2023-07115.pdf

distinctions between regulations that contain coverage criteria and regulations that contain criteria for Medicare payment in Traditional Medicare are not similarly applicable in the MA program because MA organizations provide coverage by furnishing, arranging for, or making payment for Part A and Part B items and services. As a result, when determining whether Traditional Medicare criteria apply in MA, it is irrelevant whether Traditional Medicare considers the criteria part of a coverage rule or a payment rule, as both address the scope items and services for which benefits are available to Medicare beneficiaries under Parts A and B. MA organizations have discretion about how much and under what conditions they pay their contracted providers that furnish services, but  422.101(a) and (b) are about ensuring that MA enrollees receive the same items and services they would receive if they were enrolled in Traditional Medicare. We explain here what the new rule means and how it works using examples of Traditional Medicare criteria listed at  422.101(b)(2) of this final rule. In regards to inpatient admissions at 412.3, we confirm that the criteria listed at 412.3(a)-(d) apply to MA. We acknowledge that 412.3 is a payment rule for Medicare FFS, however, providing payment for an item or service is one way that MA organizations provide coverage for benefits. Therefore, under  422.101(b)(2), an MA plan must provide coverage, by furnishing, arranging for, or paying for an inpatient admission when, based on consideration of complex medical factors documented in the medical record, the admitting physician expects the patient to require hospital care that crosses two-midnights ( 412.3(d)(1), the two midnight benchmark); when admitting physician does not expect the patient to require care that crosses two- midnights, but determines, based on complex medical factors documented in the medical record that inpatient care is nonetheless necessary ( 412.3(d)(3), the case-by-case exception); and when inpatient admission is for a surgical procedure specified by Medicare as inpatient only ( 412.3(d)(2)). However, it is important to clarify that the two- midnight presumption (the presumption that all inpatient claims that cross two midnights following the inpatient admission order are presumed appropriate for payment and are not the focus of medical review absent other evidence) does not apply to MA plans. The two-midnight presumption is a medical review instruction given to Medicare contractors (for example, MACs, RACs, QIOs) to help them in the selection of claims for medical necessity review. CMS guidance102states that Medicare contractors will presume hospital stays spanning two or more midnights after the beneficiary is formally admitted as an inpatient are reasonable and necessary for Part A payment. Under this presumption, Medicare contractors will generally not focus their medical review efforts on stays spanning two or more midnights after formal inpatient admission. However, this final rule does not dictate how MA organizations will decide which claims to subject to review. Section 1852(g)(1)(A) of the Act states that an MA organization shall have a procedure for making determinations regarding whether an individual enrolled with the plan is entitled to receive a health service and that such determinations regarding whether or not an individual may receive a health service must be made on a timely basis. CMS has adopted regulations governing certain minimum procedures that MA plans must use, including the timing of organization determinations, the content of denial notices, and who must review a decision that the plan expects to be a full or partial denial on the basis of VerDate Sep<11>2014 21:20 Apr 11, 2023 Jkt 259001 PO 00000 Frm 00073 Fmt 4701 Sfmt 4700 E:\FR\FM\12APR2.SGM 12APR2ddrumheller on DSK120RN23PROD with RULES222192 Federal Register / Vol. 88, No. 70 / Wednesday, April 12, 2023 / Rules and Regulations medical necessity before the denial can be issued. (See also section III.G. of this rule regarding the proposal to amend  422.566(d) and 433.629(k) on this last point.) In addition, the regulations in part 422, subpart M address when and why an MA organization may reopen an organization determination at  422.616, which incorporates the reopening regulations at  405.980 through 405.986. However, CMS has not established requirements or limits on how MA organizations prioritize medical claims for review akin to the instructions CMS issues to Traditional Medicare contractors. Therefore, CMS instructions to Traditional Medicare contractors regarding how to prioritize medical claim review do not apply to MA organizations, under our interpretation. Accordingly, the amendments to  422.101(b)(2) finalized here do not include any requirement for how MA organizations select inpatient admission claims for review, but we do confirm that the criteria listed at 412.3(a)-(d) apply. We confirm that MA plans may still use prior authorization or concurrent case management review of inpatient admissions based on whether the complex medical factors documented in the medical record support medical necessity of the inpatient admission, under either the two-midnight benchmark or the case-by- case exception. Further, we do not believe that  422.101(b), as finalized with our clarification about how 42 CFR 412.3 applies in the context of MA, violates the non-interference rule at section 1854(a)(6)(iii). We affirm MA organizations rights to contract with providers of their choosing and to set the price structures, including how and how much contracted providers are paid. In addition, under the rules finalized here, MA organizations may adopt procedures, and in those situations specified in  422.101(b)(6), internal coverage policies for making medical necessity determinations regarding whether an individual is entitled to receive a health care service under Part A or Part B, so long as the requirements and conditions set forth in the regulations are met. Our focus of this policy is not on how or how much MA organizations pay their contracted providers, but on ensuring that MA enrollees receive items and services for which benefits are available under Part A and Part B (excluding hospice care and organ acquisitions for kidney transplants) that they would receive under Traditional Medicare. We clarify here and amend the regulation text at  422.101(b)(2) to state the applicability of the Inpatient Only list in MA, which, under  419.22(n) are those services and procedures that the Secretary designates as requiring inpatient care and for which payment is not made when furnished in a hospital outpatient department under the Medicare Hospital Outpatient Prospective Payment System. We confirm that the Inpatient Only list applies to MA consistent with our read of the statute that when Traditional Medicare pays for a service only when certain conditions are met, meaning that those certain conditions must be met for the service to be considered a Traditional Medicare basic benefit, these same conditions, including setting, must be met in order for the service to be considered part of the basic benefit of an MA plan. As previously stated in this rule and in the proposed rule, if Traditional Medicare covers a service only when certain conditions are met, these conditions must be met in order for the service to be considered part of the Traditional Medicare benefits that must be included as basic benefits covered by an MA plan. Also, we remind MA plans that they may cover the same service when the conditions are not metsuch as in a different setting or from a different type of provideras a supplemental benefit. The regulation at  412.3(d)(2) provides that an inpatient admission for a surgical procedure specified by Medicare as inpatient only under  419.22(n) is generally appropriate for payment under Medicare Part A regardless of the expected duration of care. Therefore, coverage of the inpatient admission for a procedure on the inpatient only list is fully established under the applicable Medicare regulations and the MA plan must cover this type of inpatient admission without application of additional internal criteria under new  422.101(b)(6). Comment: Many commenters expressed concern that the proposed rule limits MA plans ability to adequately assess whether a covered item or service is medically necessary. Some commenters expressed concerns that Medicare coverage guidelines are not specific enough to be relied upon to make medical necessity determinations. One commenter suggested that CMS provide additional clarity regarding what plans should do when there are no CMS guidelines applicable to a service and to provide examples regarding what is permissible under these circumstances. Similarly, one commenter recommended that CMS provide additional clarity on what a plan must do when an NCD or LCD acknowledges that additional coverage criteria may be applied to determine medical necessity. Another commenter requested that CMS establish a process that allows plans to ask CMS questions and request clarity on Medicare guidelines, including the applicability of certain guidelines. One commenter noted that CMS allows Medicare review contractors to use evidence-based guidelines to assist reviewers in making medical necessity determinations consistent with Traditional Medicare and requirements and, as such, MA plans should be able to maintain this ability. Response: We thank commenters for their comments and we believe that Medicare review contractors used in this context means MACs in Traditional Medicare. We understand that Traditional Medicare statutes, regulations, NCDs, and LCDs do not always contain specific criteria for making medical necessity determinations in every situation for every applicable Part A or B service. Thus, in the proposed rule, we stated that when coverage criteria are not fully established in applicable Medicare statutes, regulations, NCDs or LCDs, MA plans may create internal coverage criteria that are based on current evidence in widely used treatment guidelines or clinical literature that is made publicly available. We agree with commenters that in order to adequately adhere to this requirement, MA plans need additional clarity on what it means for Traditional Medicare coverage criteria to not be fully established, and thus allowed to apply internal coverage criteria based on current evidence in widely used treatment guidelines or clinical literature. Based on commenter recommendations, and in order to more explicitly state the circumstances under which MA organizations may apply internal coverage criteria, we are finalizing  422.101(b)(6) with additional modifications compared to the proposed version. We are finalizing a new paragraph (b)(6)(i) to explain in regulation text when coverage criteria are not fully established. At  422.101(b)(6)(i)(A)(C) we explain that coverage criteria are not fully established when additional, unspecified criteria are needed to interpret or supplement general provisions in order to determine medical necessity consistently; NCDs or LCDs include flexibility that explicitly allows for coverage in circumstances beyond the specific indications that are listed in an NCD or LCD; or there is an absence of any applicable Medicare VerDate Sep<11>2014 21:20 Apr 11, 2023 Jkt 259001 PO 00000 Frm 00074 Fmt 4701 Sfmt 4700 E:\FR\FM\12APR2.SGM 12APR2ddrumheller on DSK120RN23PROD with RULES222193 Federal Register / Vol. 88, No. 70 / Wednesday, April 12, 2023 / Rules and Regulations 103https://www.cms.gov/medicare-coverage- database/view/ncd.aspx?NCDId=176 statutes, regulations, NCDs or LCDs setting forth coverage criteria. This means that when any of these three circumstances are present, MA plans may develop and rely upon internal coverage criteria to make medical necessity decisions. We agree with commenters that medical conditions and a patients medical history can be complex and that Medicare coverage guidelines are not specific enough to address every possible scenario when benefits are available under Medicare Parts A or B for every item or service. We also acknowledge, as commenters stated, that MACs are permitted to consider evidence-based guidelines when making individual medical necessity determinations. Based on these comments, and in order to clarify when Traditional Medicare coverage criteria are not fully established, this final rule will permit MA organizations to adopt publicly accessible internal coverage criteria based on current evidence in widely used treatment guidelines when additional, unspecified criteria are needed to interpret or supplement general provisions in order to determine medical necessity consistently. First, we proposed and address in more detail in the following pages how, in addition to basing internal coverage criteria on current evidence in widely established treatment guidelines, MA organizations must follow certain procedures. Second, as specified at  422.101(b)(6)(i)(A), the MA organization must demonstrate that the additional criteria provide clinical benefits that are highly likely to outweigh any clinical harms, including from delayed or decreased access to items or services. We will use this interpretation in monitoring and evaluating compliance with this regulation. We also require in this rule that MA organizations make this explanation publicly accessible, along with the internal coverage criteria in use, and identify the general provisions that the internal coverage criteria supplement so that general provisions can be applied in specific factual circumstances. We explained in the proposed rule, that in some circumstances, NCDs or LCDs expressly include flexibility that allows coverage in circumstances beyond the specific coverage or non- coverage indications that are listed in the NCD or LCD. We also acknowledged in the proposed rule that there are some Part A or Part B benefits that do not have applicable Medicare NCDs, LCDs, or specific traditional Medicare coverage criteria in regulation for MA plans to follow when making medical necessity determinations. Commenters agreed with these statements, and therefore, we are finalizing in the regulation text at  422.101(b)(6)(i)(B) and (C) that coverage criteria are not fully established when NCDs or LCDs include flexibility that explicitly allows for coverage in circumstances beyond the specific indications that are listed in an NCD or LCD or when there is an absence of any applicable Medicare statutes, regulations, NCDs or LCDs setting forth coverage criteria. When identifying whether there is an absence of applicable Medicare statutes, regulations, NCDs, or LCDs, the MA organization needs to look beyond the labels of payment rule or coverage rule, as both serve to establish coverage criteria in MA. Therefore, this rule prohibits MA organizations from applying internal coverage criteria in addition to the applicable Traditional Medicare statutes, regulations, NCDs, or LCDs,