2023-07115.pdf

of the specific clinical question published in a peer-reviewed journal with clear and consistent results. Evidence that is unpublished, is a case series or report, or derived solely from internal analyses within the MA organization, or that does not comply with the standards, as previously described, would not represent proper justification for instituting internal coverage guidelines that would restrict access to care.101CMS solicited comment on the definition of widely used treatment guidelines and clinical literature that would justify internal coverage criteria used in the absence of NCDs, LCDs, or Traditional Medicare statutes or regulations along with the other requirements proposed in new  422.101(b)(6) b. Medical Necessity Determinations and Special Coverage Provisions Per CMS regulations at  422.112(a)(6)(ii), MA plans must have policies and procedures that allow for individual medical necessity determinations. As a result, an MA organizations coverage rules, practice guidelines, payment policies, and utilization management policies should be applied to make individual medical necessity determinations based on the individual circumstances for the enrollee and item or benefit to be covered. CMS has longstanding guidance interpreting the obligations of MA organizations when making medical necessity determinations. Chapter 4 of the MMCM, section 10.16, provides that MA organizations make coverage VerDate Sep<11>2014 21:20 Apr 11, 2023 Jkt 259001 PO 00000 Frm 00071 Fmt 4701 Sfmt 4700 E:\FR\FM\12APR2.SGM 12APR2ddrumheller on DSK120RN23PROD with RULES222190 Federal Register / Vol. 88, No. 70 / Wednesday, April 12, 2023 / Rules and Regulations determinations that are based on: (1) the medical necessity of plan-covered services based on coverage policies (this includes coverage criteria no more restrictive than Traditional Medicare described previously and proposed at  422.101(b)(6)); (2) where appropriate, involvement of the plans medical director per  422.562(a)(4); and (3) the enrollees medical history (for example, diagnoses, conditions, functional status)), physician recommendations, and clinical notes. We proposed to codify these existing standards for medical necessity decision-making at  422.101(c)(1)(i) and proposed some new requirements to connect medical necessity determinations to our new requirements at  422.101(b). Therefore, as previously discussed, we proposed to codify at  422.101(c)(1)(i)(A) that MA organizations must make medical necessity determinations based on coverage and benefit criteria as defined at  422.101(b) and (c) and may not deny coverage for basic benefits based on coverage criteria not found in those sources. Second, we proposed at  422.101(c)(1)(i)(B) to require MA organizations to consider whether the item or service is reasonable and necessary under 1862(a)(1) of the Act. We note that this has been a longstanding policy in MA based on how section 1852 of the Act requires MA plans to cover items and services for which benefits are available under original Medicare, however, we believe it is important to acknowledge this in the context of MA organization decisions involving medical necessity. Third, we proposed to codify existing policy at  422.101(c)(1)(i)(C) that MA organizations consider the enrollees medical history (for example, diagnoses, conditions, functional status), physician recommendations, and clinical notes. Finally, consistent with current requirements at  422.562(a)(4), we proposed at  422.101(c)(1)(i)(D) that MA organizations medical directors be involved in ensuring the clinical accuracy of medical necessity decisions where appropriate. We solicited comments on when it would be appropriate for the MA organizations medical director to be involved, in light of how  422.562(a)(4) requires the medical director to be responsible for ensuring the clinical accuracy of all organization determinations and reconsiderations involving medical necessity. Authority for MA organizations to use utilization management policies with regard to basic benefits is subject to the mandate in section 1852(a)(1) of the Act that MA plans cover Medicare Part A and Part B benefits (subject to specific, limited statutory exclusions) and, thus, to CMSs authority under section 1856(b) of the Act to adopt standards to carry out the MA provisions. We believe these proposals will further implement the requirements set forth in section 1852 of the Act and  422.100 and 422.101, which require MA organizations to furnish all reasonable and necessary Part A and B benefits. These requirements for how MA organizations make coverage decisions will ensure that MA organizations provide equal access to Part A and Part B benefits as provided in the Traditional Medicare program; overall these mean that MA organizations will not be able to deny coverage for basic benefits using coverage criteria that is not consistent with coverage criteria in Medicare statutes, regulations, NCDs and LCDs or that is not consistent with the limitations proposed in  422.101(b)(6). In explaining the proposals in the proposed rule, we affirmed that coordinated care plans may continue to include mechanisms to control utilization, such as prior authorization, referrals from a gatekeeper for an enrollee to receive services within the plan, and, subject to the rules on physician incentive plans at  422.208 and 422.210, financial arrangements that offer incentives to providers to furnish high quality and cost-effective care in addition to the coverage criteria that comply with  422.101(b). We also affirmed that MA organizations may furnish a given service using a defined network of providers, some of whom may not see patients in Traditional Medicare, under these proposals. Further, we affirmed that MA organizations may encourage patients to see more cost-effective provider types than would be the typical pattern in Traditional Medicare (as long as those providers are working within the scope of practice for which they are licensed to provide care and comply with the provider antidiscrimination rules set forth under  422.205). For instance, MA organizations may offer more favorable cost sharing for certain provider types within their network. We remind MA organizations that any incentives offered to providers and to patients must comply with applicable fraud and abuse laws. In the proposed rule, we acknowledged in the June 2000 final rule that when a health care service can be Medicare-covered and delivered in more than one way, or by more than one type of practitioner, that an MA plan could choose how the covered services will be provided. We proposed a narrower policy that permits MA organizations to continue to choose who provides Part A and Part B benefits through the creation of their contracted networks, but limits MA organizations ability to limit when and how covered benefits are furnished when Traditional Medicare will cover different provider types or settings. We explained that under our proposal at  422.101(c)(1)(i), when care can be delivered in more than one way or in more than one type of setting, and a contracted provider has ordered or requested Medicare covered items or services for an MA enrollee, the MA organization may only deny coverage of the services or setting on the basis of the ordered services failing to meet the criteria outlined in  422.101(c)(1)(i). (We proposed to reserve paragraph (c)(1)(ii) to provide flexibility in modifying the limits on MA medical necessity policies in the future.) For example, if an MA patient is being discharged from an acute care hospital and the attending physician orders post-acute care at a SNF because the patient requires skilled nursing care on a daily basis in an institutional setting, the MA organization cannot deny coverage for the SNF care and redirect the patient to home health care services unless the patient does not meet the coverage criteria required for SNF care in  409.30409.36 and proposed  422.101(b) and (c). We explained that we were unable to quantify the impact of these proposed changes on MA organizations because many MA organizations may already be interpreting our current rules in a way that aligns with what we proposed. MA organizations may have interpreted our longstanding policy that they cannot apply coverage criteria that are more restrictive than Traditional Medicare national and local coverage policies to mean exactly what we proposed here: that they may only deny Medicare items or services based on criteria consistent with Traditional Medicare coverage rules. Other MA organizations may have interpreted our current rules to mean that they can use internal policies, like utilization management guidelines, to deny approval for a particular item or service while directing the MA enrollee to a different, but clinically appropriate, Medicare-covered item or service. The OIG stated in their report that CMS guidance is not sufficiently detailed to determine whether MA organizations may deny authorization based on internal MA organization clinical criteria that go beyond Medicare coverage rules. As a result, we proposed to be clear that MA organizations may not deny authorization based on internal MA VerDate Sep<11>2014 21:20 Apr 11, 2023 Jkt 259001 PO 00000 Frm 00072 Fmt 4701 Sfmt 4700 E:\FR\FM\12APR2.SGM 12APR2ddrumheller on DSK120RN23PROD with RULES222191 Federal Register / Vol. 88, No. 70 / Wednesday, April 12, 2023 / Rules and Regulations 102https://www.cms.gov/Outreach-and- Education/Medicare-Learning-Network-MLN/ MLNMattersArticles/downloads/MM10080.pdf. organization clinical criteria that go beyond Medicare coverage rules or do not comply with proposed  422.101(b)(6) addressing standards for when MA internal coverage rules are permissible. However, we were unable to quantify or predict how many MA organizations are currently operating in a manner that conforms with what we proposed. We solicited comment from stakeholders on the full scope of this burden. We thank commenters for helping inform CMSs policy on coverage criteria for basic benefits in MA. We summarized comments in this section of this rule and our responses follow. Comment: We received several comments thanking CMS for reiterating that MA plans must comply with general coverage and benefit conditions included in Traditional Medicare laws, unless superseded by laws applicable to MA plans, and for clarifying that this includes coverage criteria for inpatient admissions at 42 CFR 412.3, requirements for coverage of Skilled Nursing Facility Care and Home Health Services under Part 409, and Inpatient Rehabilitation Facilities coverage criteria at  412.622(a)(3). Several commenters requested that CMS more clearly state that the proposed revisions to 422.101(b)(2) mean that MA plans must follow the Inpatient Only (IPO) list as well as the two-midnight rule presumption and benchmark for hospital inpatient admissions. Some commenters also requested that CMS more explicitly state that additional coverage criteria are prohibited when the IPO list and two-midnight rule are applicable. One commenter requested that CMS explicitly state that MA plans are prohibited from making medical necessity decisions based only on the duration of a hospital stay. Another commenter requested CMS clarify if plan adherence to  412.3 still allows 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, regardless of the actual duration of the hospital stay. Finally, some commenters asserted that requiring MA plans to follow the two-midnight rule as applied in Traditional Medicare, which includes the two-midnight presumption and benchmark, would violate non- interference rules at 422.256(a)(2)(ii) that preclude CMS from interfering in payment rates agreed to by an MA plan and its contracted providers. Additionally, these commenters stated that the requirements at  412.3 are payment rules and not coverage rules. Response: We thank commenters for their comments. In our proposal at 422.101(b)(2), we stated that MA plans must comply with general coverage and benefit conditions included in Traditional Medicare laws, unless superseded by laws applicable to MA plans. We also stated that this includes coverage criteria for inpatient admissions at 42 CFR 412.3, requirements for coverage of Skilled Nursing Facility Care and Home Health Services under 42 CFR part 409, and Inpatient Rehabilitation Facilities coverage criteria at 42 CFR 412.622(a)(3). We affirm here that the criteria listed at those regulations are applicable in MA. MA organizations are required by Section 1852(a) to provide Part A or Part B items and services (with limited exceptions) through providers that have a contract with the MA organization or by payment to a provider that does not have a contract with the MA organization. CMS has interpreted those obligations in  422.101(a) to require MA organizations to provide coverage of, by furnishing, arranging for, or making payment for these Part A or Part B items and services. Therefore, the 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