

foster care, or guardianship care under 

title IV–E of the Act (‘‘children eligible 

based on title IV–E’’) as deemed 

recipients of AFDC. Second, section 

1931(b)(1)(A) of the Act (relating to 

Medicaid eligibility for low-income 

families) requires that states treat 

individuals eligible under this provision 

as receiving AFDC. 

All states except one have elected the 

option under current paragraph (a) to 

cover individuals who are deemed 

recipients of the former AFDC program 

as cash assistance recipients for buy-in. 

CMS guidance has recognized 36

children eligible based on Title IV–E as 

optional deemed cash assistance 

recipients for buy-in because they are 

deemed recipients of AFDC. Although 

we also consider individuals eligible 

under section 1931 of the Act to be 

deemed recipients of the former AFDC 

program, we have not previously 

identified such individuals as optional 

deemed cash recipients for the purposes 

of buy-in.37 As a result, states opting to 

cover deemed AFDC recipients as cash 

assistance recipients for buy-in possibly 


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38States that do not cover all Medicaid eligibility 

groups in their Part B buy-in coverage group do not 

generally pay the Part B premiums for individuals 

described in section 1931 of the Act unless they are 

simultaneously enrolled in another Medicaid 

eligibility group included in the buy-in coverage 

group (that is, they also qualify for an MSP 

eligibility group). 

39The August 1991 final rule (56 FR 38076). 

40Pub. 100–24, State Buy-In Manual, Chapter 1, 

Section 110 (November 1996). 

may not be considering individuals 

eligible under section 1931 of the Act to 

be cash assistance recipients for buy-in. 

States generally only cover individuals 

covered under section 1931 of the Act 

if they have opted to cover all Medicaid 

eligibility groups, Group 3 described in 

this section of this rule.38

In this proposed rule, we clarify that 

individuals eligible under section 1931 

of the Act are optional deemed 

recipients of cash assistances for the 

purposes of buy-in based on their 

classification as deemed recipients of 

AFDC. We propose to preserve the 

option in current paragraph (a), 

allowing states to designate all deemed 

recipients of AFDC (that is, both 

children eligible based on title IV–E and 

individuals covered under section 1931 

of the Act) as cash assistance recipients 

with eligibility groups related to SSI/ 

SSP, or to only cover individuals who 

receive or are deemed to receive SSI/ 

SSP as cash assistance recipients for 

buy-in. 

Further, under § 407.42, states can 

cover Part B premiums for Medicaid 

beneficiaries who are not receiving or 

being treated as receiving cash 

assistance (SSI/SSP). States that opt to 

cover more individuals have the option 

under paragraph (b)(1) to either select a 

buy-in coverage group that contains all 

Medicaid eligibility groups under the 

state plan (that is, all Medicaid 

beneficiaries), or SSI/SSP-related 

eligibility groups and other discrete 

eligibility populations. By selecting 

Group 2 in paragraph (b)(2), states agree 

to pay the Part B premiums for QMBs 

in addition to SSI/SSP-related eligibility 

groups, as permitted under section 

1843(h) of the Act. As mentioned in 

section B of this preamble, CMS deemed 

all buy-in agreements to include the 

payment of Part B premiums for QMBs 

unless states opted out. No states opted 

out of including QMB in their buy-in 

agreements.39

However, § 407.42 does not reference 

SLMB and QI, two additional MSP 

groups enacted after the publication of 

the August 1991 final rule and treated 

like QMB under our current buy-in 

policy. Section 1843(h)(3) of the Act 

specifies that the reference to QMB also 

includes SLMB. While our 

subregulatory guidance published for 

states in 1996 treats SLMB like QMB, 

combining them under the same buy-in 

coverage group, we have not updated 

the regulation text at § 407.42 to mirror 

the statute or current practice.40 Section 

1843(h) of the Act does not specifically 

mention QI as a buy-in eligibility group. 

However, longstanding CMS operational 

policy on buy-in agreements (that is, the 

SPA pre-print pages describing 

coordination of Medicaid with Medicare 

and Other Insurance) treats QI like QMB 

and SLMB, linking the three eligibility 

groups under one buy-in coverage 

group. 

Paragraph (b) describes seven buy-in 

coverage groups based on a combination 

of the underlying eligibility groups in 

paragraph (a). However, the groups are 

redundant. Streamlining AFDC-related 

eligibility groups and clarifying that the 

reference to QMB includes QMB, SLMB 

and QI, makes Groups 2, 4, and 6 

identical (that is, each includes 

Medicaid eligibility groups related to 

SSI/SSP and QMB, SLMB and QI) and 

Groups 3, 5, and 7 identical (that is, 

each includes eligibility groups related 

to SSI/SSP). 

Section 407.42 has been a source of 

confusion for states and other 

stakeholders. We believe that replacing 

it with a streamlined listing of the buyin coverage groups, together with their 

underlying eligibility groups, is more 

readily understandable for all parties. 

Therefore, we propose replacing the 

current framework in § 407.42 with a 

more succinct framework. First, we 

propose replacing the existing 

regulation text in paragraph (a) with a 

general requirement that states must 

select one of the buy-in coverage groups 

listed in paragraph (b). We then propose 

modifying the remaining buy-in 

coverage groups in paragraph (b) 

together with the eligibility groups they 

contain. 

The modified buy-in coverage groups 

we propose in paragraph (b) are as 

follows: 

• Group 1: Individuals who are 

categorically eligible for Medicaid and: 

++ Receive or are deemed to receive 

SSI or SSP, or both; and 

++ At state option, individuals 

described in section 1931 of the Act and 

children with adoption assistance, foster 

care, or guardianship care under title 

IV–E. 

• Group 2: All individuals described 

in Group 1 and three MSP eligibility 

groups (QMB, SLMB, and QI). 

• Group 3: All Medicaid Eligibility 

Groups: This group includes all 

individuals eligible for Medicaid. 

Our proposal reflects the three buy-in 

coverage groups that remain after 

updating and simplifying the eligibility 

groups. We propose listing them from 

narrowest to broadest and include 

headings to reflect the eligibility groups 

they contain. 

Since no states have opted out of 

including the payment of Part B for 

QMBs through their buy-in agreements, 

all state buy-in agreements currently 

include the proposed groups 2 or 3. 

However, since states still retain the 

option to narrow their agreements to 

include only eligibility groups related to 

cash assistance in group 1, our proposal 

preserves that option. In addition, since 

nearly all states include in their buy-in 

agreement as cash assistance recipients 

individuals eligible under section 1931 

of the Act and children eligible based on 

title IV–E under the deemed AFDC 

eligibility groups in the current 

§ 407.42(a)(4) (that is, the remaining 

Medicaid eligibility groups covering 

individuals treated as recipients of the 

former AFDC program), we propose 

maintaining this discrete option. As 

described in section II.D.4. of this 

proposed rule, we seek comment on 

alternatives considered that might be 

adopted in a final rule based on 

comments received. The first alternative 

would consolidate proposed groups one 

and two, further reducing the number of 

buy-in coverage groups from three to 

two, to mirror the current landscape and 

simplify the regulation. The other 

alternative would require states to treat 

all deemed recipients of the former 

AFDC program (that is, children eligible 

based on Title IV–E and individuals 

covered under section 1931 of the Act) 

as deemed recipients of cash assistance 

for buy-in to further streamline the 

regulation. 

f. Revisions to Termination of Coverage 

Under a State Buy-In Agreement 

(§ 407.48) 

Section 407.48 describes the process 

for terminating an individual’s coverage 

under a state buy-in agreement when 

he/she is determined ineligible by either 

CMS or the state. States must 

communicate all disenrollment 

information through an established data 

exchange process with CMS. Currently, 

paragraph (c)(1) indicates that CMS 

must determine ineligibility or receive a 

state ineligibility notice by the ‘‘25th 

day . . .’’ in order for the termination 

date to be calculated using that month. 

However, CMS no longer applies the 

uniform monthly deadline of the 25th 

day of the month for states to send CMS 

buy-in terminations. Instead, CMS has 

applied the Current Operating Month 

(COM) schedule, a schedule developed 


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41Under § 435.916(f), if an individual is 

determined by the state Medicaid agency to no 

longer meet the eligibility requirements for the 

eligibility group in which they are enrolled, the 

state Medicaid agency must determine whether the 

individual is eligible for Medicaid on a separate 

basis before proposing to terminate the individual’s 

Medicaid eligibility. While the state is making that 

determination, the state must maintain Medicaid 

coverage, which means that, if the individual’s 

eligibility group is included in the state’s buy-in 

agreement, the state must continue pay for the 

individual’s Part B premiums. 

42Similarly, in cases where an individual opts to 

be direct billed for premiums, Medicare would bill 

the individual for up to 2 months’ retroactive 

premiums plus the current month’s premium. 

by SSA with varying monthly 

processing deadlines, to determine 

CMS’ deadline to receive state 

terminations in a given month. Each 

quarter, CMS prospectively conveys the 

upcoming quarterly COM schedule to 

states. To align the regulation with 

current agency practice, we propose 

amending paragraphs (c)(1) and (c)(2) by 

replacing the reference to the 25th day 

with a reference to a new paragraph (e). 

Our proposed new paragraph (e) would 

require CMS to prospectively convey to 

states, on a quarterly basis, a schedule 

of processing cut-off dates for each 

calendar month. 

Delays in the receipt of buy-in 

terminations by CMS impacts state and 

beneficiary liability after individuals 

lose eligibility for Medicaid and the 

state buy-in coverage group.41 As 

currently described in paragraph (c)(1), 

CMS must receive a state buy-in 

termination notice during the second 

month after the individual loses 

eligibility in order for CMS to stop 

charging the state for Part B premiums 

the first month the individual no longer 

qualifies. For example, if an individual 

loses eligibility for Medicaid and buy-in 

starting June (that is, is eligible through 

May), CMS must receive the state 

termination notice by the August COM 

deadline in order for state liability to 

end in June (that is, state premium 

liability continues through May). 

However, if delays in data exchange 

cause the state to send the termination 

notification for an individual with an 

effective date that is earlier than the 

second month before the processing 

month, under paragraph (c)(2), CMS 

will adjust the buy-in termination to the 

second month prior to the month CMS 

receives the deletion request. For 

example, state termination requests 

received in the processing month of 

September can have an effective 

termination date of no earlier than July 

(that is, state premium liability 

continues through June). If the state 

requested an effective date prior to July 

(for example, April), CMS will 

automatically adjust the effective date of 

determination to July (that is, state 

premium liability continues through 

June). The state remains liable for 

premiums through the month of June. 

When federal systems eventually 

process the buy-in termination, SSA 

begins charging the beneficiary for Part 

B premiums. Consistent with paragraph 

(c)(2), SSA can retroactively recoup up 

to 2 months of premiums from the 

individual’s Social Security check. In 

practice, after buy-in termination, SSA 

deducts 3 months at a time to account 

for 2 months’ retroactive premiums plus 

the current processing month.42 We do 

not propose any changes to this 

provision in this regulation, but as we 

discussed in section II.D.4.d.(4). of this 

proposed rule, we seek comment on 

possible modifications to limit 

beneficiary liability. 

g. Revisions to Coordination of 

Medicaid With Medicare Part B 

(§ 431.625) 

Section 431.625(d)(2) describes the 

populations for which Federal financial 

participation (FFP) is available in 

expenditures for Part B premiums. 

Section 431.625(d)(1) identifies the 

basic rule, which is that FFP is generally 

unavailable to states for their coverage 

of Part B premiums, except where such 

coverage is provided to individuals 

receiving money payments under title I, 

IV–A, X, XIV, XVI, or state supplements 

under section 1616(a) of the Act 

(optional state supplements) or as 

required by section 212 of Public Law 

93–66 (regarding mandatory state 

supplements). Section 431.625(d)(2) 

lists the exceptions to this basis rule; 

that is, it lists the Medicaid populations 

not receiving cash assistance on whose 

behalf states may both cover their Part 

B premiums and receive FFP for such 

coverage. 

CMS last updated the current list in 

paragraphs (i) through (x) in the January 

11, 1988 Federal Register (53 FR 657), 

entitled ‘‘Medicaid Program; Relations 

With Other Agencies, Miscellaneous 

Medicaid Definitions, Third Party 

Liability Quality Control, and 

Limitations on Federal Funds for 

Abortions,’’ (hereinafter referred to as 

the January 1988 final rule), and it does 

not reflect the adoption of several 

statutory provisions and regulations to 

implement them, since that time. 

Additionally, we have not modified 

(d)(1) to reflect the repeal of title IV–A 

of the Act. We thus propose updating 

§ 431.625(d)(1) to eliminate the 

reference to title IV–A. We also propose 

updating the outdated list of groups in 

(d)(2) to remove obsolete groups, make 

technical changes to some remaining 

groups, and add two additional groups. 

Three groups in the current 

§ 431.625(d)(2) are obsolete, and we 

propose to remove them from the 

regulation: 

• Paragraph (i): AFDC families 

eligible for continued Medicaid 

coverage despite increased income from 

employment. Although the 

implementing regulations at §§ 435.112 

and 436.116 still exist, this group is 

obsolete in practice. The Medicare and 

CHIP Reauthorization Act of 2015 (Pub. 

L. 114–10) eliminated the sunset 

provision for Transitional Medical 

Assistance under section 1925 of the 

Act, which provides a more robust 

extension and supersedes this group. 

Therefore, this group should have no 

enrollees. 

• Paragraph (vi): Deemed recipients 

of AFDC who are participants in a work 

supplementation program or denied 

AFDC because the payment would be 

less than $10. As noted in section 

II.D.3.e. of this proposed rule, the AFDC 

program was eliminated in 1996. 

Section 431.625(d)(2)(ii) crossreferences these individuals to 

§ 435.115. However, CMS eliminated 

the references to the AFDC benefit and 

section 414(g)-related work 

supplementation programs from 

§ 435.115 for being obsolete in the 

November 2016 final rule. (CMS has not 

modified or eliminated the territory 

regulation cross-reference, at § 436.114, 

but it is also obsolete.) 

• Paragraph (x): Individuals no 

longer eligible for the disregard of $30 

or $30 plus one-third of the remainder, 

but who, in accordance with section 

402(a)(37) of the Act, were deemed 

AFDC recipients for a period of 9 to 15 

months. Section 103(a)(1) of PRWORA 

repealed paragraph (a)(37) of section 

402, making this deemed status 

obsolete. 

Due to the proposed deletion of 

obsolete groups, we propose to 

redesignate paragraphs (ii), (iii), (iv), 

and (v) as paragraphs (i), (ii), (iii), and 

(iv), respectively; and paragraphs (vii), 

(viii), and (ix) as paragraphs (v), (vi), 

and (vii), respectively. We propose to 

make the following technical changes to 

the redesignated paragraphs: 

• Redesignated paragraph (i): Delete 

‘‘435.114’’ which CMS removed from 

the regulations in the November 2016 

final rule. 

• Redesignated paragraph (iii): Add 

cross-references to §§ 435.145 and 

436.114(e), which have both been 

revised since this list was last 


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43CMS last modified § 435.145 in the November 

2016 final rule and last updated § 436.114(e) in the 

November 21, 1990 Federal Register (55 FR 48601), 

entitled ‘‘Medicaid Program; Eligibility Groups, 

Coverage, and Conditions of Eligibility; Legislative 

Changes under OBRA ’87, COBRA, and TEFRA,’’ 

(hereinafter referred to as the November 1990 final 

rule). 44CMS last modified § 435.115 in the November 

2016 final rule and last changed § 436.114(f) and (h) 

in the November 17, 1994 Federal Register (59 FR 

59372), entitled ‘‘Aid to Families with Dependent 

Children; Extension of Medicaid when Support 

Collection Results in Termination of Eligibility’’. 

updated,43 and modify the description 

of the group to be consistent with the 

current description of children with 

adoption assistance, foster care or 

guardianship care under title IV–E of 

the Act. 

• Redesignated paragraph (iv): Delete 

‘‘chapter’’ and add in its place 

‘‘subchapter’’, for specificity and for 

consistency with this list. 

• Redesignated paragraph (vi): Delete 

the citation to section 1902(e)(3) of the 

Act and replace it with a cross-reference 

to § 435.225, the regulation which 

implemented section 1902(e)(3) of the 

Act in November 1990, consistent with 

other cross-references in this list. 

• Redesignated paragraph (vii): Add 

cross-references to §§ 435.115 and 

436.114(f) and (h), both of which CMS 

revised since last updating the list,44

and modify the description of the 

Medicaid eligibility group to reflect the 

current description of families with 

extended Medicaid because of increased 

collection of spousal support under title 

IV–D of the Act. 

While we propose to eliminate from 

§ 431.625(d)(1) the reference to title IV– 

A, we believe we must account for the 

statutory directive that individuals 

described in section 1931(b) of the Act 

be treated for purposes of Title XIX of 

the Act as receiving title IV–A 

assistance. We therefore propose to add 

to the proposed redesignated paragraph 

(iii) individuals who are described in 

section 1931(b) of the Act. 

The current § 431.625(d)(2) list of 

Medicaid eligibility groups also does 

not reflect the enactment of the MSPs 

for which the states receive FFP for 

coverage of premiums or cost sharing or 

both. Following the redesignated 

paragraph (d)(2)(vii), we propose adding 

a new paragraph (viii) to include the 

QMB, SLMB, and QI eligibility groups, 

as proposed to be defined in § 400.200, 

to the eligibility groups for which FFP 

is available. This proposed addition of 

paragraph (viii) would codify longstanding policy and bring the regulation 

in alignment with sections 

1902(a)(10)(E) and 1905(p)(3) of the Act, 

which authorize FFP for the state 

payment of Medicare Part B premiums 

for the MSPs. 

In addition, we propose a new 

paragraph (d)(2)(ix) to clarify that states 

receive FFP for Part B payments for 

adult children with disabilities 

described in section 1634(c) of the Act. 

Finally, we are taking this 

opportunity to make a technical 

correction in § 431.625(d)(3) to update a 

cross-reference in the third sentence 

that is now inaccurate, changing 

‘‘435.914’’ to ‘‘435.915’’. 

The availability of FFP for state 

expenditures for dually eligible 

individuals may affect state decisions 

regarding the breadth of its Part B buyin coverage group. Under our proposed 

§ 407.42(b), states can select a buy-in 

coverage group that only includes 

Medicaid eligibility groups related to 

cash assistance but have the option to 

select a buy-in coverage group with 

additional populations (that is, states 

can choose to cover QMB, SLMB, and 

QI in addition to Medicaid eligibility 

groups related to cash assistance or can 

choose to cover all Medicaid eligibility 

groups). Including these three MSP 

eligibility groups in the buy-in coverage 

group makes it easier for states to meet 

their obligation to cover Part B 

premiums for these groups under 

sections 1902(a)(10)(E) and 1905 

(p)(3)(A) of the Act. These sections of 

the Act and our proposed revisions to 

§ 431.625 allow states to obtain FFP not 

only for Medicare Part B premiums for 

Medicaid eligibility groups related to 

cash assistance but for QMB, SLMB, and 

QI too. 

Although states cannot obtain FFP for 

Part B premiums for other Medicaid 

eligibility groups, paying the premiums 

for these individuals under buy-in helps 

states maximize federal funding for 

health care services. First, under section 

1905(a)(29)(B) of the Act and 

§ 431.625(d)(3), states cannot obtain FFP 

for state Medicaid expenditures that 

could have been paid for under 

Medicare Part B if the person had been 

enrolled in Part B. This means, for 

example, that if a Medicare-eligible 

individual is enrolled in Medicaid and 

requires outpatient care, the state 

Medicaid agency will not receive FFP 

for Medicaid payments to the 

individual’s outpatient care providers if 

the individual is not enrolled in 

Medicare. In addition, under CMS 

policy, states can require Medicaid 

applicants and beneficiaries to apply for 

Medicare as a condition of eligibility, 

provided that the state pays any 

Medicare cost-sharing or premiums the 

individual incurs. If the state does not 

pay the Part B premiums for a Medicaid 

beneficiary and he/she does not enroll 

in Part B, we do not consider Medicare 

Part B to be a liable third party under 

part 433 subpart D and, therefore, the 

state must cover the items and services 

in accordance with its state Medicaid 

plan. Thus, it usually is cost-effective 

for a state to choose to include 

additional eligibility groups in its Part B 

buy-in agreement and pay for the 

premium, even if no FFP is available for 

that premium payment, rather than 

forfeit Medicare coverage or FFP for all 

services covered that could have been 

paid for by Medicare Part B. 

h. The Medicare Savings Programs 

(§§ 435.4, and 435.123 Through 

435.126) 

In accordance with section 

1902(a)(10)(E) of the Act, states must 

provide medical assistance to certain 

low-income Medicare beneficiaries. The 

eligibility groups described in section 

1902(a)(10)(E) of the Act comprise what 

are generally referred to as the 

‘‘Medicare Savings Programs.’’ The four 

eligibility groups in the Medicare 

Savings Programs are: 

• The Qualified Medicare Beneficiary 

(QMB) eligibility group, enacted by 

section 301(e)(1) of the Medicare 

Catastrophic Coverage Act of 1988 

Public Law 100–360 and effective 

January 1989. As described in section 

1905(p)(1) of the Act (as amended by 

section 402 of the CAA), eligibility in 

this group is available to individuals 

entitled to Medicare Part A or, on or 

after January 1, 2023, enrolled in the 

Part B–ID benefit, and whose income 

does not exceed 100 percent of the FPL 

and whose resources do not exceed the 

standard described in section 1860D– 

14(a)(3) of the Act, relating to the 

Medicare Part D full-benefit subsidy. 

The medical assistance available to the 

QMB eligibility group is coverage for 

Medicare Part A and B premiums and 

cost-sharing, as described in 1905(p)(3) 

of the Act, including deductibles, 

coinsurance and copayments. 

• The Specified Low-Income 

Beneficiary (SLMB) eligibility group, 

enacted by section 4501 of the Omnibus 

Budget Reconciliation Act of 1990 (Pub. 

L. 101–508) and effective January 1993. 

Under section 1902(a)(10)(E)(iii) of the 

Act (as amended by section 402 of the 

CAA), eligibility in this group is 

available to individuals who would 

otherwise be eligible in the QMB 

eligibility group except that their 

income exceeds 100 percent of the FPL 

and is below 120 percent of the FPL. 

The medical assistance for SLMBs is 

coverage for Part B premiums. 

• The Qualifying Individuals (QI) 

eligibility group, enacted by section 

4732 of the Balanced Budget Act (BBA) 

of 1997 (Pub. L. 105–33) and effective 

January 1998. Under section 


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45According to the Medicaid and CHIP Payment 

and Access Commission (MACPAC), Alabama, 

Connecticut, Delaware, District of Columbia, 

Illinois, Indiana, Louisiana, Maine, Massachusetts, 

Mississippi, New York, Oregon and Vermont use 

less restrictive definitions of income and resources 

than SSI’s in February 2020. See Chapter 3: 

Improving Participation in the Medicare Savings 

Programs, in MACPAC. (2020, June). Report to 

Congress on Medicaid and CHIP. https://

www.macpac.gov/wp-content/uploads/2020/06/ 

June-2020-Report-to-Congress-on-Medicaid-andCHIP.pdf, (hereinafter referred to as ‘‘Chapter 3 in 

MACPAC’s June 2020 Report to Congress’’). In 

addition, beginning January 1, 2021, New Mexico 

adopted less restrictive definitions than SSI for 

resources. 

1902(a)(10)(E)(iv) of the Act (as 

amended by section 402 of the CAA), 

eligibility in this group is available to 

individuals who would otherwise be 

eligible in the QMB eligibility group 

except that their income is at least 120 

percent of the federal poverty level and 

below 135 percent of the federal poverty 

level. The medical assistance for QIs is 

coverage of Part B premiums. 

• The Qualified Disabled Working 

Individuals (QDWI) eligibility group, 

enacted by section 6408 of the Omnibus 

Budget Reconciliation Act (OBRA) 1989 

(Pub. L. 101–239) and effective July 

1990. As described in section 1905(s) of 

the Act, eligibility in this group is 

available to individuals entitled to 

Medicare Part A under section 1818A of 

the Act, whose income does not exceed 

200 percent of the federal poverty level, 

and whose resources do not exceed 

twice the maximum amount permitted 

under the SSI program. The medical 

assistance for QDWIs is coverage for 

Part A premiums. 

The Medicare Savings Programs 

include four mandatory eligibility 

groups. Section 1905(p)(1) and 

1902(a)(10)(E) of the Act (for the QMB, 

SLMB, and QI eligibility groups) and 

1905(s)(2) and (3) of the Act (for the 

QDWI eligibility group) require that 

states use SSI income and resource 

methodologies to determine financial 

eligibility. CMS has not codified the 

Medicare Savings Programs in part 435 

of this chapter. We propose to include 

the Medicare Saving Programs in the 

listing in subpart B of part 435 and to 

add a definition of the Medicare Savings 

Programs in § 435.4. 

We believe that our proposals in part 

435—together with our proposals in 

§ 400.200—would ensure consistency 

and transparency in our regulations and 

avoid confusion for stakeholders. In 

addition, as described in sections I.B. 

and II.B. of this proposed rule, section 

402 of the CAA amends the Medicare 

Savings Programs under sections 

1905(a)(1)(A) and 1902(a)(10)(E) of the 

Act to pay some or all of the costs of the 

new immunosuppressive drug coverage 

for certain low-income individuals who 

are enrolled in such drug coverage. We 

believe that our proposals to codify the 

Medicare Savings Programs in the 

Medicaid regulations provide the 

necessary foundation upon which to 

codify the expansion of Medicare 

Savings Program eligibility in section 

402 of the CAA. 

First, we propose to add to § 435.4 a 

definition of the Medicare Savings 

Programs consistent with section 113 of 

MIPPA, which defines the term 

Medicare Savings Programs to include 

the QMB, SLMB, QI, and QDWI 

eligibility groups. Second, we propose 

to add new § 435.123 to codify the QMB 

eligibility group under sections 

1902(a)(10)(E)(i) and 1905(p)(1) of the 

Act. Proposed § 435.123(b)(1) reflects 

that under section 1905(p)(1)(A) of the 

Act, QMBs must be either entitled to 

premium-free Part A coverage that is 

applicable to the vast majority of 

Medicare beneficiaries or entitled to 

Part A coverage for individuals age 65 

and over who must pay a premium to 

enroll in Part A. QMB status is not 

available to individuals entitled to Part 

A solely based on eligibility to enroll as 

a Qualified Disabled and Working 

Individual (QDWI) as specified in 

section 1905(p)(1)(A) of the Act. In 

addition, proposed § 435.123(b)(1) 

incorporates the expansion of MSP 

eligibility under section 402 of the CAA 

to cover individuals who are enrolled in 

Medicare Part B for coverage of 

immunosuppressive drugs. 

Proposed § 435.123 (b)(2) and (b)(3) 

describe the income and resource limits 

for the QMB eligibility group identified 

previously. Further, proposed 

§ 435.123(b)(2) and (b)(3) reflect that 

under section 1902(r)(2) of the Act and 

§ 435.601(d)(1)(i), states can choose to 

disregard certain types of income and 

resources in a manner that is less 

restrictive than SSI methodologies. 

According to the Medicaid and CHIP 

Payment and Access Commission 

(MACPAC), as of February 2020, 14 

states and the District of Columbia had 

adopted income or resources standards 

or both that are more generous than 

SSI’s for the QMB eligibility group as 

well as two other MSPs, the SLMB and 

QI eligibility groups.45

We are also proposing to include 

proposed (b)(2)(i) and (b)(2)(ii) to codify 

in regulation the statutory requirements 

pertaining to the treatment of a cost of 

living adjustment (COLA) for Social 

Security retirement, survivors, and 

disability benefits in determining 

eligibility for the QMB, SLMB, and QI 

eligibility groups. Under section 

1905(p)(2)(D) of the Act, income 

attributable to a Social Security COLA is 

not countable as income for QMB, 

SLMB, or QI eligibility purposes during 

a ‘‘transition month,’’ which the statute 

defines as each month through the end 

of the month following the month the 

U.S. Department of Health and Human 

Services (HHS) publishes the revised 

official poverty level in the Federal 

Register. For example, in a year in 

which an individual receives a Social 

Security income-related COLA 

adjustment beginning in January, and 

HHS publishes the updated federal 

poverty levels in February, the COLA is 

not countable as income in determining 

eligibility for the QMB, SLMB and QI 

eligibility groups until April. 

We are aware of states that have 

inappropriately moved to terminate 

eligibility during a transition month by 

continuing to apply the prior year’s 

poverty levels and failing to disregard 

the COLA. Such actions are inconsistent 

with the statute and harmful to 

beneficiaries. We remind states that 

state agencies must not wait until CMS 

notifies them of the new official poverty 

levels before adjusting their eligibility 

standards. They must adjust their 

eligibility standards to reflect the 

updated poverty level as soon as the 

Secretary publishes the new poverty 

level figures in the Federal Register. We 

are proposing to codify these 

requirements in regulation. 

Proposed § 435.123(c)(1) reflects that 

Medicaid covers the Medicare Parts A 

and B premiums and cost-sharing for 

individuals entitled to Part A for QMB, 

and proposed § 435.123(c)(1) (c)(2) 

reflects that Medicaid covers premiums 

and cost-sharing for QMBs enrolled in 

Part B for coverage of 

immunosuppressive drugs for QMB 

under section 402 of the CAA. 

In addition to the proposed 

codification for the QMB eligibility 

group, we propose to add new § 435.124 

for the SLMB eligibility group and new 

§ 435.125 for the QI eligibility group 

described in section 1902(a)(10)(E)(ii) 

and (iv) of the Act, respectively. 

Paragraphs (b) and (c) of the proposed 

SLMB and QI provisions are consistent 

with the proposed § 435.123 for the 

QMB eligibility group, with the 

exception of the different income 

thresholds that apply to them as 

compared to the QMB eligibility group, 

as identified previously. We note that 

section 1902(a)(10)(E) of the Act sets 

forth the eligibility criteria for these 

MSP eligibility groups but does not 

assign the names SLMB and QI. 

Lastly, we propose to add a new 

§ 435.126 for the QDWI eligibility group. 

Paragraphs (a) through (c) of the 

proposed QDWI provision reflect that, 

in accordance with sections 


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46The Northern Mariana Islands are governed by 

§ 407.42. 47This policy is currently codified at § 407.48(c). 

1902(a)(10)(E)(ii) and 1905(s) of the Act, 

QDWI pays the Part A premiums for 

individuals under age 65 who become 

entitled to Part A based on their receipt 

of SSDI, but who subsequently lose 

SSDI, and as a result, their Part A 

entitlement, on the basis of gainful 

employment. Section 1818(g) of the Act 

does not permit states to pay the Part A 

premium for QDWIs under a state buyin agreement. States pay the Part A 

premium for QDWIs through the group 

payer process. 

4. Alternative Proposals Considered on 

Modernizing State Payment of Medicare 

Premiums 

We considered several alternatives to 

the proposed policies and technical 

changes as previously described in 

sections IV.D.1 through 3. of this 

proposed rule as part of this proposed 

rulemaking. We describe those 

alternatives in this section of this rule. 

In each case, we welcome comments to 

inform future rulemaking and 

operational improvements in this area. 

a. Part B Buy-In Coverage Groups 

(§ 407.42(b)) 

In section II.D. of this preamble, we 

described our proposal to reduce the 

number of Part B buy-in coverage 

groups described at § 407.42(b). We also 

considered two alternatives that might 

be adopted in final regulation based on 

comments received. The first option 

would further reduce the number of Part 

B buy-in coverage groups from our 

proposed three groups to two groups, to 

reflect current practice among states and 

simplify the regulatory text. As 

background, the regulation currently 

provides states the option to pick from 

among different buy-in coverage groups. 

However, since no states have opted out 

of including the payment of Part B for 

QMBs, all state buy-in agreements 

currently include groups 2 or 3 

described in proposed paragraphs (b)(2) 

and (3). Therefore, no states only cover 

Medicaid eligibility groups related to 

cash assistance in buy-in coverage group 

1 described in proposed paragraph 

(b)(1). We seek comment on potentially 

narrowing the buy-in coverage group 

options to groups 2 and 3, and might 

adopt this alternative considered in the 

final rule based on comments received. 

We considered a second set of 

alternatives on state payment of the Part 

B premiums for deemed AFDC 

eligibility groups. As noted previously, 

the AFDC program was repealed. 

However, states must still consider 

certain Medicaid beneficiaries as 

deemed recipients of AFDC (that is, 

individuals covered under section 1931 

of the Act and children covered under 

title IV–E for the Act) for the purposes 

of Medicaid eligibility determinations. 

All states except one have opted to treat 

all deemed recipients of the former 

AFDC program as cash assistance 

recipients for buy-in. We considered 

proposing to require all states to include 

all deemed AFDC eligibility groups as 

deemed recipients of cash assistance. 

However, we chose not to propose such 

a change at this time to consider the 

broader implications for states and 

beneficiaries, but we request comments 

for consideration for the final rule on 

the operational, fiscal, and beneficiary 

impacts of such a proposal. 

b. Buy-In Programs in the U.S. 

Territories (§ 407.43) 

We considered updating § 407.43, 

which governs buy-in coverage groups 

for the four U.S. territories of Puerto 

Rico, American Samoa, U.S. Virgin 

Islands, and Guam,46 similar to our 

proposal to streamline and clarify buyin coverage groups in § 407.42, and 

might adopt this alternative considered 

in the final rule based on comments 

received. However, because there are 

special considerations in the territories, 

we chose not to propose changes at this 

time. For example, unlike the 50 states 

and DC, federal Medicaid funding is 

capped for the five U.S. territories 

(American Samoa, Guam, the 

Commonwealth of the Northern Mariana 

Islands (CNMI), Puerto Rico, the U.S. 

Virgin Islands) under section 1108 of 

the Act. Additionally, Guam, Puerto 

Rico, and the U.S. Virgin Islands are not 

required to cover QMBs under 

1905(p)(4)(A) of the Act. American 

Samoa and the CNMI likewise do not 

cover QMBs as permitted by waivers 

under section 1902(j) of the Act. 

We seek comments for consideration 

in the final rule on whether updating 

the buy-in coverage groups in § 407.43 

with a more succinct framework would 

aid Medicaid agencies in the U.S. 

territories in administering their buy-in 

programs and improve beneficiary 

experiences. 

c. Months of Premiums for Which SSA 

May Bill Beneficiaries When Buy-In 

Ends (§ 407.48(c)) 

We considered proposing 

modifications to § 407.48(c) to further 

limit the number of month of premiums 

for which SSA may bill beneficiaries 

when buy-in ends. As background, due 

to delays in buy-in data exchange 

between states, CMS, and SSA, states 

often continue to pay Medicare Part B 

premiums for beneficiaries after they 

lose eligibility for Medicaid and buy-in. 

When federal systems eventually 

process the buy-in termination, SSA 

begins charging the beneficiary for Part 

B premiums, and CMS refunds the state 

for those same premiums. Since 1972, 

federal regulations have specified that, 

after buy-in ends, SSA can retroactively 

recoup up to 2 months of premiums 

from the individual’s Social Security 

benefits (any premiums for months 

further in the past remain the 

responsibility of the state).47 In practice, 

SSA deducts 3 months of premiums at 

a time to account for 2 months 

retroactive premiums plus the current 

processing month. This can jeopardize 

the individual’s ability to pay for food 

and rent in the first month, increasing 

the risks of hunger or eviction. We did 

not formally propose a change at this 

time because we need more time to 

consider how to best structure a 

proposal that balances beneficiary 

protections with statutory compliance 

and fiscal considerations. We welcome 

comments to inform future rulemaking 

on this topic. 

d. State Payment of Medicare Premiums 

When Medicare Benefits Are Not 

Available (§§ 406.26 and 407.40) 

We considered revising § 406.26 and 

§ 407.40 to remove premium liability for 

states in other situations in which 

Medicare benefits are not available. The 

2009 decision in NY v. Sebelius 

enjoined CMS from billing New York 

during periods of retroactive Medicare 

eligibility in which the state would not 

benefit from Medicare (that is, it was too 

late for Medicare benefits to be 

provided). We believe that there may be 

similar situations in which Medicare 

eligibility can be established but 

Medicare benefits would not be 

provided. For example, individuals who 

are incarcerated or residing oversees 

may still retain entitlement to Medicare 

but be ineligible for payment for 

services because of their status. We 

request comment on the implications of 

limiting liability for states because 

Medicare is unavailable in these two 

examples or any others, and might 

adopt this alternative considered in the 

final rule based on comments received. 

III. Collection of Information 

Requirements 

Under the Paperwork Reduction Act 

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

we are required to provide 60-day notice 

in the Federal Register and solicit 

public comment before a ‘‘collection of 

information’’ requirement is submitted 

to the Office of Management and Budget 


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(OMB) for review and approval. For the 

purposes of the PRA and this section of 

the preamble, collection of information 

is defined under 5 CFR 1320.3(c) of the 

PRA’s implementing regulations. 

To fairly evaluate whether an 

information collection should be 

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

of the PRA requires that we solicit 

comment on the following issues: 

• The need for the information 

collection and its usefulness in carrying 

out the proper functions of our agency. 

• The accuracy of our estimate of the 

information collection burden. 

• The quality, utility, and clarity of 

the information to be collected. 

• Recommendations to minimize the 

information collection burden on the 

affected public, including automated 

collection techniques. 

Through this rulemaking we are 

soliciting public comment on each of 

these issues for the proposed provisions 

that have collection of information 

implications. 

A. Wage Estimates 

To derive average costs for 

individuals, we used data from the U.S. 

Bureau of Labor Statistics’ (BLS) May 

2021 National Occupational 

Employment and Wage Estimates for 

our salary estimates (www.bls.gov/oes/ 

current/oes_nat.htm). In this regard, 

Table 1 presents BLS’ mean hourly 

wage, our estimated cost of fringe 

benefits and overhead, and our adjusted 

hourly wage. 

TABLE 1—NATIONAL OCCUPATIONAL EMPLOYMENT AND WAGE ESTIMATES

Occupation title Occupation 

code 

Mean 

hourly wage 

($/hr) 

Fringe 

benefits and 

overhead 

($/hr) 

Adjusted 

hourly wage 

($/hr) 

All Occupations ................................................................................................ 00–0000 28.01 n/a n/a 

The mean wage under All 

Occupations applies to a group of 

respondents that varies widely from 

working and nonworking individuals 

and by respondent age, location, years 

of employment, educational attainment, 

and other factors. We are not adjusting 

this figure for fringe benefits and 

overhead since the individual’s 

enrollment activities would occur 

outside the scope of their employment, 

should they be employed. 

B. Proposed Information Collection 

Requirements (ICRs) 

The following topics are listed in the 

order of their appearance in section II of 

this preamble. 

1. ICRs Regarding Beneficiary 

Enrollment Simplification (§§ 406.27 

and 407.23) 

The following proposed changes will 

be submitted to OMB for review under 

control number 0938–TBD1 (CMS– 

10797). 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. The control 

number’s expiration date will be issued 

by OMB upon their approval of our final 

rule’s collection of information request. 

As described in section II.A. of this 

rule, we are proposing to amend 

§§ 406.27 and 407.23 to provide special 

enrollment periods (SEPs) for 

individuals experiencing an exceptional 

condition to enroll in Medicare 

premium Part A and Part B. To utilize 

these new SEPs, an individual would 

have to submit an enrollment request 

via a new enrollment form. The form 

would be used by individuals who have 

missed an enrollment period due to an 

exceptional condition to enroll in Part A 

and/or Part B (see section II.A. of this 

preamble for a more detailed 

discussion). 

As part of the PRA process, the 

proposed form (CMS–10797) will be 

made available for public review and 

comment (see section III.D. of this 

preamble for additional information). 

We estimate that it would take an 

individual approximately 15 minutes 

(0.25 hr) to complete the form, pull 

together any required supporting 

documentation, and submit the 

completed form to CMS. 

Due to the newness of the proposed 

SEPs, CMS does not have precise data 

to estimate the number of individuals 

that may enroll under the new 

exceptional condition SEPs. However, 

we believe that the closest equivalent is 

using the number of individuals 

enrolled during the GEP because the 

SEPs provide an opportunity to enroll 

outside of the GEP. 

TABLE 2—GEP ENROLLMENTS FROM 2016–2020 

Year 

Individuals enrolling 

in premium Part A 

during the GEP 

Individuals enrolling 

in Part B 

during the GEP 

Total Part A and B 

GEP enrollments 

2016 ................................................................................................. 6,546 102,935 109,481 

2017 ................................................................................................. 2,021 99,728 101,749 

2018 ................................................................................................. 1,819 98,473 100,292 

2019 ................................................................................................. 2,223 104,808 107,031 

2020 ................................................................................................. 2,221 103,373 105,594 

Total .......................................................................................... 14,830 509,317 524,147 

5-Year Average ........................................................................ 2,966 101,863 104,829 

Based on these data, we estimate that 

the average number of GEP enrollments 

per year is 2,966 for premium Part A 

and 101,863 for Part B (totaling 104,829 

annually). We also assume that only a 

portion of the enrollments would 

involve an SEP enrollment request since 

the new SEPs are applicable only for 

exceptional conditions. Assuming that 

30 percent of individuals who normally 

would have had to wait until the GEP 

to enroll would now be eligible using an 

SEP would result in 31,449 (104,829 

enrollments × 0.30) SEP requests 

annually. As such, we estimate an 


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annual ongoing burden of 7,862 hours 

(31,449 requests × 0.25 hr/request) at a 

cost of $220,214.62 (7,862 hr × $28.01/ 

hr). 

2. ICRs Regarding Extended Months of 

Coverage of Immunosuppressive Drugs 

for Kidney Transplant Patients 

(§§ 407.57, 407.59, 407.62, and 407.65) 

With regard to our proposed Part B– 

ID benefit attestation requirements, the 

following proposed changes will be 

submitted to OMB for review under 

control number 0938–TBD2 (CMS– 

10798). 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. The control 

number’s expiration date will be issued 

by OMB upon their approval of our final 

rule’s collection of information request. 

With regard to our proposed 

requirements for termination of the Part 

B–ID benefit, the following proposed 

changes will be submitted to OMB for 

review under control number 0938– 

0025 (CMS–1763). 

Our proposed enrollment reporting 

requirement will be submitted to OMB 

for review under control numbers 0938– 

0958 (CMS–10143) and 0938–0345 

(CMS–R–284). 

a. Attestations (CMS–10798, OMB 

0938–TBD2) 

As described in section II.B of this 

rule, Congress enacted section 402 of 

the CAA, amending sections 226A, 

1836, 1837, 1838, 1839, 1844, 1860D–1, 

1902, and 1905 of the Act to provide 

immunosuppressive drug coverage for 

certain individuals whose Medicare 

entitlement based on ESRD would 

otherwise end 36 months after the 

month in which they received a 

successful kidney transplant. We 

propose as a condition of enrollment, in 

§§ 407.57 and 407.59 of this rule and as 

required in section 402 of the CAA, that 

an individual must attest that (a) they 

are not enrolled and do not expect to 

enroll in coverage described in 

proposed § 407.55, and (b) they will 

notify the Commissioner within 60 days 

of enrollment in such other coverage. 

To facilitate deemed enrollment into 

the Part B–ID benefit, eligible 

beneficiaries whose coverage will be 

terminating 36 months after the month 

of a successful kidney transplant will be 

provided information about the Part B– 

ID benefit, and informed that they can 

enroll in this coverage by attesting that 

they do not have other excepted 

coverage. We plan to include 

information about the Part B–ID benefit 

in the pre-termination notice, as 

discussed in section II.B.2.b. 

‘‘Determination of Eligibility’’ of this 

proposed rule, and include instructions 

for individuals to enroll in the Part B– 

ID benefit, including how to provide the 

required attestation. We, along with 

SSA believe that a verbal (telephonic) 

method would be the most efficient 

method for a beneficiary to provide the 

attestation required to enroll in the Part 

B–ID benefit. It is easily accessible and 

would avoid potential delays in an 

individual receiving this vital coverage, 

as it would not be interrupted or 

delayed by disruptions in mail or other 

unforeseen circumstances. 

If the individual is not amenable to 

the verbal attestation, they can visit the 

website address provided to download a 

PDF-fillable version of the form to 

submit to SSA, or call SSA to request a 

paper form. 

The attestation options would also be 

available for individuals who were 

previously terminated from Medicare 

based on ESRD after 36 months, or 

individuals who are reenrolling into the 

Part B–ID benefit for coverage of 

immunosuppressive drugs. 

We expect that the population of 

individuals eligible for the Part B–ID 

benefit will use all available options 

(telephonic attestation, completion and 

submission of website-accessed PDFfillable forms, and completion of paper 

forms requested from CMS or SSA) to 

provide the required attestation to SSA. 

We expect that each of the options for 

providing the required attestation will 

require approximately the same burden. 

We estimate that individuals attesting 

telephonically or via a paper or .pdf 

attestation form would have the same 

burden of 10 minutes (0.167 hr) per 

response. 

CMS’s Office of the Actuary (OACT) 

expects an average of 767 individuals, 

whose Medicare entitlement based on 

ESRD which ended 36-months after the 

month in which they received a 

successful kidney transplant, to request 

enrollment in the Part B–ID benefit from 

2023 through 2025. This estimate was 

provided by CMS actuaries based on 

historical information provided by SSA 

on the number of individuals who had 

prior Medicare Part A coverage and a 

kidney transplant between 2001 and 

2019, and then making downward 

adjustments to account for those 

individuals who are deceased or who 

are anticipated to have other 

comprehensive coverage and would not 

be eligible for the Part B–ID benefit. The 

overall results of applying these 

assumptions is that roughly 1,800 

individuals would be enrolled in the 

Part B–ID benefit in 2023, with an 

estimated growth of 250 enrollees each 

year thereafter. This would equate to 

approximately 2,300 individuals 

enrolling in the Part B–ID benefit from 

2023 through 2025, or an annual 

estimated enrollment of 767 

individuals. The burden associated with 

the Part B–ID benefit is the time 

required to complete and submit an 

attestation. We estimate a total annual 

burden of 128 hours (767 Part B–ID 

enrollees * 0.167 hr/response) at a cost 

of $3,585 (128 hr * $28.01/hr). 

As part of the PRA process, the 

proposed form and telephonic script 

(CMS–10798) will be made available for 

public review and comment (see section 

III.D. of this preamble for additional 

information). 

b. Termination of the Part B–ID Benefit 

(CMS–1763, OMB 0938–0025) 

As proposed in § 407.62 of this rule, 

individuals can voluntarily terminate 

their Part B–ID benefit at any time by 

notifying SSA. Primarily, we are 

proposing that an individual would 

contact SSA to request termination, 

either telephonically, or by visiting an 

SSA field office. We are also proposing 

that if an individual is not amenable to 

contacting SSA to terminate their Part 

B–ID benefit, they can access the CMS 

or SSA website and print, sign and mail 

the form to SSA, or call SSA to request 

a paper form to submit their request. We 

expect that all available options (SSA 

contact, completion and submission of 

website-accessed form, and completion 

of paper form requested from CMS or 

SSA) to request a termination from the 

Part B–ID benefit will be used by 

beneficiaries. We expect that each of the 

options for requesting a termination 

from the Part B–ID benefit will require 

approximately the same burden, namely 

10 minutes (0.167 hr) per response. 

Currently, individuals who are 

requesting termination of premium 

Hospital Insurance (Part A) or 

termination of Supplementary Medical 

Insurance (Part B) or both can complete 

the CMS–1763 form. While we are 

proposing to revise the form to include 

termination of the Part B–ID benefit, we 

are not proposing to change our 

currently approved per response time 

estimate of 10 minutes (0.167 hours) per 

response. 

We have limited means of estimating 

how many individuals will opt to 

terminate their Part B–ID benefit as this 

immunosuppressive drug benefit is yet 

to be implemented—the statutory 

effective date is January 1, 2023. 

However, for estimation purposes, we 

assume an average of 10 percent of the 

individuals enrolled in the Part B–ID 

benefit will voluntarily disenroll. As 

discussed in section III.B.2.a. of this 

proposed rule, OACT estimates that 


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48 Data source: ELMO, 12/3/2021. 

approximately 767 eligible individuals 

will enroll in the Part B–ID benefit 

annually from 2023–2025, we estimate 

that 77 of these individuals (767 eligible 

individuals × 0.10) will voluntarily 

terminate their Part B–ID benefit. This 

would not include individuals who are 

involuntarily terminated from the Part 

B–ID benefit because CMS or SSA 

determined that they had other coverage 

that made them ineligible for the Part B– 

ID benefit, or because they failed to pay 

the required premium. Also excluded 

from this number are individuals who 

will obtain Medicare coverage based on 

age, disability, or ESRD status, and 

therefore, will not remain enrolled in 

the Part B–ID benefit, and individuals 

who die. Our methodology was to 

estimate the total Part B terminations as 

a percent of total Part B enrollments 

annually from 2019–2021 (about 3 

percent).48 We then assumed that the 

Part B–ID benefit terminations would be 

more frequent, as we anticipate that 

individuals may explore options 

available for more comprehensive 

coverage, given an individual’s other 

post-transplant associated expenses. 

Therefore, we increased that percentage 

to 10 percent. We then used OACT’s 

growth estimate of 767 enrollments 

annually between 2023 and 2025 to 

estimate that 10 percent of those 

enrollments, or approximately 77 

annually, would terminate their Part B– 

ID benefit voluntarily. 

Based on voluntary terminations of 

the Part B–ID benefit only, by the 

methods described previously, we 

expect a total annual burden of 13 hours 

(77 requests to terminate the Part B–ID 

benefit × 0.167 hr) at a cost of $364 (13 

hr × $28.01/hr) per year. Although, we 

have limited means to determine the 

actual number of individuals who will 

terminate their coverage; however, as 

we implement this benefit, we will have 

data to better adjust (if/when needed) 

our burden estimates in the future. 

As part of the PRA process, the 

proposed revisions to form CMS–1763 

will be made available for public review 

and comment (see section III.D. of this 

preamble for additional information). 

c. Reporting of MSP Part B–ID Benefit 

Enrollment Information (CMS–10143, 

OMB 0938–0958) and (CMS–R–284, 

OMB 0938–0345) 

As described in section II.B. of this 

rule, under section 402(f) of the CAA, 

we are proposing to modify three 

Medicare Savings Programs (MSP) 

eligibility groups (Qualified Medicare 

Beneficiary (QMB), Specified LowIncome Medicare Beneficiary (SMLB) 

and Qualifying Individual (QI)) to pay 

premiums and, if applicable, cost 

sharing for low-income beneficiaries 

enrolled in Part B–ID (MSP Part B–ID). 

Under the MSP Part B–ID benefit, states 

will pay the Part B–ID benefit premiums 

and cost sharing for QMBs, and Part B– 

ID benefit premiums for SLMBs and QIs. 

Once states enroll individuals in a 

MSP Part B–ID benefit, states will need 

to report the enrollment information to 

CMS. We anticipate enrollment in a 

MSP Part B–ID benefit mainly occurring 

in the 12 states that, as of December 

2021, have elected to not expand 

Medicaid eligibility to adults with 

income up to 138 percent of the FPL 

(‘‘non-expansion states’’). Those 12 

states are Alabama, Florida, Georgia, 

Kansas, Mississippi, North Carolina, 

South Carolina, South Dakota, 

Tennessee, Texas, Wisconsin and 

Wyoming. 

Given that the income requirements 

for QMB, SLMB, and QI are all below 

138 percent of the FPL, individuals 

losing MSP coverage in one of those 

eligibility groups due to loss of 

entitlement for ESRD Medicare in 

expansion states would be eligible for 

Medicaid in the adult group under 

§ 435.119. Because the adult group is a 

full-benefit Medicaid eligibility group 

providing immunosuppressive drug 

coverage, individuals who enroll in the 

adult group would not be eligible for the 

Part B–ID benefit. Although some 

expansion states may use income 

disregards to boost MSP income limits 

above the income threshold for the adult 

group, these individuals would then be 

eligible for Advanced Payment of Tax 

Credits (APTCs) and Cost Sharing 

Reductions (CSRs) to purchase health 

insurance through a Qualified Health 

Provider (QHP) in the Exchange 

established by the Affordable Care Act 

and implemented at 45 CFR part 155. As 

a result, we do not believe these 

individuals would elect to enroll in a 

MSP Part B–ID benefit when they are 

able to enroll in more comprehensive 

coverage that is subsidized in the 

Exchange. Similarly, in non-expansion 

states, we do not expect anyone who 

can qualify for subsidized insurance in 

the Exchange to enroll in a MSP Part B– 

ID benefit. 

As such, we believe individuals who 

fall into the coverage gap in the nonexpansion states—that is individuals 

whose income prevents them from 

receiving Medicaid coverage, but is too 

low to qualify for APTC or CSR in the 

Exchange—will enroll in a MSP Part B– 

ID benefit. In the MSP eligibility groups, 

the only individuals who would fall 

into this category are QMBs. We 

reviewed internal data from 2021 to 

determine how many individuals were 

enrolled in MSPs, had Medicare 

entitlement based on ESRD, and were 36 

months post-transplant. Applying this 

data to an annual timeframe would 

yield 276 individuals enrolled as QMBonly, all in non-expansion states. 

However, because not everyone will 

necessarily enroll, based on our 

actuaries’ estimate, we anticipate only 

250 individuals per year enrolling in the 

Part B–ID benefit, all of whom will 

enroll through the QMB Part B–ID 

benefit. Because we anticipate all of 

these individuals will initially be 

enrolled in MSPs and simply converting 

over to a MSP Part B–ID benefit when 

they lose Medicare entitlement based on 

ESRD and then enrolling in the Part B– 

ID benefit, we do anticipate that there 

will be any new or revised burden for 

these enrollees to apply for a MSP Part 

B–ID benefit other than the initial 

enrollment in the Part B–ID benefit. 

Rather, the burden for enrolling these 

individuals will fall on the state when 

it is performing a redetermination of 

Medicaid eligibility. As described in 

section II.B of this rule, when an 

individual loses Medicaid eligibility, a 

state must already perform a 

redetermination under all categories of 

eligibility per § 435.916(f)(1). As such, 

we do not anticipate any new or revised 

burden on states enrolling these 

individuals either. 

We also believe there will not be any 

new or revised reporting burden on 

states for the MSP Part B–ID benefit 

individuals because they will receive 

coverage under existing MSP eligibility 

groups (that is, QMB, SLMB and QI). 

States already submit enrollment 

information for all current MSP 

enrollees through Medicare 

Modernization Act (MMA) under 

control number 0938–0958 (CMS– 

10143) and Transformed Medicaid 

Statistical Information System (T–MSIS) 

under control number 0938–0345 

(CMS–R–284) files, and we do not 

believe including the new MSP Part B– 

ID benefit enrollees in the MMA and T– 

MSIS file submissions to CMS will 

result in any new burden. For the MMA 

file, we will inform states to report MSP 

Part B–ID benefit enrollees using the 

exact same code as for any other MSP 

enrollee, but that CMS will determine 

MSP Part B–ID benefit enrollment by 

examining both the MSP code and the 

Medicare enrollment reason code. For 

the T–MSIS file, we will inform states 

to report MSP Part B–ID benefit 

enrollees using the exact same code as 

for any other MSP enrollee, but to fill 

in a different value for another field. 

Because we expect no coding changes to 


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49CMS–40–D was obsoleted 3/2022. 50CMS- 40–F was obsoleted in 2008. 

either MMA or T–MSIS files, we do not 

anticipate that any system changes 

would be necessary for submitting these 

files to CMS. 

Because we are not anticipating any 

new reporting requirements or burden 

as a result of these changes, we will not 

be making any changes to approved 

CMS–10143, OMB 0938–0958 or CMS– 

R–284, OMB 0938–0345. 

3. ICRs Regarding Simplifying 

Regulations Related to Medicare 

Enrollment Forms (§§ 406.7 and 407.11) 

As described in section II.C. of this 

rule, we are proposing to revise §§ 406.7 

and 407.11 to remove all references to 

specific enrollment forms that are used 

to apply for entitlement under Medicare 

Part A and enrollment under Medicare 

Part B. This is an administrative change 

that would have no impact on the use 

or availability of these forms and would 

not impose or affect any information 

collection requirements or burden. CMS 

is proposing to remove references to the 

following four forms that are currently 

OMB approved and are still in use 

under the approved scope: 

• Medicare Part A Enrollment Forms 

(§ 406.7) 

++ CMS–18–F–5 (OMB 0938–0251)— 

Application for Hospital Insurance 

Entitlement 

++ CMS–43 (OMB 0938–0080)— 

Application for Health Insurance 

Benefits under Medicare for 

Individuals with End Stage Renal 

Disease (ESRD) 

• Medicare Part B Enrollment forms 

(§ 407.11) 

++ CMS–18–F–5 (OMB 0938–0251)— 

Application for Hospital Insurance 

Entitlement 

++ CMS–4040 (OMB 0938–0245)— 

Application for Enrollment in the 

Supplementary Medical Insurance 

Program 

++ CMS–40–B (OMB 0938–1230)— 

Application for Enrollment in 

Medicare Part B (Medical Insurance) 

++ CMS–40–D 49—Application for 

Enrollment in the Supplementary 

Medical Insurance Program. 

++ CMS–40–F 50—Application for 

Medical Insurance 

C. Summary of Annual Burden 

Estimates for Proposed Changes 

TABLE 3—PROPOSED ANNUAL REQUIREMENTS AND BURDEN ESTIMATES

Regulation 

section(s) 

under Title 42 

of the CFR 

OMB control No. 

(CMS ID No.) Respondents Total responses 

Burden per 

response 

(hours) 

Total time 

(hours) 

Labor 

cost 

($/hr) 

Total cost 

($) 

§§ 406.27 and 

407.22.

0938–TBD1 (CMS–10797) ............ 31,449 31,449 0.25 ............ 7,862 28.01 220,215 

§ 407.59 ............. 0938–TBD2 (CMS–10798) ............ 767 767 0.167 .......... 128 28.01 3,585 

§ 407.62 ............. 0938–0025 (CMS–1763) ............... 77 77 0.167 .......... 13 28.01 364 

Total ............ ........................................................ 32,293 32,293 Varies ......... 8,003 28.01 224,164 

D. Submission of Comments 

We have submitted a copy of this rule 

to OMB for its review of the rule’s 

proposed information collection 

requirements and burden. The 

requirements would not be effective 

until they have been approved by OMB. 

To obtain copies of the supporting 

statement and any related forms for the 

proposed collections previously 

discussed, please visit CMS’s website at 

https://www.cms.gov/Regulationsand

Guidance/Legislation/Paperwork

ReductionActof1995/PRAListing.html, 

or call the Reports Clearance Office at 

(410) 786–1326. 

We invite public comments on the 

proposed information collection 

requirements and burden. 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–4199–P) and where applicable 

the ICR’s CFR citation, CMS ID number, 

and OMB control number. 

IV. Regulatory Impact Analysis 

A. Statement of Need 

This proposed rule would implement 

certain Medicare-related provisions of 

the CAA, as well as propose other 

enrollment-related changes. Section 

120(a)(1) of the CAA revised the 

entitlement periods for individuals who 

enroll in Medicare Part B in the last 3 

months of their IEP, deemed IEP, or 

during the GEP, beginning January 1, 

2023. Under longstanding Medicare 

rules, the effective date of entitlement 

varies depending on whether the 

individual is enrolling during the IEP or 

GEP and when an enrollment is made 

during each specific enrollment period 

which could cause confusion. The 

proposed changes should help eliminate 

this potential confusion by establishing 

a straightforward and uniform policy 

regarding Part A and Part B entitlement 

start dates. 

Section 120 of the CAA also gives the 

Secretary the authority to establish SEPs 

for exceptional conditions. Under 

current rules, individuals are only able 

to enroll outside of the IEP or GEP either 

through states enrolling them through 

the buy-in process under section 1843 of 

the Act or by using a limited number of 

SEPs and, outside of that, relief is only 

available in instances where an 

individual did not enroll due to a 

Federal Government error. Other than 

these very specific scenarios, no 

exceptions are legally permissible. 

The proposed changes give the 

Secretary the flexibility to address other 

situations where a beneficiary missed an 

enrollment period and mirrors the 

authority that has long been available 

under the Medicare Part C and Part D 

programs. We believe this provision is 

likely to improve access to continuous 

coverage for individuals covered by 

Medicare Part A and Part B, either 

through expediting the effective date of 

coverage or by allowing for 

opportunities to enroll in coverage 

sooner. Therefore, we anticipate this 

proposal having a positive impact on 

communities who experience social risk 

factors impacted by lack of continuous 

health coverage. Our proposal fulfills 

the goals of the January 28, 2021 

Executive Order on Advancing Racial 

Equity and Support for Underserved 

Communities through The Federal 

Government, which directs the 

Secretary of the Department of Health 

and Human Services, among other 

things, to pursue a comprehensive 

approach to advancing equity for all, 

including people of color and others 

who have been historically underserved, 


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51https://www.whitehouse.gov/briefing-room/ 

presidential-actions/2021/01/20/executive-orderadvancing-racial-equity-and-support-forunderserved-communities-through-the-federalgovernment/. 

marginalized, and adversely affected by 

persistent poverty and inequality.51

Further, section 402 of the CAA 

extends immunosuppressive drug 

coverage for individuals whose 

Medicare entitlement based on ESRD 

ends 36-months after the month in 

which they received a successful kidney 

transplant by providing 

immunosuppressive drug coverage 

under Medicare Part B for certain 

individuals. Under current rules, an 

individual loses Medicare coverage 36 

months after a successful transplant 

(unless they are otherwise entitled to 

the coverage), but it does not negate the 

need for an individual to take 

immunosuppressive drugs long-term. 

Not having coverage for 

immunosuppressive drugs can cause 

individuals to reduce their usage in 

order to make their medication last 

longer or they may stop taking the 

medications entirely which can lead to 

organ rejection and transplant failure. 

The new Part B–ID benefit helps remedy 

this situation by ensuring that these 

individuals have access to 

immunosuppressive drug coverage for 

the rest of their life. Even with access to 

immunosuppressive drug benefits, lowincome individuals may be unable to 

afford these immunosuppressive drugs 

due to their high cost. By extending 

certain MSP programs to this new Part 

B–ID benefit, states will cover the costs 

of the Part B–ID premiums and in some 

cases, cost-sharing as well. In particular, 

this MSP Part B–ID coverage would help 

individuals who lose Medicare coverage 

36 months after a successful transplant 

and live in a non-expansion state with 

income too high to receive subsidies for 

purchasing a health plan in the 

Exchange. Without this MSP Part B–ID 

coverage, these individuals may be 

unable to pay Part B–ID premiums and 

cost-sharing and as such, at higher risk 

of transplant failure. As such, 

supporting continued Medicaid 

coverage is consistent with the 

Executive Order on Strengthening 

Medicaid and the Affordable Care Act. 

In addition to implementing various 

sections of the CAA, we seek to 

modernize the Medicare Savings 

Programs through which states cover 

Medicare premiums and cost-sharing 

and update the various federal 

regulations that affect a state’s payment 

of Medicare Part A and B premiums for 

beneficiaries enrolled in the Medicare 

Savings Programs and other Medicaid 

eligibility groups. We think it is 

important to update these policies now 

to reflect statutory changes over the last 

three-plus decades as well as to codify 

certain administrative practices that 

have evolved over the years. We 

anticipate our proposals will also 

advance health equity by improving low 

income individuals’ access to 

continuous, affordable health coverage 

and use of needed health care consistent 

with the Executive Order on Advancing 

Racial Equity and Support for 

Underserved Communities Through the 

Federal Government. We also believe 

that our proposals would improve the 

customer service experience of dually 

eligible beneficiaries consistent with the 

goals of the Executive Order on 

Transforming Federal Customer 

Experience and Service Delivery to 

Rebuild Trust in Government. Finally, 

we believe these are commonsense, 

good government proposals that will 

also reduce administrative burden on 

states and promote transparency and 

clarity regarding state payment of 

premiums or buy-in. For example, 

consolidating state buy-in policy in one 

document, the Medicaid state plan, will 

make it easier for states to update their 

buy-in policy and promote transparency 

for the public to better understand 

states’ buy-in policy. 

B. Overall Impact 

We have examined the impacts of this 

rule as required by Executive Order 

12866 on Regulatory Planning and 

Review (September 30, 1993), Executive 

Order 13563 on Improving Regulation 

and Regulatory Review (January 18, 

2011), the Regulatory Flexibility Act 

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

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

202 of the Unfunded Mandates Reform 

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

104–4), Executive Order 13132 on 

Federalism (August 4, 1999), 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). 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 $100 million 

or more in any 1 year, or adversely and 

materially affecting a sector of the 

economy, productivity, competition, 

jobs, the environment, public health or 

safety, or state, local or tribal 

governments or communities (also 

referred to as ‘‘economically 

significant’’); (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 novel legal or 

policy issues arising out of legal 

mandates, the President’s priorities, or 

the principles set forth in the Executive 

Order. 

The RFA requires agencies to analyze 

options for regulatory relief of small 

entities. For purposes of the RFA, small 

entities include small businesses, 

nonprofit organizations, and small 

governmental jurisdictions. Most 

hospitals and most other providers and 

suppliers are small entities, either by 

nonprofit status or by having revenues 

of less than $7.5 million to $38.5 

million annually. Individuals and states 

are not included in the definition of a 

small entity. We are not preparing an 

analysis for the RFA because we have 

determined, and the Secretary certifies, 

that this proposed rule would not have 

a significant economic impact on a 

substantial number of small entities. 

This rule’s costs would predominantly 

fall on the Federal government and 

states, and the associated burden falls 

primarily on the Federal government 

and individuals. 

The Unfunded Mandates Reform Act 

of 1995 (Section 202(a)) requires us to 

prepare a written statement, which 

includes an assessment of anticipated 

costs and benefits, before proposing 

‘‘any rule that includes any Federal 

mandate that may result in the 

expenditure by State, local, and tribal 

governments, in the aggregate, or by the 

private sector, of $100,000,000 or more 

(adjusted annually for inflation) in any 

one year.’’ The current threshold after 

adjustment for inflation is $165 million, 

using the most current (2022) Implicit 

Price Deflator for the Gross Domestic 

Product. This proposed rule, if 

finalized, would not result in 

expenditures that meet or exceed this 

amount. 

A regulatory impact analysis (RIA) 

must be prepared for major rules with 

economically significant effects ($100 

million or more in any 1 year). These 

proposed regulations are not 

economically significant within the 

meaning of section 3(f)(1) of Executive 

Order 12866. However, OMB has 

determined that the actions are 

significant within the meaning of 

section 3(f)(4) of the Executive Order. 

Therefore, OMB has reviewed these 

proposed regulations, and the 


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52 Kadatz, M., Gill, J.S., Gill, J., Formica, R.N., & 

Klarenbach, S. (2019). Economic Evaluation of 

Extending Medicare Immunosuppressive Drug 

Coverage for Kidney Transplant Recipients in the 

Current Era. Journal of the American Society of 

Nephrology, 31(1), 218–228. https://doi.org/ 

10.1681/asn.2019070646. 

See https://aspe.hhs.gov/sites/default/files/ 

migrated_legacy_files/189276/Savings_From_

Extending_Coverage_For_Immunosuppressive_

Drugs_Final.pdf from ASPE discussing cost benefits 

of extending drug coverage. 

Department has provided the following 

assessment of their impact. The 

following chart demonstrates the year 

by year amounts, broken out by cost for 

drugs and savings 

C. Detailed Economic Analysis 

1. Beneficiary Enrollment Simplification 

(§§ 406.22 and 407.22) 

We are proposing revisions to 

implement section 120 of the CAA. 

These revisions make the effective date 

of coverage the first of the month 

following an individual’s enrollment 

during their IEP or during the GEP. We 

are also proposing SEPs that would 

provide individuals who meet certain 

exceptional conditions an opportunity 

to enroll without having to wait for the 

GEP. 

a. Benefits 

The changes to the IEP and GEP 

coverage dates would provide Medicare 

beneficiaries access to coverage more 

quickly and may allow them faster 

access to needed medical care. The 

newly proposed SEPs for beneficiaries 

who have experienced an exceptional 

condition that caused them to delay 

enrollment in Medicare would also 

provide access to Medicare coverage 

earlier, reducing gaps in coverage, and 

beneficiaries may avoid LEPs by 

utilizing these SEPs. 

b. Costs 

Costs include increased months of 

coverage provided by the new SEPs and 

the earlier effective dates for the IEP and 

GEP and potential loss of LEP revenue. 

As detailed earlier, we estimate that 

approximately 31,449 individuals 

would be eligible to enroll earlier using 

the proposed exceptional condition 

SEPs. 

In addition, CMS does not foresee an 

increase of costs to Medicare 

beneficiaries related to Part B premium 

increases. Specifically, we do not expect 

beneficiaries enrolling under these new 

provisions to have higher-than-average 

costs, so we assume this provision will 

not have an impact on the Part B 

premium. 

c. Transfers 

The CAA also modified section 

1839(b) of the Act to exempt individuals 

who enroll pursuant to an SEP for 

exceptional conditions established 

under section 1838(m) of the Act, from 

paying an LEP. Therefore, beneficiaries 

who are able to utilize the newly 

established SEPs will benefit from an 

avoidance of an LEP. Based on the data 

described in section III B.1 of this 

proposed rule, we estimate 

approximately 31,449 premium Part A 

and Part B enrollments annually under 

the proposed SEPs. We anticipate that 

the loss of revenue associated with LEP 

and the additional months of coverage 

associated with individuals using the 

new SEPs will be a cost to the Medicare 

Trust Fund. Due to variables that CMS 

cannot predict, such as the timing of 

when beneficiaries will use an SEP to 

enroll in Medicare or what their LEP 

would have been had the SEP not been 

made available, CMS is not able to 

estimate an exact cost to the Trust 

Funds that will result from enrolling 

beneficiaries through these proposed 

SEPs. However, based on the small 

number of beneficiaries impacted, and 

because this rule proposes that 

individuals will have to miss an 

enrollment period in order to access 

these new SEPs, we expect the 

increased costs to the Medicare to be 

negligible. Further, we note the 

beneficiaries who are enrolled via these 

SEPs would be paying premiums to the 

Trust Fund, which would be revenue 

that might have otherwise gone 

uncollected. 

2. Extended Months of Coverage of 

Immunosuppressive Drugs for Kidney 

Transplant Patients (§§ 407.1, 407.55, 

407.57, 407.59, 407.62, 407.65, 408.20, 

and 423.30) 

We are proposing regulations that 

would establish the new Part B–ID 

benefit. These regulations would 

establish the eligibility requirements 

(including the requirement that the 

individual attest that they do not have 

other disqualifying health coverage), the 

reasons and process for termination of 

coverage, and the basis for the premium 

for the benefit. 

a. Benefits 

The American Society of Nephrology 

and the HHS Assistant Secretary for 

Planning and Evaluation report that 

providing beneficiaries with extended 

access to immunosuppressive drugs 

may reduce any associated costs they 

face from kidney failure, including 

maintaining labor force participation 

and improved quality of life.52

b. Costs 

Extending immunosuppressive drug 

coverage would pose an additional cost 

to Medicare to pay for the additional 

drugs, reduced by the savings associated 

with reduction in reversion to dialysis 

from graft failure. CMS actuaries 

estimate a net cost of $55 million to the 

Medicare program over the period 

2022–2031. This estimate was provided 

by CMS actuaries, based on historical 

information from SSA. SSA’s data 

shows that roughly 165,000 individuals 

had prior Medicare Part A coverage and 

had a kidney transplant between 2001 

and 2019. Removing any individuals not 

currently alive or enrolled in Medicare 

Part A, within SSA’s historical data 

approximately 52,000 individuals 

would remain potentially eligible to 

enroll in Part B–ID. In addition, CMS 

assumes approximately 1,000 

individuals a month will be disenrolled 

from Medicare Part A 36 months after a 

successful transplant. After accounting 

for those individuals who are 

anticipated to have other 

comprehensive coverage, and thus 

would not be eligible for the Part B–ID 

benefit, we assume that of those who 

were terminated from Part A after a 

successful transplant between 2001 and 

2019, roughly 1,050 individuals would 

initially be enrolled in the Part B–ID 

benefit. Using similar assumptions 

about other coverage and those that are 

newly eligible for the benefit (roughly 

12,000 individuals in a year), we 

assume an estimated growth of 250 

enrollees each year thereafter. 

Beneficiaries would also incur potential 

costs associated with the premium 

associated with the additional benefit. 

For beneficiaries enrolled in MSPs for 

coverage of premiums and cost sharing 

of the Part B–ID benefit, states will incur 

premium and cost sharing costs for the 

benefit as well as costs associated with 

systems and other changes needed for 

reporting enrollment in these MSPs as 

described in further detail elsewhere in 

this document. 


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53We note that we did not estimate impacts for 

the territories because currently, they have not 

elected MSP coverage for their residents. As such, 

they would not need to make these changes. 

PART B–ID BENEFIT COSTS AND SAVINGS ESTIMATE

[In millions] 

FY Cost due 

to drugs 

Savings 

due to saved 

transplants 

Total gross 

benefits 

Part B 

premium 

offset 

Net impact 

2022 ..................................................................................... 0 0 0 0 0 

2023 ..................................................................................... 0 0 0 0 0 

2024 ..................................................................................... 5 0 5 0 5 

2025 ..................................................................................... 5 0 5 0 5 

2026 ..................................................................................... 5 0 5 0 5 

2027 ..................................................................................... 5 0 5 0 5 

2028 ..................................................................................... 10 0 10 ¥5 5 

2029 ..................................................................................... 10 0 10 0 10 

2030 ..................................................................................... 10 0 10 0 10 

2031 ..................................................................................... 15 0 15 ¥5 10 

c. Effects of Medicare Saving Programs 

Coverage for Immunosuppressive Drugs 

As described previously, under 

section 402(f) of the CAA, we are 

proposing to modify three MSP 

eligibility groups (QMB, SMLB, and QI) 

to pay premiums and, if applicable, cost 

sharing for low-income beneficiaries 

enrolled in the Part B–ID benefit (MSP 

Part B–ID). Individuals currently 

enrolled as QMBs, SLMBs, and QIs must 

meet income and resource requirements 

in addition to having entitlement to 

Medicare Part A. With this proposed 

change, individuals may enroll in QMB, 

SLMB, and QI for the Part B–ID benefit 

if they are enrolled in the Part B–ID 

benefit and meet the underlying income 

and resource requirements for QMB, 

SLMB, or QI. While states pay Medicare 

Part A and B premiums and cost sharing 

for certain MSP eligibility groups, state 

payment for the MSP Part B–ID benefit 

is limited to Part B–ID benefit premiums 

and/or cost sharing. 

As discussed in more detail in section 

III.B.2. of this proposed rule, due to the 

limited scope of Part B–ID benefit 

entitlement and the income and 

resource eligibility limits for the MSP 

population, we anticipate enrollment in 

the MSP Part B–ID benefit mainly 

occurring in the 12 non-expansion states 

among individuals who qualify as 

QMBs, with about 250 people a year 

enrolling and 1,000 people enrolling 

initially. We estimate the cost of paying 

for the Part B–ID benefit for these 

individuals across all states is 

¥$657,000 (1,250 × (state portion of 

premium (Part B–ID benefit premium 

($1,200) × states’ average FMAP rate) (1– 

0.562)) + state portion of Part B–ID 

benefit cost sharing (20 percent of cost 

of CMS actuarial estimate of 

immunosuppressive drug therapy 

($8,000 × 0.2) × states’ average FMAP 

rate (1–0.562)¥Medicaid drug rebate of 

50 percent of cost of 

immunosuppressive drug therapy 

($8,000 × 0.5) × states’ average FMAP 

rate (1–0.562). In sum, the drug rebate 

will more than offset the state share of 

the Part B–ID benefit premium and cost 

sharing obligations, yielding a net 

savings for states. 

In addition to the liability for the Part 

B–ID benefit premium and cost sharing, 

states will also need to perform the 

following tasks: (1) Modify their systems 

to report MSP Part B–ID benefit 

enrollment on the Third Party Systems 

(TPS) files; (2) modify their internal 

systems to receive and process new 

values in existing fields for Part B–ID 

benefit enrollment in the MMA file, 

TPS, Territories and States Beneficiary 

Query (TBQ), T–MSIS, as well as on 

SSA’s state data exchanges; (3) process 

the change in the premium from the Part 

B standard premium to the Part B–ID 

benefit premium in TPS for billing; (4) 

modify their process to query SSA 

systems to confirm Part B–ID benefit 

enrollment prior to enrolling in the MSP 

Part B–ID benefit; (5) adjust Medicaid 

eligibility systems to include new MSP 

Part B–ID benefit enrollment codes; and 

(6) adjust Medicaid pharmacy claims to 

include this new Part B–ID benefit 

crossover claim. We anticipate all states 

will need to make systems changes and 

test these systems changes 4–6 months 

prior to implementation. 

We estimate that it would take a 

maximum of 12 months of work 

(approximately 2,000 hours) by three 

computer programmers working at a 

BLS mean hourly rate of $94.52 per 

hour to make the necessary systems 

changes. Since we estimate that 50 

states plus the District of Columbia 

(DC) 53 will need to make a plan for 

manual changes, we project an aggregate 

burden of $12,668,326.6 (51 (50 states 

and DC) * 2,000 hrs * $94.52/hr * 3 * 

states’ average FMAP rate). The cost and 

time attributable to these systems 

change will be influenced by whether 

the state is implementing other systems 

changes at the same time and their 

current Medicaid Management 

Information System (MMIS) system 

functionality. Assuming the state 

implements this change in isolation, we 

estimate that this change could take 12 

months. However, if a state makes this 

change as a part of a broader systems 

update, the work specific to the 

proposal could be less burdensome. In 

particular, we note that states need to 

make systems updates under the 

Interoperability and Patient Access final 

rule, 85 FR 25510 (May 1, 2020) to 

comply with 42 CFR 406.26 and 407.40 

to make file transfers daily by April 1, 

2022. 

If states chose to integrate these 

system updates at the same time, they 

could save money. We note that states 

are likely eligible for 90/10 federal 

medical assistance percentage (FMAP) 

for the MMIS as set forth in 

1903(a)(3)(A) of the Act. 

3. Simplifying Regulations Related to 

Medicare Enrollment Forms 

We are proposing to revise §§ 406.7 

and 407.11 to remove references to 

specific enrollment forms that are used 

to apply for entitlement under Medicare 

Part A and enrollment under Medicare 

Part B. This is an administrative change 

that will not impact the use of the 

forms. We do not anticipate a change in 

burden or cost associated with each of 

the forms. 

4. Modernizing State Payment of 

Medicare Premiums Benefits, Costs, and 

Transfers 

To modernize state payment of 

Medicare premiums, we propose several 

changes to regulations at §§ 400.200, 

406.21, 406.26, 407.40 through 48, 

431.625. We also propose to add new 

§§ 435.123 through 435.126 and to 


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revise § 435.4. Almost all of the 

proposed changes are to update the 

regulations to reflect statutory changes 

over the last 3-plus decades, and to 

codify certain administrative practices 

that have evolved over the years. Some 

of the most significant changes include 

replacing obsolete decades-old standalone buy-in agreements with treating 

buy-in provisions in the State plan as 

the State’s buy-in agreement, and 

limiting retroactive Medicare Part B 

premium liability for states for fullbenefit dually eligible beneficiaries. We 

are not projecting any impact for these 

provisions in this Regulatory Impact 

Analysis section because our proposals 

are consistent with current requirements 

and practice. 

D. Regulatory Review Cost Estimation 

We welcome any comments on the 

approach in estimating the number of 

entities which will review this proposed 

rule. Using the wage information from 

the BLS for medical and health service 

managers (Code 11–9111), we estimate 

that the cost of reviewing this rule is 

$110.74 per hour, including overhead 

and fringe benefits (https://www.bls.gov/ 

oes/current/oes_nat.htm). Assuming an 

average reading speed, we estimate that 

it would take approximately 0.5 hours 

for the staff to review half of this 

proposed rule. For each entity that 

reviews the rule, the estimated cost is 

$Y (0.5 hours × $110.74). Therefore, we 

estimate that the total cost of reviewing 

this regulation is $Z ($Y × N). [N is the 

number of estimated reviewers] 

E. Alternatives Considered 

As noted previously, there were a 

number of additional SEPs that were 

considered but were not pursued for 

various reasons (discussed in greater 

length in section II.A.2.f of the 

preamble). For example, we considered 

an SEP for individuals who previously 

decided not to enroll in Medicare but 

now want to enroll outside of the GEP 

or other enrollment period because they 

are experiencing a health event and 

want Medicare coverage. We also 

considered an SEP for individuals who 

lost Medicare coverage due to nonpayment of premiums who are not 

eligible for another SEP or equitable 

relief and now want to re-enroll outside 

of the GEP. Further, several alternatives 

to the State Payment of Medicare 

premium policies and technical changes 

as were proposed and are described in 

sections II.D.1 through D.3 of this 

preamble. For example, we considered 

alternatives to further reduce the 

number of Part B buy-in groups from 

three to two and to limit buy-in liability 

for states in other situations in which 

Medicare benefits are not available, 

such as incarceration and beneficiaries 

who reside overseas. 

V. Response to Comments 

Because of the large number of public 

comments 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. 

Chiquita Brooks-LaSure, 

Administrator of the Centers for 

Medicare & Medicaid Services, 

approved this document on April 21, 

2022. 

List of Subjects 

42 CFR Part 400 

Grant programs—health, Health 

facilities, Health maintenance 

organizations (HMO) Medicaid, 

Medicare Reporting, and recordkeeping 

requirements. 

42 CFR Part 406 

Health facilities, Diseases, and 

Medicare. 

42 CFR Part 407 

Medicare. 

42 CFR Part 408 

Medicare. 

42 CFR Part 410 

Diseases, Health facilities, Health 

professions, Laboratories, Medicare, 

Reporting and, recordkeeping 

requirements, Rural areas, X-rays. 

42 CFR Part 423 

Administrative practice and 

procedure, Emergency medical services, 

Health facilities, Health maintenance 

organizations (HMO), Health 

professionals, Medicare, Penalties, 

Privacy, Reporting and recordkeeping 

requirements. 

42 CFR Part 431 

Grant programs—health, Health 

facilities, Medicaid, Privacy, Reporting 

and recordkeeping requirements. 

42 CFR Part 435 

Aid to Families with Dependent 

Children, Grant programs—health, 

Medicaid, Reporting and recordkeeping 

requirements, Supplemental Security 

Income (SSI), and Wages. 

For the reasons set forth in the 

preamble, the Centers for Medicare & 

Medicaid Services proposes to amend 

42 CFR chapter IV as set forth below: 

PART 400—INTRODUCTION; 

DEFINITIONS 

■ 1. The authority citation for part 400 

is revised to read as follows: 

Authority: 42 U.S.C. 1302 and 1395hh and 

44 U.S.C. Chapter 35. 

■ 2. Section 400.200 is amended by— 

■ a. Adding definitions of ‘‘Medicare 

Savings Programs’’ and ‘‘Qualified 

Individual’’, in alphabetical order; 

■ b. Revising the definition of 

‘‘Qualified Medicare Beneficiary’’; and 

■ c. Adding the definition of ‘‘Specified 

Low-Income Medicare Beneficiary’’ in 

alphabetical order. 

The additions and revision read as 

follows: 

§ 400.200 General definitions. 

* * * * * 

Medicare Savings Programs (MSPs) 

has the same meaning described in 

§ 435.4 of this chapter. 

* * * * * 

Qualifying Individual (QI) means an 

individual described in § 435.125 of this 

chapter. 

Qualified Medicare Beneficiary (QMB) 

means an individual described in 

§ 435.123 of this chapter. 

* * * * * 

Specified Low-Income Medicare 

Beneficiary (SLMB) means an individual 

described in § 435.124 of this chapter. 

* * * * * 

PART 406—HOSPITAL INSURANCE 

ELIGIBILITY AND ENTITLEMENT 

■ 3. The authority citation for part 406 

is revised to read as follows: 

Authority: 42 U.S.C. 1302, 1395i–2, 1395i– 

2a, 1395p, 1395q and 1395hh. 

■ 4. Section 406.7 is revised to read as 

follows: 

§ 406.7 Forms to apply for entitlement 

under Medicare Part A. 

Forms used to apply for Medicare 

entitlement are available free of charge 

by mail from CMS or at any Social 

Security branch or district office or 

online at the CMS and SSA websites. 

An individual who files an application 

for monthly social security cash benefits 

as defined in § 400.200 of this chapter 

also applies for Medicare entitlement if 

he or she is eligible for hospital 

insurance at that time. 

■ 5. Section 406.13 is amended by 

revising paragraph (f)(2) to read as 

follows: 


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§ 406.13 Individual who has end-stage 

renal disease. 

* * * * * 

(f) * * * 

(2) The end of the 36th month after 

the month in which the individual 

received a kidney transplant. Beginning 

January 1, 2023, an individual who is no 

longer entitled to Part A benefits due to 

this paragraph may be eligible to enroll 

in Part B solely for purposes of coverage 

of immunosuppressive drugs as 

described in § 407.55. 

* * * * * 

■ 6. Section 406.21 is amended by 

revising paragraphs (a) and (c)(3) to read 

as follows: 

§ 406.21 Individual enrollment. 

(a) Basic provision. An individual 

who meets the requirements of § 406.20 

(b) or (c), except as provided in 

§ 406.27(b)(2), may enroll for premium 

hospital insurance only during his or 

her— 

(1) Initial enrollment period as set 

forth in paragraph (b) of this section; 

(2) A general enrollment period as set 

forth in paragraph (c) of this section; 

(3) A special enrollment period as set 

forth in §§ 406.24, 406.25, and 406.27 of 

this part; or 

(4) For HMO/CMP enrollees, a 

transfer enrollment period as set forth in 

paragraph (f) of this section. 

* * * * * 

(c) * * * 

(3) If the individual enrolls or 

reenrolls during a general enrollment 

period— 

(i) Before January 1, 2023, his or her 

entitlement begins on July 1 of the 

calendar year; or 

(ii) On or after January 1, 2023, his or 

her entitlement begins on the first day 

of the month after the month of 

enrollment. 

* * * * * 

■ 7. Section 406.22 is amended by— 

■ a. In paragraph (a): 

■ i. In the paragraph heading, removng 

the phrase ‘‘or over.’’ and adding in its 

place ‘‘or over before January 1, 2023.’’ 

■ ii. In the introductory text removing 

the phrase ‘‘age 65, the following rules 

apply:’’ and adding in its place the 

phrase ‘‘age 65, before January 1, 2023, 

the following rules apply:’’; 

■ b. Redesignating paragraph (b) as 

paragraph (c); 

■ c. Adding a new paragraph (b); 

■ d. Revising the paragraph heading and 

introductory text for newly redesignated 

paragraph (c); and 

■ e. Adding paragraph (d). 

The revisions and addition read as 

follows: 

§ 406.22 Effect of month of enrollment on 

entitlement. 

* * * * * 

(b) Individual age 65 or over on or 

after January 1, 2023. For an individual 

who has attained age 65 on or after 

January 1, 2023, the following rules 

apply: 

(1) If the individual enrolls during the 

first 3 months of their initial enrollment 

period, entitlement begins with the first 

month of eligibility. 

(2) If an individual enrolls during the 

last 4 months of their initial enrollment 

period, entitlement begins with the 

month following the month of 

enrollment. 

(c) Individual under age 65 before 

January 1, 2023. For an individual who 

has not attained age 65 and who 

satisfies the requirements of § 406.20(c) 

before January 1, 2023, the following 

rules apply: 

* * * * * 

(d) Individual under age 65 on or after 

January 1, 2023. For an individual who 

has not attained age 65 and who first 

satisfies the requirements of § 406.20(c) 

on or after January 1, 2023, the 

following rules apply: 

(1) For individuals who enroll during 

the first 3 months of their IEP, 

entitlement begins with the first month 

of eligibility. 

(2) If an individual enrolls during the 

month in which they first become 

eligible or any subsequent month of 

their IEP, entitlement begins with 

month following the month of 

enrollment 

■ 8. Section 406.26 is amended by— 

■ a. Adding paragraph (a)(3); and 

■ b. Revising paragraph (b)(2). 

The addition and revision read as 

follows: 

§ 406.26 Enrollment under State buy-in. 

(a) * * * 

(3) Enrollment without 

discrimination. A State that has a buyin agreement in effect must enroll in 

premium health insurance any 

applicant who meets the eligibility 

requirement for the QMB eligibility 

group, with the State paying the 

premiums on the individual’s behalf. 

(b) * * * 

(2) The first month in which the 

individual is entitled to premium 

hospital insurance under § 406.20(b) 

and has QMB status. Under a State buyin agreement, as defined in § 407.40, 

QMB-eligible individuals can enroll in 

premium hospital insurance at any time 

of the year, without regard to Medicare 

enrollment periods. 

* * * * * 

■ 8. Add § 406.27 to subpart C to reads 

as follows: 

§ 406.27 Special enrollment periods for 

exceptional conditions. 

(a) General rule. Beginning January 1, 

2023, in accordance with the Secretary’s 

authority in sections 1837(m) and 

1838(g) of the Act, the following SEPs, 

as defined under § 406.24(a)(4) of this 

subchapter, are provided for individuals 

that missed a Medicare enrollment 

period, (as specified in §§ 406.21, 

406.24, or 406.25), due to exceptional 

conditions as determined by the 

Secretary and established under 

paragraphs (b) through (f) of this 

section. SEPs are provided for 

exceptional conditions that took place 

on or after January 1, 2023 except as 

specified in paragraph (e). 

(b) Special enrollment period for 

individuals impacted by an emergency 

or disaster. An SEP exists for 

individuals prevented from submitting a 

timely Medicare enrollment request by 

an emergency or disaster declared by a 

Federal, state, or local government 

entity. 

(1) SEP parameters. An individual is 

eligible for the SEP if they reside (or 

resided) in an area for which a Federal, 

State or local government entity newly 

declared a disaster or other emergency. 

The individual must demonstrate that 

they reside (or resided) in the area 

during the period covered by that 

declaration. 

(2) SEP duration. The SEP begins on 

the earlier of the date an emergency or 

disaster is declared or, if different, the 

start date identified in such declaration. 

The SEP ends 2 months after the end 

date identified in the declaration, the 

end date of any extensions or the date 

when the declaration has been 

determined to have ended or has been 

revoked, if applicable. 

(3) Entitlement. Entitlement begins 

the first day of the month following the 

month of enrollment, so long as the date 

is on or after January 1, 2023. 

(c) Special enrollment period for 

individuals affected by a health plan or 

employer misrepresentation. An SEP 

exists for individuals whose nonenrollment in premium Part A is 

unintentional, inadvertent, or erroneous 

and results from misrepresentation or 

reliance on incorrect information 

provided by the individual’s employer 

or GHP, or any person authorized to act 

on behalf of such entity. 

(1) SEP parameters. An individual is 

eligible for the SEP if they can 

demonstrate both of the following: 

(i) He or she did not enroll in 

premium Part A during another 

enrollment period in which they were 

eligible based on information received 

from an employer or GHP, or any person 


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authorized to act on such organization’s 

behalf. 

(ii) An employer, GHP or their 

representative materially 

misrepresented information or provided 

incorrect information relating to 

enrollment in premium Part A. 

(2) SEP duration. This SEP begins the 

day the individual notifies SSA of the 

employer or GHP misrepresentation and 

ends 2 months later. 

(3) Entitlement. Entitlement begins 

the first day of the month following the 

month of enrollment, so long as the date 

is on or after January 1, 2023. 

(d) SEP for formerly incarcerated 

individuals. An SEP exists for Medicare 

eligible individuals who are released 

from incarceration (as described in 

§ 411.4(b)) on or after January 1, 2023. 

(1) SEP parameters. An individual is 

eligible for this SEP if they demonstrate 

that they are eligible for Medicare and 

failed to enroll or reenroll in Medicare 

premium Part A due to their 

incarceration and there is a record of 

release either through discharge 

documents or data available to SSA. 

(2) SEP duration. The SEP starts the 

day of the individual’s release from 

incarceration and ends the last day of 

the sixth month after the month in 

which the individual is released from 

incarceration. 

(3) Entitlement. Entitlement begins 

the first day of the month following the 

month of enrollment, so long as the date 

is on or after January 1, 2023. 

(e) Special enrollment period for 

termination of Medicaid coverage. An 

SEP exists for individuals whose 

Medicaid eligibility is terminated. 

(1) SEP parameters. An individual is 

eligible for this SEP if they can 

demonstrate that— 

(i) They are eligible for premium Part 

A under § 406.5(b); and 

(ii) Their Medicaid eligibility is 

terminated on or after January 1, 2023, 

or is terminated after the last day of the 

Coronavirus Disease 2019 public health 

emergency (COVID–19 PHE) as 

determined by the Secretary, whichever 

is earlier. 

(2) SEP duration. If the termination of 

Medicaid eligibility occurs— 

(i) After the last day of the COVID–19 

PHE and before January 1, 2023, the SEP 

starts on January 1, 2023 and ends on 

June 30, 2023. 

(ii) On or after January 1, 2023, the 

SEP starts when the individual is 

notified of termination of Medicaid 

eligibility and ends 6 months after the 

termination of eligibility. 

(3) Entitlement. (i) General rule. 

Entitlement begins the first day of the 

month following the month of 

enrollment, so long as the date is after 

the last day of the COVID–19 PHE or on 

after January 1, 2023, whichever is 

earlier. 

(ii) Special rule. An individual whose 

Medicaid eligibility is terminated after 

the end of the COVID–19 PHE, but 

before January 1, 2023 (if applicable), 

has the option of requesting that 

entitlement begin back to the first of the 

month following termination of 

Medicaid eligibility provided the 

individual pays the monthly premiums 

for the period of coverage (as required 

under § 406.31). 

(4) Effect on previously accrued late 

enrollment penalties. Individuals who 

otherwise would be eligible for this SEP, 

but enrolled during the COVID–19 PHE 

prior to January 1, 2023, are eligible to 

have late enrollment penalties collected 

under § 406.32(d) reimbursed and 

ongoing penalties removed. 

(f) Special enrollment period for other 

exceptional conditions. An SEP exists 

for other exceptional conditions as CMS 

may provide. 

(1) SEP parameters. An individual is 

eligible for the SEP if both of the 

following apply: 

(i) The individual demonstrates that 

they missed an enrollment period in 

which they were eligible because of an 

event or circumstance outside of the 

individual’s control which prevented 

them from enrolling in premium Part A. 

(ii) It is determined that the 

conditions were exceptional in nature. 

(2) SEP duration. The SEP duration is 

determined on a case-by-case basis. 

(3) Entitlement. Entitlement begins 

the first day of the month following the 

month of enrollment, so long as the date 

is on or after January 1, 2023. 

■ 10. Section 406.33 is amended by— 

■ a. Revising the introductory text for 

paragraph (a); and 

■ b. Redesignating paragraph (c) as 

paragraph (d) and adding new 

paragraph (c). 

The revision and addition read as 

follows: 

§ 406.33 Determination of months to be 

counted for premium increase: Enrollment. 

(a) Enrollment before April 1, 1981 or 

after September 30, 1981 and before 

January 1, 2023. The months to be 

counted for premium increase are the 

months from the end of the initial 

enrollment period through the end of 

the general enrollment period, the 

special enrollment period, or the 

transfer enrollment period in which the 

individual enrolls, excluding the 

following: 

* * * * * 

(c) Enrollment on or after January 1, 

2023. The months to be counted for 

premium increase are the months from 

the end of the initial enrollment period 

through the end of the month in which 

the individual enrolls, excluding both of 

the following: 

(1) The months described in 

paragraphs (a)(1) through (a)(6) of this 

section. 

(2) Any months of non-coverage in 

accordance with an individual’s use of 

an exceptional conditions SEP under 

§ 406.27 provided the individual enrolls 

within the duration of the SEP. 

* * * * * 

■ 11. Section 406.34 is amended by— 

■ a. Revising the introductory text for 

paragraph (a); and 

■ b. Redesignating paragraph (e) as 

paragraph (f) and adding new paragraph 

(e). 

The revision and addition read as 

follows: 

§ 406.34 Determination of months to be 

counted for premium increase: 

Reenrollment. 

(a) First reenrollment before April 1, 

1981 or after September 30, 1981 and 

before January 1, 2023. The months to 

be counted for premium increase are: 

* * * * * 

(e) Reenrollments on or after January 

1, 2023. (1) The months to be counted 

for premium increase are as follows: 

(i) The months specified in 

§ 406.33(c). 

(ii) The months specified in 

paragraphs (b) and (d) of this section (if 

applicable). 

(iii) The months from the end of the 

first period of entitlement through the 

end of the month during the general 

enrollment period in which the 

individual reenrolled. 

(2) The months excluded from 

premium increase are the months of 

non-coverage in accordance with an 

individual’s use of an exceptional 

conditions SEP under § 406.27, 

provided the individual enrolls within 

the duration of the SEP. 

* * * * * 

PART 407—SUPPLEMENTARY 

MEDICAL INSURANCE (SMI) 

ENROLLMENT AND ENTITLEMENT 

■ 12. The authority citation for part 407 

is revised to read as follows: 

Authority: 42 U.S.C. 1302, 1395p, 1395q, 

and 1395hh. 

■ 13. Section 407.1 is amended by 

adding paragraph (a)(6) and revising 

paragraph (b) to read as follows: 

§ 407.1 Basis and scope. 

(a) * * * 

(6) Sections 1836(b) and 1837(n) of 

the Act provide for coverage of 

immunosuppressive drugs as described 


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in section 1861(s)(2)(J) of the Act under 

Part B beginning on or after January 1, 

2023, for eligible individuals whose 

benefits under Medicare Part A and 

eligibility to enroll in Part B on the basis 

of ESRD would otherwise end with the 

36th month after the month in which 

the individual receives a kidney 

transplant by reason of section 

226A(b)(2) of the Act. 

(b) Scope. This part sets forth the 

eligibility, enrollment, and entitlement 

requirements and procedures for the 

following: 

(1) Supplementary medical insurance. 

(The rules about premiums are in part 

408 of this chapter.) 

(2) The immunosuppressive drug 

benefit provided for under sections 

1836(b) and 1837(n) of the Act, 

hereinafter referred to as the Part BImmunosuppressive Drug Benefit (Part 

B–ID). 

■ 14. Section 407.11 is revised to read 

as follows: 

§ 407.11 Forms used to apply for 

enrollment under Medicare Part B. 

Forms used to apply for enrollment 

under the supplementary medical 

insurance program are available free of 

charge by mail from CMS, or at any 

Social Security branch or district office 

and online at the CMS and SSA 

websites. As an alternative, the 

individual may request enrollment by 

signing a simple statement of request, if 

he or she is eligible to enroll at that 

time. 

■ 15. Adding § 407.23 to read as 

follows: 

§ 407.23 Special enrollment periods for 

exceptional conditions. 

(a) General rule: Beginning January 1, 

2023, in accordance with the Secretary’s 

authority in sections 1837(m) and 

1838(g) of the Act, the following SEPs, 

as defined under § 406.24(a)(4) of this 

subchapter, are provided for individuals 

who missed a Medicare enrollment 

period (as specified in § 407.21, 407.15 

or 407.20) due to exceptional conditions 

as determined by the Secretary and 

established under paragraphs (b) 

through (f) of this section. SEPs are 

provided for exceptional conditions that 

took place on or after January 1, 2023 

except as specified in paragraph (e) of 

this section. 

(b) Special enrollment period for 

individuals impacted by an emergency 

or disaster. An SEP exists for 

individuals prevented from submitting a 

timely Medicare enrollment request by 

an emergency or disaster declared by a 

Federal, State or local government 

entity. 

(1) SEP parameters. An individual is 

eligible for the SEP if they reside (or 

resided) in an area for which a Federal, 

State or local government entity newly 

declared a disaster or other emergency. 

The individual must demonstrate that 

they reside (or resided) in the area 

during the period covered by that 

declaration. 

(2) SEP duration. The SEP begins on 

the earlier of the date an emergency or 

disaster is declared or, if different, the 

start date identified in such declaration. 

The SEP ends 2 months after the end 

date identified in the declaration, the 

end date of any extensions or the date 

when the declaration has been 

determined to have ended or has been 

revoked, if applicable. 

(3) Entitlement. Entitlement begins 

the first day of the month following the 

month of enrollment, so long as the date 

is on or after January 1, 2023. 

(c) Special enrollment period for 

individuals affected by a health plan or 

employer misrepresentation. An SEP 

exists for individuals whose nonenrollment in SMI is unintentional, 

inadvertent, or erroneous and results 

from misrepresentation or reliance on 

incorrect information provided by the 

individual’s employer or GHP, or any 

person authorized to act on behalf of 

such entity. 

(1) SEP parameters. An individual is 

eligible for the SEP if they can 

demonstrate the both of the following: 

(i) He or she did not enroll in SMI 

during another enrollment period in 

which they were eligible based on 

information received from an employer 

or GHP, or any person authorized to act 

on such organization’s behalf. 

(ii) An employer, GHP or their 

representative materially 

misrepresented information or provided 

incorrect information relating to 

enrollment in SMI. 

(2) SEP duration. This SEP begins the 

day the individual notifies SSA of the 

employer or GHP misrepresentation, or 

the incorrect information provided and 

ends 2 months later. 

(3) Entitlement. Entitlement begins 

the first day of the month following the 

month of enrollment, so long as the date 

is on or after January 1, 2023. 

(d) SEP for formerly incarcerated 

individuals. An SEP exists for Medicare 

eligible individuals who are released 

from incarceration (as described in 

§ 411.4(b)), on or after January 1, 2023. 

(1) SEP parameters. An individual is 

eligible for this SEP if they demonstrate 

that they are eligible for Medicare and 

failed to enroll or reenroll in SMI due 

to their incarceration, and there is a 

record of release either through 

discharge documents or data available 

to SSA. 

(2) SEP duration. The SEP starts the 

day of the individual’s release from 

incarceration and ends the last day of 

the sixth month after the month in 

which the individual is released from 

incarceration. 

(3) Entitlement. Entitlement begins 

the first day of the month following the 

month of enrollment. so long as the date 

is on or after January 1, 2023. 

(e) Special enrollment period for 

termination of Medicaid coverage. An 

SEP exists for individuals whose 

Medicaid eligibility is terminated. 

(1) SEP parameters. An individual is 

eligible for this SEP if they can 

demonstrate that— 

(i) They are eligible for Part B under 

§ 407.4(a); and 

(ii) Their Medicaid eligibility is being 

terminated after January 1, 2023, or after 

the last day of the Coronavirus Disease 

2019 public health emergency (COVID– 

19 PHE) as determined by the Secretary, 

whichever is earlier. 

(2) SEP duration. If the termination of 

Medicaid eligibility occurs— 

(i) After the last day of the COVID–19 

PHE and before January 1, 2023, the SEP 

starts on January 1, 2023 and ends on 

June 30, 2023. 

(ii) On or after January 1, 2023, the 

SEP starts when the individual is 

notified of termination of Medicaid 

eligibility and ends 6 months after the 

termination of eligibility. 

(3) Entitlement. (i) General rule. 

Entitlement begins the first day of the 

month following the month of 

enrollment, so long as the date is the 

month following the last month of the 

COVID–19 PHE or on or after January 1, 

2023, whichever is earlier. 

(ii) Special rule. An individual whose 

Medicaid eligibility is terminated after 

the end of the COVID–19 PHE, but 

before January 1, 2023 (if applicable), 

has the option of requesting that 

entitlement begin back to the first of the 

month following termination of 

Medicaid eligibility provided the 

individual pays the monthly premiums 

for the period of coverage (as required 

under part 408 of this subchapter). 

(4) Effect on previously accrued late 

enrollment penalties. Individuals who 

otherwise would be eligible for this SEP, 

but enrolled during the COVID–19 PHE 

prior to January 1, 2023, are eligible to 

have late enrollment penalties collected 

under § 408.22 of this subchapter 

reimbursed ongoing penalties removed. 

(f) Special enrollment period for other 

exceptional conditions. An SEP exists 

for other exceptional conditions as CMS 

may provide. 

(1) SEP parameters. An individual is 

eligible for the SEP if both of the 

following apply: 


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(i) The individual demonstrates that 

they missed an enrollment period in 

which they were eligible because of an 

event or circumstance outside of the 

individual’s control which prevented 

them from enrolling in SMI. 

(ii) It is determined that the 

conditions were exceptional in nature. 

(2) SEP duration. The SEP duration is 

determined on a case by case basis. 

(3) Entitlement. Entitlement begins 

the first day of the month following the 

month of enrollment, so long as the date 

is on or after January 1, 2023. 

■ 16. Section 407.25 is amended by 

revising paragraphs (a), (b)(1) and (3) to 

read as follows: 

§ 407.25 Beginning of entitlement: 

Individual enrollment. 

The following apply whether an 

individual is self-enrolled or 

automatically enrolled in SMI: 

(a) Enrollment during initial 

enrollment period. For individuals who 

first meet the eligibility requirements of 

§ 407.10 in a month beginning— 

(1) Before January 1, 2023, the 

following entitlement dates apply: 

(i) If an individual enrolls during the 

first 3 months of the initial enrollment 

period, entitlement begins with the first 

month of eligibility. 

(ii) If an individual enrolls during the 

fourth month of the initial enrollment 

period, entitlement begins with the 

following month. 

(iii) If an individual enrolls during the 

fifth month of the initial enrollment 

period, entitlement begins with the 

second month after the month of 

enrollment. 

(iv) If an individual enrolls in either 

of the last 2 months of the initial 

enrollment period, entitlement begins 

with the third month after the month of 

enrollment. 

(v) Example. An individual first meets 

the eligibility requirements for 

enrollment in April. The individual’s 

initial enrollment period is January 

through July. The month in which the 

individual enrolls determines the month 

that begins the period of entitlement, as 

follows: 

TABLE 1 TO PARAGRAPH (a)(1)(v) 

Enrolls in initial 

enrollment period Entitlement begins on— 

January ............. April 1 (month eligibility requirements first met). 

February ............ April 1. 

March ................ April 1. 

April ................... May 1 (month following month of 

enrollment). 

May ................... July 1 (second month after month 

of enrollment). 

June .................. September 1 (third month after 

month of enrollment). 

TABLE 1 TO PARAGRAPH (a)(1)(v)— 

Continued 

Enrolls in initial 

enrollment period Entitlement begins on— 

July .................... October 1 (third month after 

month of enrollment). 

(2) On or after January 1, 2023, the 

following entitlement dates apply: 

(i) If an individual enrolls during the 

first 3 months of the initial enrollment 

period, entitlement begins with the first 

month of eligibility. 

(ii) If an individual enrolls during the 

last 4 months of the initial enrollment 

period, entitlement begins with the 

month following the month in which 

they enroll. 

(b) Enrollment or reenrollment during 

general enrollment period. (1) If an 

individual enrolls or reenrolls during a 

general enrollment period before April 

1, 1981, or after September 30, 1981 and 

before January 1, 2023, entitlement 

begins on July 1 of that calendar year. 

* * * * * 

(3) If an individual enrolls or reenrolls 

during a general enrollment period on 

or after January 1, 2023, entitlement 

begins on the first day of the month 

following the month in which they 

enroll. 

* * * * * 

■ 17. Section 407.40 is amended by— 

■ a. Adding paragraphs (a)(6) through 

(10); 

■ b. In paragraph (b): 

■ (i). Revising the introductory text; 

■ (ii) Arranging the definitions in 

alphabetical order; 

■ (iii) Adding the definitions of ‘‘1634 

State’’ in alphabetical order; 

■ (iv) Revising the definition of 

‘‘AFDC’’; 

■ (v) Adding the definition of ‘‘Buy-in 

group’’ in alphabetical order; 

■ (vi) Removing the definition of 

‘‘Qualified Medicare Beneficiary’’; 

■ (vii) Revising the definition of ‘‘State 

buy-in agreement or buy-in agreement’’; 

■ c. Revising paragraph (c)(1); and 

■ d. Adding paragraph (c)(5) and (6). 

The additions and revisions read as 

follows: 

§ 407.40 Enrollment under a State buy-in 

agreement. 

(a) * * * 

(6) Section 4501 of the Omnibus 

Budget Reconciliation Act of 1990 (Pub. 

L. 101–508) established the Specified 

Low-Income Medicare Beneficiary 

(SLMB) eligibility group effective 

January 1993. 

(7) Section 4732 of the Balanced 

Budget Act of 1997 (Pub. L. 105–33) 

established the Qualifying Individual or 

QI eligibility group effective January 

1998. 

(8) Section 112 of the Medicare 

Improvements for Patients and 

Providers Act of 2008 (Pub. L. 110–275) 

increased the resource standard for 

QMB, SLMB, and QI to the same level 

as the full Part D LIS resource standard 

effective January 1, 2010. 

(9) Title II, section 211, of the 

Medicare Access and CHIP 

Reauthorization Act (Pub. L. 114–10), 

effective April 16, 2015, permanently 

extended the QI eligibility group. 

(10) Title II, section 402 of the 

Consolidated Appropriations Act of 

(Pub. L. 116–260), effective January 1, 

2023, expands QMB, SLMB, and QI to 

cover individuals who are enrolled in 

Medicare Part B for coverage of 

immunosuppressive drugs. 

(b) Definitions. As used in this 

subpart C, unless the context indicates 

otherwise— 

1634 State means a State that has an 

agreement with SSA, in accordance 

with section 1634 of the Act, for SSA to 

determine Medicaid eligibility on behalf 

of the State for individuals residing in 

the State whom the SSA has determined 

eligible for SSI. 

* * * * * 

AFDC stands for aid to families with 

dependent children under Part A of title 

IV of the Act, as it was in effect on July 

16, 1996. 

* * * * * 

Buy-in group means a coverage group 

described in section 1843 of the Act that 

is identified by the State and is 

composed of multiple Medicaid 

eligibility groups specified in the buy-in 

agreement. 

* * * * * 

State buy-in agreement or buy-in 

agreement means an agreement 

authorized or modified by sections 1843 

or 1818(g) of the Act, under which a 

State secures Part B or premium Part A 

coverage for individuals who are 

members of the buy-in group specified 

in the agreement, by enrolling them and 

paying the premiums on their behalf. A 

State’s submission of a State plan 

amendment addressing its buy-in 

process, if approved by CMS, 

constitutes the ‘‘buy-in agreement’’ 

between the State and CMS for purposes 

of sections 1843 and 1818(g) of the Act. 

(c) * * * 

(1) A State that has a buy-in 

agreement in effect must enroll any 

individual who is eligible to enroll in 

SMI under § 407.10 and who is a 

member of the buy-in group, with the 

State paying the premiums on the 

individual’s behalf. Individuals enrolled 

in the buy-in group can enroll in Part B 


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at any time of the year, without regard 

to Medicare enrollment periods. 

* * * * * 

(5) In a 1634 State, CMS enrolls SSI 

beneficiaries in Medicare Part B, on 

behalf of the State, with the State paying 

the beneficiary’s Part B premiums. 

(6) Premiums paid under a State buyin agreement are not subject to increase 

because of late enrollment or 

reenrollment. 

■ 18. Section 407.42 is revised to read 

as follows: 

§ 407.42 Buy-in groups available to the 50 

States, the District of Columbia, and the 

Northern Mariana Islands. 

(a) Basic rule. The 50 States, the 

District of Columbia, and the Northern 

Mariana Islands must select one of the 

buy-in groups described in paragraph 

(b) in their buy-in agreements. 

(b) Buy-in groups available. (1) Group 

1: Cash Assistance and Deemed 

Recipients of Cash Assistance: This buyin group includes all of the following: 

(i) Individuals who receive SSI or SSP 

or both and are covered under the 

State’s Medicaid state plan as 

categorically needy. 

(ii) Individuals who under the Act or 

any other provision of Federal Law are 

treated, for Medicaid eligibility 

purposes, as though the individual was 

receiving SSI or SSP and are covered 

under the State’s Medicaid state plan as 

categorically needy. 

(iii) At State option, individuals 

whom the State must consider to be 

recipients of AFDC, including those 

who receive adoption assistance, foster 

care or guardianship care under part E 

of title IV of the Act, in accordance with 

§ 435.145, or who receive Medicaid 

coverage for low income families, in 

accordance with section 1931(b) of the 

Act. 

(2) Group 2: Cash Assistance and 

Deemed Recipients of Cash Assistance 

and three Medicare Savings Program 

eligibility groups. This buy-in group 

includes both of the following: 

(i) Group 1. 

(ii) Individuals enrolled in the— 

(A) Qualified Medicare Beneficiary 

eligibility group described in § 435.123; 

(B) Specified Low-Income Beneficiary 

eligibility group described in § 435.124; 

and 

(C) Qualifying Individual eligibility 

group described in § 435.125. 

(3) Group 3: All Medicaid Eligibility 

Groups: This buy-in group includes all 

individuals eligible for Medicaid. 

§ 407.45 [Removed] 

■ 19. Section 407.45 is removed. 

■ 20. Section 407.47 is amended by— 

■ a. Revising paragraph (a)(2); and 

■ b. Adding paragraphs (f) and (g). 

The revisions and additions read as 

follows: 

§ 407.47 Beginning of coverage under a 

State buy-in agreement. 

(a) * * * 

(2) The effective date of the buy-in 

agreement or agreement modification 

that covers the buy-in group to which 

the individual belongs, and which may 

not be earlier than the third month after 

the month in which the agreement or 

modification is executed. The State 

must apply the earliest applicable start 

date for the applicable buy-in group. 

* * * * * 

(f) Limitations on retroactive 

adjustments in the case of retroactive 

Medicare Part A entitlement. (1) In cases 

in which a Medicaid beneficiary is 

retroactively entitled to Medicare Part 

A, State liability for retroactive 

Medicare Part B premiums for Medicaid 

beneficiaries under a buy-in agreement 

is limited to a period of no greater than 

36 months prior to the date of the 

Medicare eligibility determination. 

(2) The Secretary may grant good 

cause exceptions for periods of greater 

or less than 36 months if application of 

paragraph (f)(1) would result in harm to 

a beneficiary or if the State cannot 

benefit from Medicare and further 

limiting State liability would not result 

in harm to the beneficiary. 

(g) Part B enrollment under a buy-in 

agreement. Individuals in a buy-in 

group can enroll in Part B at any time 

of the year, without regard to Medicare 

enrollment periods. 

■ 21. Section 407.48 is amended by— 

■ a. Revising paragraphs (c)(1) and (2); 

and 

■ b. Adding paragraph (e). 

The revisions and addition read as 

follows: 

§ 407.48 Termination of coverage under a 

State buy-in agreement. 

* * * * * 

(c) * * * 

(1) On the last day of the last month 

for which he or she is eligible for 

inclusion in the buy-in group, if CMS 

determines ineligibility or receives a 

State ineligibility notice by a processing 

cut-off date as described in paragraph 

(e) of this section, by the second month 

after the month in which the individual 

becomes ineligible for inclusion in the 

buy-in group. 

(2) On the last day of the second 

month before the month in which CMS 

receives a State ineligibility notice later 

than the time specified in paragraph 

(c)(1) of this section. If CMS receives a 

notice after the processing cut-off date 

conveyed under paragraph (e) of this 

section, CMS considers it to have been 

received the following month. 

* * * * * 

(e) Processing cut-off dates for each 

calendar month. On a quarterly basis, 

CMS is to prospectively convey to States 

a schedule of processing cut-off dates 

for each calendar month. 

■ 22. Add subpart D to read as follows: 

Subpart D—Part B Immunosuppressive 

Drug Benefit 

Sec. 

407.55 Eligibility to enroll. 

407.57 Part B–ID benefit enrollment. 

407.59 Attestation. 

407.62 Termination of coverage. 

Subpart D—Part B 

Immunosuppressive Drug Benefit 

§ 407.55 Eligibility to enroll. 

(a) Basic rule. Except as specified in 

paragraph (b) of this section, an 

individual is eligible to enroll, be 

deemed enrolled, or reenroll in the Part 

B–ID benefit if their Part A entitlement 

ends as described in § 406.13(f)(2) of 

this chapter. 

(b) Exception. An individual is not 

eligible for the Part B–ID benefit if the 

individual is enrolled in or for any of 

the following: 

(1) A group health plan or group or 

individual health insurance coverage, as 

such terms are defined in section 2791 

of the Public Health Service Act. 

(2) Coverage under the TRICARE for 

Life program under section 1086(d) of 

title 10, United States Code. 

(3) A State plan (or waiver of such 

plan) under title XIX and is eligible to 

receive benefits for immunosuppressive 

drugs described in section 1836(b) of the 

Act under such plan (or such waiver). 

(4) A State child health plan (or 

waiver of such plan) under title XXI and 

is eligible to receive benefits for such 

drugs under such plan (or such waiver). 

(5) The patient enrollment system of 

the Department of Veterans Affairs 

established and operated under section 

1705 of title 38, United States Code and 

is either of the following: 

(i) Not required to enroll under 

section 1705 of title 38 to receive 

immunosuppressive drugs described in 

section 1836(b) of the Act. 

(ii) Otherwise eligible under a 

provision of title 38, United States Code, 

other than section 1710 of such title, to 

receive immunosuppressive drugs 

described in section 1836(b) of the Act. 

(c) Appeals. Denials for enrollment in 

the Part B–ID benefit will be considered 

an initial determination that is 

appealable under § 405.904(a)(1). 

§ 407.57 Part B–ID benefit enrollment. 

(a) Deemed enrollment. An individual 

whose Part A entitlement ends in 


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accordance with § 406.13(f)(2) of this 

chapter on or after January 1, 2023, is 

deemed to have enrolled into the Part 

B–ID benefit effective the first day of the 

month in which the individual first 

satisfies § 407.55, provided he or she 

provides the attestation required under 

§ 407.59 prior to the termination of their 

Part A benefits. 

(b) Individual enrollment. An 

individual whose Part A entitlement 

ends in accordance with § 406.13(f)(2) of 

this chapter, and who meets the 

requirements of § 407.55 and provides 

the attestation required under § 407.59, 

may enroll in the Part B–ID benefit 

under the following conditions: 

(1) If the individual’s entitlement 

ends prior to January 1, 2023, he or she 

may enroll in the Part B–ID benefit 

beginning on October 1, 2022. 

(2) If individual’s entitlement ends on 

or after January 1, 2023, the individual 

may enroll at any time after their 

entitlement ends. 

(c) Reenrollment. An individual who 

had previously enrolled in the Part B– 

ID benefit, but terminated that benefit, 

can reenroll at any time, provided the 

individual meets the requirements of 

§ 407.55 and provides the attestation 

required under § 407.59. 

(d) Attestation. To enroll in the Part 

B–ID benefit, an individual must submit 

the required attestation as described in 

§ 407.59. 

(e) Entitlement date. The entitlement 

to the Part B–ID benefit will start as 

follows: 

(1) For enrollments provided under 

paragraph (a) of this section, entitlement 

is effective the month Part A benefits are 

terminated. 

(2) For enrollments provided under 

paragraphs (b) and (c) of this section, 

the Part B–ID benefit is effective the 

month following the month in which 

the individual provides the attestation 

required in § 407.59. 

(3) Exception. Enrollments submitted 

October 1, 2022 through December 31, 

2022, are effective January 1, 2023. 

§ 407.59 Attestation. 

As a condition of enrollment, an 

individual must attest to SSA in either 

a verbal attestation or signed paper form 

provided by SSA, that— 

(a) The individual is not enrolled and 

does not expect to enroll in other 

coverage described in § 407.55(b); and 

(b) If the individual does enroll in 

other coverage described in § 407.55(b), 

the individual will notify SSA within 60 

days of enrollment in such other 

coverage. 

§ 407.62 Termination of coverage. 

(a) Other coverage. An individual who 

enrolls in other coverage as described in 

§ 407.55(b) will have his or her 

enrollment in the Part B–ID benefit 

terminated on either of the following 

bases: 

(1) If the individual notifies SSA of 

such coverage consistent with 

§ 407.59(b), their enrollment in the Part 

B–ID benefit will be terminated effective 

the first day of the month after the 

month of notification unless the 

individual requests a different, 

prospective termination date that is not 

after the effective date of enrollment in 

other health insurance coverage, as 

described in § 407.55(b). 

(2) If the individual does not notify 

SSA of this coverage consistent with 

§ 407.59(b), their enrollment in the Part 

B–ID benefit will be terminated effective 

the first day of the month after the 

month in which there is a determination 

of the individual’s enrollment in 

coverage described in § 407.55(b). 

(b) Death. Enrollment in the Part B– 

ID benefit ends on the last day of the 

month in which the individual dies. 

(c) Nonpayment of premiums. If an 

individual fails to pay the premiums, 

the Part B–ID benefit enrollment will 

end as provided in the rules for Part B 

premiums set forth in part 408 of this 

chapter. 

(d) Request by individual. An 

individual may request disenrollment at 

any time by notifying SSA that he or she 

no longer wants to be enrolled in the 

Part B–ID benefit. Such individual’s 

enrollment in the Part B–ID benefit ends 

with the last day of the month in which 

the individual provides the 

disenrollment request, except for an 

individual who loses coverage under a 

State buy-in agreement, as described in 

§ 407.50(b)(2)(i). 

(e) Entitlement to Hospital Insurance 

benefits. Enrollment in the Part B–ID 

benefit ends effective the last day of the 

month prior to the month that the 

individual becomes entitled to benefits 

under §§ 406.5, 406.12 or 406.13 of this 

chapter. 

(f) Appeals. An involuntary 

termination of the Part B–ID benefit for 

reasons described at paragraphs (a)(2), 

(b) or (c) of this section, will be 

considered an initial determination that 

is appealable under § 405.904(a)(1) of 

this chapter. An individual can request 

to continue receiving Part B–ID benefits 

while waiting for an appeals decision. 

PART 408—PREMIUMS FOR 

SUPPLEMENTARY MEDICAL 

INSURANCE 

■ 23. The authority citation for part 408 

is revised to read as follows: 

Authority: 42 U.S.C. 1302 and 1395hh. 

■ 24. Section 408.20 is amended by 

adding paragraph (f) to read as follows: 

§ 408.20 Monthly premiums. 

* * * * * 

(f) Part B–ID premiums—(1) Premium 

amount. Beginning in 2022, and every 

year thereafter, the Secretary, as 

mandated by section 1839(j) of the Act, 

will determine and promulgate a 

monthly premium rate in September for 

the succeeding calendar year for 

individuals enrolled only in the Part B– 

ID benefit. Such premium is equal to 15 

percent of the monthly actuarial rate for 

enrollees age 65 and over for that 

succeeding calendar year. 

(2) Premium adjustments. (i) The Part 

B–ID benefit premium is subject to 

adjustments specified in §§ 408.20(e) 

(Nonstandard premiums for certain 

cases), 408.27 (Rounding the monthly 

premium), and 408.28 (Increased 

premiums due to the income-related 

monthly adjustment amount (IRMAA)). 

(ii) The Part B–ID benefit premium is 

not subject to § 408.22 (Increased 

premiums for late enrollment and for 

reenrollment). 

(3) Premium collection. Premiums for 

the Part B–ID benefit are collected as set 

out in § 408.6 and subpart C of this part. 

(4) Premium deductions. Part B–ID 

premiums are to be deducted following 

the rules set forth in § 408.40. 

■ 25. Section 408.24 is amended by— 

■ a. Revising paragraph (a) introductory 

text; 

■ b. Redesignating paragraph (b) as 

paragraph (c) and adding new paragraph 

(b); 

■ c. Revising newly redesignated 

paragraph (c) introductory text; and 

■ d. Adding paragraph (d). 

The revisions and additions read as 

follows: 

§ 408.24 Individuals who enrolled or 

reenrolled before April 1, 1981 or after 

September 30, 1981. 

(a) Enrollment. For an individual who 

first enrolled before April 1, 1981 or 

after September 30, 1981 and before 

January 1, 2023, the period includes the 

number of months elapsed between the 

close of the individual’s initial 

enrollment period and the close of the 

enrollment period in which he or she 

first enrolled, and excludes the 

following: 

* * * * * 

(b) Enrollment on or after January 1, 

2023. For an individual who first 

enrolled on or after January 1, 2023, the 

period includes the number of months 

elapsed between the close of the 

individual’s initial enrollment period 

and the close of the month in which he 

or she first enrolled and excludes— 


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(1) The periods of time described in 

(a)(1) through (a)(10) of this section; and 

(2) Any months of non-coverage in 

accordance with an individual’s use of 

an exceptional conditions SEP under 

§ 407.23 of this chapter provided the 

individual enrolls within the duration 

of the SEP. 

(c) Reenrollment. For an individual 

who reenrolled before April 1, 1981 or 

after September 30, 1981 and before 

January 1, 2023, the period— 

* * * * * 

(d) Reenrollment on or after January 

1, 2023. For an individual who 

reenrolled on or after January 1, 2023, 

the period— 

(1) Includes the number of months 

specified in paragraphs (c)(1)(i) through 

(c)(1)(iii) of this section; and 

(2) Excludes— 

(i) The number of months specified in 

paragraphs (c)(2)(i) and (c)(2)(ii) of this 

section; and 

(ii) Any months of non-coverage in 

accordance with an individual’s use of 

an exceptional conditions SEP under 

§ 407.23 of this chapter provided the 

individual enrolls within the duration 

of the SEP. 

PART 410—SUPPLEMENTARY 

MEDICAL INSURANCE (SMI) 

BENEFITS 

■ 26. The authority citation for part 410 

continues to read as follows: 

Authority: 42 U.S.C. 1302, 1395m, 

1395hh, 1395rr, and 1395ddd. 

■ 27. Section 410.30 is amended by 

revising paragraph (b) to read as follows: 

§ 410.30 Prescription drugs used in 

immunosuppressive therapy. 

* * * * * 

(b) Eligibility. For drugs furnished on 

or after December 21, 2000, coverage is 

available only for prescription drugs 

used in immunosuppressive therapy, 

furnished to an individual who received 

an organ or tissue transplant for which 

Medicare payment is made, provided 

the individual is eligible to receive 

Medicare Part B benefits, including, 

beginning January 1, 2023, an 

individual who meets the requirements 

specified in § 407.55 of this chapter. 

* * * * * 

PART 423—VOLUNTARY MEDICARE 

PRESCRIPTION DRUG BENEFIT 

■ 28. 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. 

■ 29. Section 423.30 is amended by 

revising paragraph (a)(1)(i) to read as 

follows: 

§ 423.30 Eligibility and enrollment. 

(a) * * * 

(1) * * * 

(i) Is entitled to Medicare benefits 

under Part A or enrolled in Medicare 

Part B (but not including an individual 

enrolled solely for coverage of 

immunosuppressive drugs under 

§ 407.1(a)(6)). 

* * * * * 

PART 431—STATE ORGANIZATION 

AND GENERAL ADMINISTRATION 

■ 30. The authority citation for part 431 

is revised to read as follows: 

Authority: 42 U.S.C. 1302. 

■ 31. Section 431.625 is amended— 

■ a. In (d)(1) by removing the reference 

‘‘title I, IV–A., X’’ and adding is its place 

the reference ‘‘title I, X’’; 

■ b. By removing paragraphs (d)(2)(i), 

(vi), and (x); 

■ c. By redesignating paragraphs 

(d)(2)(ii), (iii), (iv), and (v) as paragraphs 

(d)(2)(i), (ii), (iii), and (iv), respectively, 

and redesignating paragraphs (d)(2)(vii), 

(viii), and (ix) as paragraphs (d)(2)(v), 

(vi), and (vii), respectively; 

■ d. In newly redesignated paragraph 

(d)(2)(i) by removing the reference 

‘‘435.114,’’; 

■ e. By revising newly redesignated 

paragraph (d)(2)(iii); 

■ f. In newly redesignated paragraph 

(d)(2)(iv) by removing ‘‘chapter’’ and 

adding in its place ‘‘subchapter’’; 

■ g. By revising newly redesignated 

paragraphs (d)(2)(vi) and (vii); 

■ h. By adding new paragraphs 

(d)(2)(viii) and (ix); and 

■ i. In paragraph (d)(3) by removing the 

reference ‘‘435.914’’ and adding in its 

place the reference ‘‘435.915’’. 

The additions read as follows: 

§ 431.625 Coordination of Medicaid with 

Medicare Part B. 

* * * * * 

(d) * * * 

(2) * * * 

(iii) Beneficiaries whom States must 

consider to be recipients of AFDC, 

including those who receive adoption 

assistance, foster care or guardianship 

care, under part E of title IV of the Act, 

in accordance with § 435.145 of this 

subchapter, or who receive Medicaid 

coverage for low income families, in 

accordance with section 1931(b) of the 

Act. 

* * * * * 

(vi) Disabled children living at home 

to whom the State provides Medicaid 

under § 435.225 of this subchapter. 

(vii) Beneficiaries required to be 

covered under §§ 435.115 and 436.114(f) 

and (h) of this subchapter, that is, those 

who remain eligible for 4 months of 

temporary Medicaid coverage because of 

the increased collection of spousal 

support under part D of title IV of the 

Act. 

(viii) Individuals required to be 

covered under the QMB, SLMB, and QI 

eligibility groups, each separately 

defined in §§ 435.123 through 435.125 

of this subchapter. 

(ix) Adult children with disabilities, 

as described in 1634(c) of the Act. 

* * * * * 

PART 435—MANDATORY COVERAGE 

OF THE AGED, BLIND AND DISABLED 

■ 32. The authority citation for part 435 

is revised to read as follows: 

Authority: 42 U.S.C. 1302. 

■ 33. Amend § 435.4 by adding, in 

alphabetical order, the definition ‘‘of 

Medicare Savings Programs’’ as follows: 

§ 435.4 Definitions and use of terms. 

* * * * * 

Medicare Savings Programs means 

four Medicaid eligibility groups 

authorized under section 1902(a)(10)(E) 

and 1905(p) and (s) of the Act that serve 

certain low-income Medicare 

beneficiaries. These groups include the 

Qualified Medicare Beneficiary, 

Specified Low-Income Medicare 

Beneficiary, Qualifying Individual, and 

Qualified Disabled and Working 

Individual eligibility groups, each 

separately codified in §§ 435.123 

through 435.126. 

* * * * * 

■ 34. Add § 435.123 to read as follows: 

§ 435.123 Individuals eligible as qualified 

Medicare beneficiaries. 

(a) Basis. This section implements 

sections 1902(a)(10)(E)(i) and 1905(p)(1) 

of the Act. 

(b) Eligibility. The agency must 

provide medical assistance to 

individuals who meet all of the 

following: 

(1) Are entitled to Medicare Part A 

based on the eligibility requirements set 

forth in § 406.5(a) or § 406.20(b) of this 

chapter or who are enrolled in Medicare 

Part B for coverage of 

immunosuppressive drugs based on 

eligibility requirements described in 

§ 407.55 of this chapter. 

(2) Have an income, subject to 

paragraphs (b)(2)(i) and (ii) of this 

section, that does not exceed 100 

percent of the Federal poverty level. 

(i) During a transition month (as 

defined in paragraph (b)(2)(ii) of this 

section), any income attributable to a 

cost of living adjustment in Social 

Security retirement, survivors, or 


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25138 Federal Register / Vol. 87, No. 81 / Wednesday, April 27, 2022 / Proposed Rules 

disability benefits does not count in 

determining an individual’s income. 

(ii) A transition month is any month 

of the year beginning when the cost of 

living adjustment takes effect, through 

the month following the month of 

publication of the revised official 

poverty level. 

(3) Have resources, determined using 

financial methodologies no more 

restrictive than SSI, that do not exceed 

the Medicare Part D low-income subsidy 

(LIS) resource standard defined in 

section 1860D–14(a)(3)(D) of the Act 

and in § 423.773(d)(2)(ii) of this chapter. 

(c) Scope. Medical assistance 

included in paragraph (b) includes all of 

the following: 

(1) For individuals entitled to 

Medicare Part A as described in 

paragraph (b)(1) of this section, coverage 

for Parts A and B premiums and cost 

sharing, including deductibles and 

coinsurance, and copays. 

(2) For individuals enrolled in 

Medicare Part B for coverage of 

immunosuppressive drugs as described 

in paragraph (b)(1) of this section, only 

coverage of premiums and cost sharing 

related to enrollment in Medicare Part B 

for coverage of immunosuppressive 

drugs. 

■ 35. Add § 435.124 to read as follows: 

§ 435.124 Individuals eligible as specified 

low-income Medicare beneficiaries. 

(a) Basis. This section implements 

sections 1902(a)(10)(E)(iii) and 

1905(p)(3)(A)(ii) of the Act. 

(b) Eligibility. The agency must 

provide medical assistance to 

individuals who meet the eligibility 

requirements in § 435.123(b), except 

that income exceeds 100 percent, but is 

less than 120 percent of the poverty 

level. 

(c) Scope. Medical assistance 

included in paragraph (b) of this section 

includes the following: 

(1) For individuals entitled to 

Medicare Part A as described in 

paragraph (b)(1) of this section, coverage 

for the Part B premium. 

(2) For individuals enrolled under 

Medicare Part B for coverage of 

immunosuppressive drugs as described 

in paragraph (b)(1) of this section, only 

coverage of the Part B premium related 

to enrollment in Medicare Part B for 

coverage of immunosuppressive drugs. 

■ 36. Add § 435.125 to read as follows: 

§ 435.125 Individuals eligible as qualifying 

individuals. 

(a) Basis. This section implements 

sections 1902(a)(10)(E)(iv) and 

1905(p)(3)(A)(ii) of the Act. 

(b) Eligibility. The agency must 

provide medical assistance to 

individuals who meet the eligibility 

requirements in § 435.123(b), except 

that income is at least 120 percent, but 

is less than 135 percent of the federal 

poverty level. 

(c) Scope. Medical assistance 

included in paragraph (b) includes the 

following: 

(1) For individuals entitled to 

Medicare Part A as described in 

paragraph (b)(1) of this section, coverage 

for the Part B premium. 

(2) For individuals enrolled under 

Medicare Part B for coverage of 

immunosuppressive drugs as described 

in paragraph (b)(1) of this section, only 

payment of the Part B premium related 

to enrollment in Medicare Part B for 

coverage of immunosuppressive drugs. 

■ 37. Add § 435.126 to read as follows: 

§ 435.126 Individuals eligible as Qualified 

Disabled and Working Individuals. 

(a) Basis. This section implements 

sections 1902(a)(10)(E)(ii) and 1905(s) of 

the Act. 

(b) Eligibility. The agency must 

provide medical assistance to 

individuals who meet all of the 

following: 

(1) Are entitled to Medicare Part A 

based on the eligibility requirements set 

forth in § 406.20(c) of this chapter. 

(2) Have income, subject to 

paragraphs (b)(2)(1)(i) and (ii) of this 

section, that is less than or equal to 200 

percent of the federal poverty level. 

(i) During a transition month (as 

defined in paragraph (b)(2)(ii) of this 

section), any income attributable to a 

cost of living adjustment in Social 

Security retirement, survivors, or 

disability benefits does not count in 

determining an individual’s income. 

(ii) A transition month is any month 

of the year beginning when the cost of 

living adjustment takes effect, through 

the month following the month of 

publication of the revised official 

poverty level. 

(3) Have resources that do not exceed 

twice the SSI resource standard 

described in section 1613 of the Act. 

(c) Scope. Medical assistance 

included in paragraph (b) of this section 

is coverage of the Part A premium. 

Dated: April 21, 2022. 

Xavier Becerra, 

Secretary, Department of Health and Human 

Services. 

[FR Doc. 2022–08903 Filed 4–25–22; 4:15 pm] 

BILLING CODE 4190–01–P 


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