`[Federal Register Volume 87, Number 81 (Wednesday, April 27, 2022)]
[Proposed Rules]
[Pages 25090-25138]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-08903]



[[Page 25089]]

Vol. 87

Wednesday,

No. 81

April 27, 2022

Part II





 Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Parts 400, 406, 407, et al.





Medicare Program; Implementing Certain Provisions of the Consolidated 
Appropriations Act, 2021 and Other Revisions to Medicare Enrollment and 
Eligibility Rules; Proposed Rule

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

[[Page 25090]]


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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.

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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 Sec. Sec.  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

[[Page 25091]]

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

[[Page 25092]]

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 Sec. Sec.  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 Sec.  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 Medicare-eligible 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 buy-in.'' All 50 states and the District of 
Columbia have buy-in agreements for Part B \1\ with the Secretary.
---------------------------------------------------------------------------

    \1\ Thirty-seven states (including the District of Columbia) 
also have buy-in agreements for Part A.
---------------------------------------------------------------------------

    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. 
Low-income 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 full-benefit 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 (Sec. Sec.  
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

[[Page 25093]]

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 auto-enrolled 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.

------------------------------------------------------------------------
                                Prior to 1/1/23--   On or after 1/1/23--
       Enrolls in IEP:         Entitlement begins    Entitlement begins
                                       on:                   on:
------------------------------------------------------------------------
January.....................  April 1 (month        April 1 (month
                               eligibility           eligibility
                               requirements first    requirements first
                               met).                 met).
February....................  April 1.............  April 1.
March.......................  April 1.............  April 1.
April.......................  May 1 (month          May 1.
                               following month of
                               enrollment).
May.........................  July 1 (second month  June 1.
                               after month of
                               enrollment).
June........................  September 1 (third    July 1.
                               month after month
                               of enrollment).
July........................  October 1 (third      August 1.
                               month after month
                               of enrollment).
------------------------------------------------------------------------

    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

[[Page 25094]]

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 Sec.  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 Sec.  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 Sec.  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 Sec.  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, Sec.  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 Sec.  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 Sec.  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.
---------------------------------------------------------------------------

    \2\ CMS 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.
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    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.

[[Page 25095]]

     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 Sec. Sec.  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 case-by-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-by-case 
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 Sec.  
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 Sec.  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 
Sec. Sec.  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 Sec.  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 Sec.  406.27, any months of non-coverage 
would be excluded from the calculation of the

[[Page 25096]]

LEP. Similarly, we are proposing at Sec.  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 Sec.  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 
Sec. Sec.  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 
Sec. Sec.  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 Sec. Sec.  406.27 or 407.23, 
respectively, any months of non-coverage 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 
non-coverage, including the months during the exceptional condition 
SEP, would be taken into consideration for calculating the LEP in 
accordance with Sec. Sec.  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 Sec. Sec.  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 Sec. Sec.  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 Sec. Sec.  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 Sec. Sec.  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 Sec.  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

[[Page 25097]]

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 Sec.  
406.27(c) and at Sec.  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 Sec. Sec.  
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 Sec.  406.27(c)(2) and Sec.  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 Sec. Sec.  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 Sec. Sec.  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 
Sec. Sec.  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 Sec. Sec.  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 Sec. Sec.  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

[[Page 25098]]

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 Sec.  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.
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    \3\ The adult group under Sec.  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).)
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    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.
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    \4\ For 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.
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    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 Sec.  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 Sec.  
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 Sec.  
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\
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    \5\ See 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-dual-eligible-status-frequency-contributing-factors-implications, page 38.
    \6\ Recent 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.
    \7\ Under 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 buy-in''). 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.
    \8\ See section II.D.3.e. of this proposed rule for a discussion 
of buy-in coverage groups available for Part B.
    \9\ As 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.
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    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

[[Page 25099]]

with the continuous enrollment requirement.\10\
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    \10\ See 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.
---------------------------------------------------------------------------

    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 Sec. Sec.  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 Sec. Sec.  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 Sec. Sec.  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 
Sec. Sec.  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 Sec. Sec.  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 Sec. Sec.  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 Sec. Sec.  406.27(e)(4) and Sec.  
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 Sec. Sec.  
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,

[[Page 25100]]

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 Sec.  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 low-income 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-by-case 
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 Sec. Sec.  406.27(f) and 407.23(f). We are proposing 
at Sec. Sec.  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 Sec. Sec.  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 Sec. Sec.  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

[[Page 25101]]

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 Sec.  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 Sec.  
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 Sec.  
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 Sec.  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 Sec.  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 Sec.  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 Sec.  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 Sec.  408.24 before January 
1, 2023.
     At Sec.  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 Sec.  408.24(b) would require that for 
individuals who satisfy the requirements of Sec.  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 Sec.  
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 Sec.  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 Sec.  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 Sec.  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 Sec.  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 Sec.  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 Sec.  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 Sec.  408.24. Specifically, we propose to 
amend Sec.  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 Sec.  
408.24 before January 1, 2023. New Sec.  408.24(d) would require that 
for individuals who satisfy the requirements of Sec.  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 Sec.  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 Sec.  408.24 (a)(1) 
through (10) and also excluding months before April 1981 during which 
the individual was precluded from reenrolling by the two-enrollment 
limitation in effect before that date. Further, as discussed 
previously, an individual who missed an enrollment period due to an

[[Page 25102]]

exceptional condition, and who enrolls in Part B using an exceptional 
condition SEP, would not be subject to a LEP. Therefore, we propose in 
Sec.  408.24(d)(2)(ii) that if an individual uses an exceptional 
condition SEP under Sec.  407.23 any months of non-coverage 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 (Sec. Sec.  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.
---------------------------------------------------------------------------

    \11\ Under 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.
---------------------------------------------------------------------------

    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).
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    \12\ United 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.
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    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 Sec.  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 Sec.  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 Sec. Sec.  407.1, 408.20, 
410.30, 423.30 and establish a new Subpart D (Sec. Sec.  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 Sec.  407.1(a)(6). We specifically propose in Sec.  
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 Sec.  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 Sec.  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 Sec.  407.1(b)(1), including the 
reference to the rules governing premiums in part 408 of this chapter. 
At new Sec.  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

[[Page 25103]]

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 Sec.  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 Sec.  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 Sec.  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 ``pre-termination 
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 Sec.  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 Sec.  407.55, 
entitled ``Eligibility to enroll.'' Specifically, in Sec.  407.55(a), 
we propose that an individual would be eligible to enroll in, be deemed 
enrolled, or re-enroll 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 Sec.  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

[[Page 25104]]

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 Sec.  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 Sec.  
407.59. Specifically, we are proposing at Sec.  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 Sec.  407.55(b). Similarly, at 
Sec.  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 Sec.  
407.57(d) that, to enroll in the Part B-ID benefit, an individual must 
submit the required attestation as described in Sec.  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 Sec.  
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 Sec.  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 Sec.  407.57, titled 
``Part B-ID benefit enrollment.'' Specifically, we are proposing at 
Sec.  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 Sec.  407.55, and provides the attestation 
required in proposed Sec.  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 Sec.  
407.57(b) that an individual whose Part A entitlement ends in 
accordance with revised Sec.  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 Sec.  407.55 and provides 
the attestation required in proposed Sec.  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 Sec.  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 Sec.  407.55 and provides the

[[Page 25105]]

attestation required in proposed Sec.  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 Sec.  
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 Sec.  407.55 and provides the attestation as required 
under Sec.  407.59, we are proposing the following entitlement dates in 
Sec.  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 Sec.  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 
Sec.  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 Sec.  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 Sec.  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 Sec.  407.55(b) and notifies the 
Commissioner of this health coverage consistent with Sec.  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 Sec.  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 Sec.  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 Sec.  
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 
Sec.  407.62(a)(1), specifically that when an individual enrolls in 
other coverage and provides notification consistent with Sec.  
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 Sec.  407.62(a)(2) that if an individual who is enrolled 
in the Part B-ID benefit fails

[[Page 25106]]

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 Sec.  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 Sec.  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 Sec.  407.55(b) but does not 
notify SSA within 60 days consistent with Sec.  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 Sec.  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 Sec.  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 Sec.  407.62(f) that, if an individual 
is involuntarily disenrolled from the Part B-ID benefit based on Sec.  
407.62(a)(2), (b) or (c), they will be permitted an initial 
determination appeal as outlined in Sec.  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 Sec.  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 
Sec.  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 Sec.  
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 Sec.  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 Sec.  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 Sec. Sec.  
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 Sec.  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

[[Page 25107]]

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.
---------------------------------------------------------------------------

    \13\ There 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.
---------------------------------------------------------------------------

    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 cost-sharing.
    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 cost-sharing 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 cost-
sharing 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 Sec.  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 Sec.  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 Sec.  
435.916(d) even if they might obtain coverage under Medicare through 
enrollment in the Part B-ID benefit. Under Sec.  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 Sec. Sec.  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 
Sec. Sec.  435.916(f) and 435.911.
---------------------------------------------------------------------------

    \14\ In most states, receipt of SSI automatically qualifies an 
individual for Medicaid. See Sec.  435.120.
---------------------------------------------------------------------------

    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 Sec.  435.4 in accordance with Sec.  435.1200(e), as 
required under Sec.  435.916(f). This would include referring the 
individual to an Exchange

[[Page 25108]]

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 Sec.  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 Sec.  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 Sec.  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 Sec.  435.917 and 
part 431, subpart E.
    If, as a result of the redetermination process that must be 
completed prior to termination under Sec.  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 Sec.  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 Sec.  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 Sec.  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 
Sec.  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 Sec.  
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 Sec.  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 buy-in 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 Sec.  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 Sec.  
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 full-
benefit Medicaid under the adult group described at Sec.  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

[[Page 25109]]

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 Sec.  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.
---------------------------------------------------------------------------

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

    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.
---------------------------------------------------------------------------

    \16\ See https://www.niddk.nih.gov/health-information/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/.
---------------------------------------------------------------------------

    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 Sec. Sec.  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 Sec.  407.62 if the 
individual (1) enrolls in other health insurance that makes them 
ineligible for the Part B-ID benefit as described in Sec.  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 Sec.  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

[[Page 25110]]

MSP, which would then pay the Medicare Part B premiums and, if 
applicable, Part A premiums and cost-sharing 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 Sec.  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 (Sec.  408.22), the income-related monthly adjustment 
amount (Sec.  408.28), or for beneficiaries subject to non-standard 
premiums (Sec.  408.20).
    We are proposing to create a new paragraph Sec.  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 Sec.  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 Sec.  408.20(f)(2)(i) that the Part B-ID benefit premium 
would be subject to adjustments specified in Sec. Sec.  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 Sec.  
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 
Sec.  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 Sec.  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 Sec.  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 Sec.  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 Sec.  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.
---------------------------------------------------------------------------

    \18\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c15.pdf.
    \19\ https://www.cms.gov/medicare-coverage-database/search.aspx.
---------------------------------------------------------------------------

    A beneficiary will typically gain access to the drug through a 
pharmacy, where applicable supplying fees to

[[Page 25111]]

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 ASP-
based 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.
---------------------------------------------------------------------------

    \20\ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice.
---------------------------------------------------------------------------

    We are proposing to revise Sec.  410.30(b) to specify that 
beginning January 1, 2023, individuals who meet the requirements as 
specified in section Sec.  407.55 are eligible to receive Medicare Part 
B benefits for purposes of Sec.  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 Sec.  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 pre-termination 
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 (Sec.  406.7 and 407.11)

    We propose to revise Sec. Sec.  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 Sec. Sec.  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 Sec. Sec.  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 Sec.  407.11 
lists the forms 40-D and 40-F, which are obsolete.
    We are proposing to change our regulations in Sec. Sec.  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 Sec.  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 Sec.  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 Sec.  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 
Sec.  406.7 to refer to ``monthly Social Security benefits'' instead of 
``monthly social benefits.''

D. Modernizing State Payment of Medicare Premiums (Sec. Sec.  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 cost-sharing. 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) Sec.  406.21, which was last revised in 1996; (2) Sec. Sec.  
406.26, and 407.40 through 48, which were last revised in 1991; \21\ 
(3) Sec.  431.625, which

[[Page 25112]]

was last revised in 1988; and (4) Sec.  400.200, which was last revised 
in 1983. We also propose to add new Sec. Sec.  435.123 through 435.126 
and to revise Sec.  435.4 to codify in CMS Medicaid regulations the 
Medicare Savings Programs under section 1902(a)(10)(E) of the Act.
---------------------------------------------------------------------------

    \21\ We note that CMS made a minor technical update to Sec.  
407.42 to remove the reference to the obsolete regulatory provision, 
Sec.  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).
---------------------------------------------------------------------------

    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 (Sec.  
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 
buy-in states''), but 14 states use the group payer arrangement to pay 
Part A on behalf of QMBs under Sec.  406.32(g) (``group payer 
states'').\22\
---------------------------------------------------------------------------

    \22\ The 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.
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    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 Buy-In 
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 free-standing 
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 free-
standing 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.
---------------------------------------------------------------------------

    \23\ States 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.''
---------------------------------------------------------------------------

    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 Sec.  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' long-standing practice of effectuating changes in buy-in 
policy through the Medicaid state plans, rather than through the free-
standing 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 free-standing buy-in agreements 
would be superseded by provisions related to buy-in 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

[[Page 25113]]

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 Sec.  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 
(Sec.  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 buy-in coverage group as explained 
in this section of this rule.
---------------------------------------------------------------------------

    \24\ For individuals enrolled in Medicaid eligibility groups 
related to cash assistance and QMB, SLMB, and QI, Sec.  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, Sec.  
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.
    \25\ When 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 Sec.  407.10(a)(1).
---------------------------------------------------------------------------

    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 Sec.  
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.
---------------------------------------------------------------------------

    \27\ For individuals enrolled in Medicaid eligibility groups 
related to cash assistance and QMB, SLMB and QI, Sec.  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, Sec.  
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.
---------------------------------------------------------------------------

    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 Sec.  435.120 (``Individuals receiving SSI'') or meets the 
eligibility requirements under Sec.  435.121 (``Individuals in states 
using more restrictive requirements for Medicaid than the SSI 
requirements'' \28\) and is retroactively entitled to Part A.
---------------------------------------------------------------------------

    \28\ States 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 low-income individuals who seek Medicaid 
eligibility on the basis of being 65 years of age or older or having 
blindness or disability.
---------------------------------------------------------------------------

     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 disability-related 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\
---------------------------------------------------------------------------

    \29\ A 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 Sec.  404.622 of chapter 20, 
whereas individuals can obtain SSI payments no earlier than the 
first month after they applied for benefits under Sec.  416.335 of 
chapter 20.
---------------------------------------------------------------------------

     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

[[Page 25114]]

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 Sec.  
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\
---------------------------------------------------------------------------

    \30\ Individuals eligible for Medicare are not eligible for 
coverage under the adult group under Sec.  435.119. A state must 
redetermine propsective eligibility for adult group beneficiaries 
under Sec.  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 buy-in agreement, the state would 
have to enroll this individual in Part B.
---------------------------------------------------------------------------

    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 Sec.  
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.
---------------------------------------------------------------------------

    \31\ Available on the CMS website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c01.pdf.
---------------------------------------------------------------------------

    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 Sec.  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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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 Sec.  407.47 to establish a general rule under which state liability 
for retroactive Medicare Part B

[[Page 25115]]

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.
---------------------------------------------------------------------------

    \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 cost-sharing, that certain individuals are entitled to under 
Sec.  440.210 and Sec.  440.330.
---------------------------------------------------------------------------

    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 Sec.  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 Sec.  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), 
Sec.  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, Sec.  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 buy-in 
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 Sec.  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.

[[Page 25116]]

    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 Sec.  
407.42(b)(3)) retroactive to October 1 of the previous calendar year 
(under Sec.  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 (Sec.  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 Sec.  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 Sec.  400.200 with streamlined 
references to the proposed QMB definition in Sec.  435.123 and the 
proposed QDWI definition in Sec.  435.126, respectively. We also 
propose to add definitions for the Medicare Savings Programs, SLMB, and 
QI in Sec.  400.200 that reference the corresponding proposals defining 
the Medicare Savings Programs in Sec.  435.4 and the proposed 
codification of SLMB in Sec.  435.124 and QI in Sec.  435.125. These 
proposals in Sec.  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 (Sec.  406.21)
    Paragraph (a) of Sec.  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 Sec.  
407.40. The proposal would codify long-standing policy that QMB-
eligible 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 (Sec.  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 Sec.  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 Sec.  407.40, QMB-eligible 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 Sec.  406.26 in the August 1991 final rule.)
d. Revisions to Enrollment Under a State Buy-In Agreement (Sec.  
407.40)
    We propose a series of revisions to Sec.  407.40 to reflect 
statutory updates and codify agency practices related to buy-in 
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 Sec.  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

[[Page 25117]]

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 Sec.  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 buy-in, 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 Sec.  400.200 to 
prevent confusion stemming the term being defined in two different 
places in current regulations.
     To revise the definition of state buy-in 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 Sec.  407.40 to 
align with proposed new paragraph (a)(3) under Sec.  406.26, which 
reflects the current prohibition against discrimination in enrollment 
and streamlined enrollment processes under buy-in. Specifically, 
proposed Sec.  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 Sec.  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 (Sec.  
407.42)
    Section 407.42 describes the Part B-related 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 buy-in population. Paragraph (a) also 
affords states the option to target in their buy-in 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.
---------------------------------------------------------------------------

    \35\ See 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.
---------------------------------------------------------------------------

    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

[[Page 25118]]

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\
---------------------------------------------------------------------------

    \36\ See 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.''
    \37\ Prior 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.
    \38\ States 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).
---------------------------------------------------------------------------

    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 Sec.  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\
---------------------------------------------------------------------------

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

    However, Sec.  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 Sec.  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.
---------------------------------------------------------------------------

    \40\ Pub. 100-24, State Buy-In Manual, Chapter 1, Section 110 
(November 1996).
---------------------------------------------------------------------------

    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 buy-in coverage groups, together with their underlying 
eligibility groups, is more readily understandable for all parties. 
Therefore, we propose replacing the current framework in Sec.  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 
Sec.  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 
(Sec.  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

[[Page 25119]]

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).
---------------------------------------------------------------------------

    \41\ Under Sec.  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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \42\ Similarly, 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.
---------------------------------------------------------------------------

g. Revisions to Coordination of Medicaid With Medicare Part B (Sec.  
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 Sec.  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 Sec.  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 Sec. Sec.  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) cross-references these individuals to Sec.  435.115. 
However, CMS eliminated the references to the AFDC benefit and section 
414(g)-related work supplementation programs from Sec.  435.115 for 
being obsolete in the November 2016 final rule. (CMS has not modified 
or eliminated the territory regulation cross-reference, at Sec.  
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 
Sec. Sec.  435.145 and 436.114(e), which have both been revised since 
this list was last

[[Page 25120]]

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.
---------------------------------------------------------------------------

    \43\ CMS last modified Sec.  435.145 in the November 2016 final 
rule and last updated Sec.  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).
---------------------------------------------------------------------------

     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 
Sec.  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 
Sec. Sec.  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.
---------------------------------------------------------------------------

    \44\ CMS last modified Sec.  435.115 in the November 2016 final 
rule and last changed Sec.  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''.
---------------------------------------------------------------------------

    While we propose to eliminate from Sec.  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 Sec.  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 Sec.  400.200, to the eligibility groups 
for which FFP is available. This proposed addition of paragraph (viii) 
would codify long-standing 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 Sec.  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 buy-in coverage group. Under our proposed Sec.  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 Sec.  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 Sec.  
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 (Sec. Sec.  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

[[Page 25121]]

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 Sec.  435.4.
    We believe that our proposals in part 435--together with our 
proposals in Sec.  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 Sec.  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 Sec.  
435.123 to codify the QMB eligibility group under sections 
1902(a)(10)(E)(i) and 1905(p)(1) of the Act. Proposed Sec.  
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 Sec.  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 Sec.  435.123 (b)(2) and (b)(3) describe the income and 
resource limits for the QMB eligibility group identified previously. 
Further, proposed Sec.  435.123(b)(2) and (b)(3) reflect that under 
section 1902(r)(2) of the Act and Sec.  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\
---------------------------------------------------------------------------

    \45\ According 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-and-CHIP.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.
---------------------------------------------------------------------------

    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 Sec.  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 Sec.  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 Sec.  435.124 for the SLMB eligibility 
group and new Sec.  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 Sec.  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 Sec.  435.126 for the QDWI 
eligibility group. Paragraphs (a) through (c) of the proposed QDWI 
provision reflect that, in accordance with sections

[[Page 25122]]

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 buy-in 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 (Sec.  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 Sec.  
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 (Sec.  407.43)
    We considered updating Sec.  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 buy-in coverage groups in Sec.  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.
---------------------------------------------------------------------------

    \46\ The Northern Mariana Islands are governed by Sec.  407.42.
---------------------------------------------------------------------------

    We seek comments for consideration in the final rule on whether 
updating the buy-in coverage groups in Sec.  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 (Sec.  407.48(c))
    We considered proposing modifications to Sec.  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.
---------------------------------------------------------------------------

    \47\ This policy is currently codified at Sec.  407.48(c).
---------------------------------------------------------------------------

d. State Payment of Medicare Premiums When Medicare Benefits Are Not 
Available (Sec. Sec.  406.26 and 407.40)
    We considered revising Sec.  406.26 and Sec.  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

[[Page 25123]]

(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
----------------------------------------------------------------------------------------------------------------
                                                                                Fringe benefits
              Occupation title                Occupation code    Mean hourly    and overhead ($/ Adjusted hourly
                                                                 wage ($/hr)          hr)          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 (Sec. Sec.  
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 Sec. Sec.  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
----------------------------------------------------------------------------------------------------------------
                                           Individuals enrolling    Individuals enrolling
                  Year                       in premium Part A       in Part B during the    Total Part A and B
                                               during the GEP                GEP               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 x 0.30) SEP requests annually. As such, we 
estimate an

[[Page 25124]]

annual ongoing burden of 7,862 hours (31,449 requests x 0.25 hr/
request) at a cost of $220,214.62 (7,862 hr x $28.01/hr).
2. ICRs Regarding Extended Months of Coverage of Immunosuppressive 
Drugs for Kidney Transplant Patients (Sec. Sec.  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 Sec. Sec.  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 Sec.  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 PDF-fillable 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 Sec.  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

[[Page 25125]]

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 x 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.
---------------------------------------------------------------------------

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

    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 x 0.167 hr) at a 
cost of $364 (13 hr x $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 Low-Income 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 Sec.  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 non-expansion 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 QMB-only, 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 Sec.  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

[[Page 25126]]

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 (Sec. Sec.  406.7 and 407.11)
    As described in section II.C. of this rule, we are proposing to 
revise Sec. Sec.  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 (Sec.  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 (Sec.  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.
---------------------------------------------------------------------------

    \49\ CMS-40-D was obsoleted 3/2022.
---------------------------------------------------------------------------

++ CMS-40-F \50\--Application for Medical Insurance
---------------------------------------------------------------------------

    \50\ CMS- 40-F was obsoleted in 2008.
---------------------------------------------------------------------------

C. Summary of Annual Burden Estimates for Proposed Changes

                                               Table 3--Proposed Annual Requirements and Burden Estimates
--------------------------------------------------------------------------------------------------------------------------------------------------------
Regulation section(s) under Title 42  OMB control No. (CMS ID                   Total       Burden per response     Total time   Labor cost   Total cost
             of the CFR                         No.)            Respondents   responses           (hours)            (hours)       ($/hr)        ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sec.  Sec.   406.27 and 407.22......  0938-TBD1 (CMS-10797)..        31,449       31,449  0.25...................        7,862        28.01      220,215
Sec.   407.59.......................  0938-TBD2 (CMS-10798)..           767          767  0.167..................          128        28.01        3,585
Sec.   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/RegulationsandGuidance/Legislation/PaperworkReductionActof1995/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,

[[Page 25127]]

marginalized, and adversely affected by persistent poverty and 
inequality.\51\
---------------------------------------------------------------------------

    \51\ https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/.
---------------------------------------------------------------------------

    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, low-income 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

[[Page 25128]]

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 (Sec. Sec.  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 (Sec. Sec.  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\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

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.

[[Page 25129]]



                                  Part B-ID Benefit Costs and Savings Estimate
                                                  [In millions]
----------------------------------------------------------------------------------------------------------------
                                                  Savings due to
               FY                   Cost due to        saved        Total gross   Part B premium    Net impact
                                       drugs        transplants      benefits         offset
----------------------------------------------------------------------------------------------------------------
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 x (state portion of 
premium (Part B-ID benefit premium ($1,200) x 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 x 0.2) x states' average FMAP rate (1-0.562)-Medicaid 
drug rebate of 50 percent of cost of immunosuppressive drug therapy 
($8,000 x 0.5) x 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.
---------------------------------------------------------------------------

    \53\ We 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.
---------------------------------------------------------------------------

    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 Sec. Sec.  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 Sec. Sec.  400.200, 406.21, 406.26, 407.40 
through 48, 431.625. We also propose to add new Sec. Sec.  435.123 
through 435.126 and to

[[Page 25130]]

revise Sec.  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 stand-alone 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 full-benefit 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 x $110.74). Therefore, we 
estimate that the total cost of reviewing this regulation is $Z ($Y x 
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 non-payment 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

0
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.

0
2. Section 400.200 is amended by--
0
a. Adding definitions of ``Medicare Savings Programs'' and ``Qualified 
Individual'', in alphabetical order;
0
b. Revising the definition of ``Qualified Medicare Beneficiary''; and
0
c. Adding the definition of ``Specified Low-Income Medicare 
Beneficiary'' in alphabetical order.
    The additions and revision read as follows:


Sec.  400.200   General definitions.

* * * * *
    Medicare Savings Programs (MSPs) has the same meaning described in 
Sec.  435.4 of this chapter.
* * * * *
    Qualifying Individual (QI) means an individual described in Sec.  
435.125 of this chapter.
    Qualified Medicare Beneficiary (QMB) means an individual described 
in Sec.  435.123 of this chapter.
* * * * *
    Specified Low-Income Medicare Beneficiary (SLMB) means an 
individual described in Sec.  435.124 of this chapter.
* * * * *

PART 406--HOSPITAL INSURANCE ELIGIBILITY AND ENTITLEMENT

0
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.

0
4. Section 406.7 is revised to read as follows:


Sec.  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 
Sec.  400.200 of this chapter also applies for Medicare entitlement if 
he or she is eligible for hospital insurance at that time.
0
5. Section 406.13 is amended by revising paragraph (f)(2) to read as 
follows:

[[Page 25131]]

Sec.  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 Sec.  407.55.
* * * * *
0
6. Section 406.21 is amended by revising paragraphs (a) and (c)(3) to 
read as follows:


Sec.  406.21   Individual enrollment.

    (a) Basic provision. An individual who meets the requirements of 
Sec.  406.20 (b) or (c), except as provided in Sec.  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 Sec. Sec.  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.
* * * * *
0
7. Section 406.22 is amended by--
0
a. In paragraph (a):
0
i. In the paragraph heading, removng the phrase ``or over.'' and adding 
in its place ``or over before January 1, 2023.''
0
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:'';
0
b. Redesignating paragraph (b) as paragraph (c);
0
c. Adding a new paragraph (b);
0
d. Revising the paragraph heading and introductory text for newly 
redesignated paragraph (c); and
0
e. Adding paragraph (d).
    The revisions and addition read as follows:


Sec.  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 Sec.  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 Sec.  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
0
8. Section 406.26 is amended by--
0
a. Adding paragraph (a)(3); and
0
b. Revising paragraph (b)(2).
    The addition and revision read as follows:


Sec.  406.26  Enrollment under State buy-in.

    (a) * * *
    (3) Enrollment without discrimination. A State that has a buy-in 
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 Sec.  406.20(b) and has QMB status. Under a 
State buy-in agreement, as defined in Sec.  407.40, QMB-eligible 
individuals can enroll in premium hospital insurance at any time of the 
year, without regard to Medicare enrollment periods.
* * * * *
0
8. Add Sec.  406.27 to subpart C to reads as follows:


Sec.  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 Sec.  406.24(a)(4) of this subchapter, 
are provided for individuals that missed a Medicare enrollment period, 
(as specified in Sec. Sec.  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 
non-enrollment 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

[[Page 25132]]

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 Sec.  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 Sec.  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 Sec.  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 Sec.  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.
0
10. Section 406.33 is amended by--
0
a. Revising the introductory text for paragraph (a); and
0
b. Redesignating paragraph (c) as paragraph (d) and adding new 
paragraph (c).
    The revision and addition read as follows:


Sec.  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 Sec.  406.27 provided the 
individual enrolls within the duration of the SEP.
* * * * *
0
11. Section 406.34 is amended by--
0
a. Revising the introductory text for paragraph (a); and
0
b. Redesignating paragraph (e) as paragraph (f) and adding new 
paragraph (e).
    The revision and addition read as follows:


Sec.  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 Sec.  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 Sec.  406.27, provided the individual enrolls 
within the duration of the SEP.
* * * * *

PART 407--SUPPLEMENTARY MEDICAL INSURANCE (SMI) ENROLLMENT AND 
ENTITLEMENT

0
12. The authority citation for part 407 is revised to read as follows:

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

0
13. Section 407.1 is amended by adding paragraph (a)(6) and revising 
paragraph (b) to read as follows:


Sec.  407.1  Basis and scope.

    (a) * * *
    (6) Sections 1836(b) and 1837(n) of the Act provide for coverage of 
immunosuppressive drugs as described

[[Page 25133]]

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 B-
Immunosuppressive Drug Benefit (Part B-ID).
0
14. Section 407.11 is revised to read as follows:


Sec.  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.
0
15. Adding Sec.  407.23 to read as follows:


Sec.  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 Sec.  406.24(a)(4) of this subchapter, 
are provided for individuals who missed a Medicare enrollment period 
(as specified in Sec.  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 
non-enrollment 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 Sec.  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 Sec.  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 Sec.  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:

[[Page 25134]]

    (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.
0
16. Section 407.25 is amended by revising paragraphs (a), (b)(1) and 
(3) to read as follows:


Sec.  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 Sec.  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).
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.
* * * * *
0
17. Section 407.40 is amended by--
0
a. Adding paragraphs (a)(6) through (10);
0
b. In paragraph (b):
0
(i). Revising the introductory text;
0
(ii) Arranging the definitions in alphabetical order;
0
(iii) Adding the definitions of ``1634 State'' in alphabetical order;
0
(iv) Revising the definition of ``AFDC'';
0
(v) Adding the definition of ``Buy-in group'' in alphabetical order;
0
(vi) Removing the definition of ``Qualified Medicare Beneficiary'';
0
(vii) Revising the definition of ``State buy-in agreement or buy-in 
agreement'';
0
c. Revising paragraph (c)(1); and
0
d. Adding paragraph (c)(5) and (6).
    The additions and revisions read as follows:


Sec.  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 Sec.  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

[[Page 25135]]

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 buy-in agreement are not subject to 
increase because of late enrollment or reenrollment.
0
18. Section 407.42 is revised to read as follows:


Sec.  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 buy-in 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 Sec.  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 
Sec.  435.123;
    (B) Specified Low-Income Beneficiary eligibility group described in 
Sec.  435.124; and
    (C) Qualifying Individual eligibility group described in Sec.  
435.125.
    (3) Group 3: All Medicaid Eligibility Groups: This buy-in group 
includes all individuals eligible for Medicaid.


Sec.  407.45  [Removed]

0
19. Section 407.45 is removed.
0
20. Section 407.47 is amended by--
0
a. Revising paragraph (a)(2); and
0
b. Adding paragraphs (f) and (g).
    The revisions and additions read as follows:


Sec.  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.
0
21. Section 407.48 is amended by--
0
a. Revising paragraphs (c)(1) and (2); and
0
b. Adding paragraph (e).
    The revisions and addition read as follows:


Sec.  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.
0
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


Sec.  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 Sec.  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 Sec.  
405.904(a)(1).


Sec.  407.57  Part B-ID benefit enrollment.

    (a) Deemed enrollment. An individual whose Part A entitlement ends 
in

[[Page 25136]]

accordance with Sec.  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 Sec.  407.55, provided he or she provides the attestation 
required under Sec.  407.59 prior to the termination of their Part A 
benefits.
    (b) Individual enrollment. An individual whose Part A entitlement 
ends in accordance with Sec.  406.13(f)(2) of this chapter, and who 
meets the requirements of Sec.  407.55 and provides the attestation 
required under Sec.  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 Sec.  407.55 
and provides the attestation required under Sec.  407.59.
    (d) Attestation. To enroll in the Part B-ID benefit, an individual 
must submit the required attestation as described in Sec.  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 
Sec.  407.59.
    (3) Exception. Enrollments submitted October 1, 2022 through 
December 31, 2022, are effective January 1, 2023.


Sec.  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 Sec.  407.55(b); and
    (b) If the individual does enroll in other coverage described in 
Sec.  407.55(b), the individual will notify SSA within 60 days of 
enrollment in such other coverage.


Sec.  407.62  Termination of coverage.

    (a) Other coverage. An individual who enrolls in other coverage as 
described in Sec.  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 
Sec.  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 Sec.  407.55(b).
    (2) If the individual does not notify SSA of this coverage 
consistent with Sec.  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 Sec.  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 
Sec.  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 Sec. Sec.  
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 
Sec.  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

0
23. The authority citation for part 408 is revised to read as follows:

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

0
24. Section 408.20 is amended by adding paragraph (f) to read as 
follows:


Sec.  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 Sec. Sec.  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 Sec.  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 Sec.  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 Sec.  408.40.
0
25. Section 408.24 is amended by--
0
a. Revising paragraph (a) introductory text;
0
b. Redesignating paragraph (b) as paragraph (c) and adding new 
paragraph (b);
0
c. Revising newly redesignated paragraph (c) introductory text; and
0
d. Adding paragraph (d).
    The revisions and additions read as follows:


Sec.  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--

[[Page 25137]]

    (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 Sec.  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 Sec.  407.23 of this chapter 
provided the individual enrolls within the duration of the SEP.

PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS

0
26. The authority citation for part 410 continues to read as follows:

    Authority:  42 U.S.C. 1302, 1395m, 1395hh, 1395rr, and 1395ddd.

0
27. Section 410.30 is amended by revising paragraph (b) to read as 
follows:


Sec.  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 Sec.  407.55 of this chapter.
* * * * *

PART 423--VOLUNTARY MEDICARE PRESCRIPTION DRUG BENEFIT

0
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.

0
29. Section 423.30 is amended by revising paragraph (a)(1)(i) to read 
as follows:


Sec.  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 Sec.  407.1(a)(6)).
* * * * *

PART 431--STATE ORGANIZATION AND GENERAL ADMINISTRATION

0
30. The authority citation for part 431 is revised to read as follows:

    Authority:  42 U.S.C. 1302.

0
31. Section 431.625 is amended--
0
a. In (d)(1) by removing the reference ``title I, IV-A., X'' and adding 
is its place the reference ``title I, X'';
0
b. By removing paragraphs (d)(2)(i), (vi), and (x);
0
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;
0
d. In newly redesignated paragraph (d)(2)(i) by removing the reference 
``435.114,'';
0
e. By revising newly redesignated paragraph (d)(2)(iii);
0
f. In newly redesignated paragraph (d)(2)(iv) by removing ``chapter'' 
and adding in its place ``subchapter'';
0
g. By revising newly redesignated paragraphs (d)(2)(vi) and (vii);
0
h. By adding new paragraphs (d)(2)(viii) and (ix); and
0
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:


Sec.  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 Sec.  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 Sec.  435.225 of this subchapter.
    (vii) Beneficiaries required to be covered under Sec. Sec.  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 Sec. Sec.  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

0
32. The authority citation for part 435 is revised to read as follows:

    Authority:  42 U.S.C. 1302.

0
33. Amend Sec.  435.4 by adding, in alphabetical order, the definition 
``of Medicare Savings Programs'' as follows:


Sec.  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 
Sec. Sec.  435.123 through 435.126.
* * * * *
0
34. Add Sec.  435.123 to read as follows:


Sec.  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 Sec.  406.5(a) or Sec.  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 
Sec.  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

[[Page 25138]]

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 Sec.  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.
0
35. Add Sec.  435.124 to read as follows:


Sec.  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 Sec.  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.
0
36. Add Sec.  435.125 to read as follows:


Sec.  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 Sec.  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.
0
37. Add Sec.  435.126 to read as follows:


Sec.  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 Sec.  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`