2023-07115.pdf

to exclude LI NET from Medicare Plan Finder, consistent with past practice under the demonstration. Therefore, it would not make sense to require certification to data for price comparison purposes, and we proposed to waive this requirement in  423.2536(g). In  423.2516(c), we proposed that the term of the LI NET sponsors appointment would be ongoing provided mutual agreement between CMS and the selected party, subject to an annual contracting and bid process (per proposed  423.2524(c)) to determine payment rates for the upcoming year. As explained in the proposed rule, this approach has worked well during the demonstration, and we saw no reason to adopt a different approach for the permanent program. We proposed to establish in  423.2518 that, if the LI NET sponsor violates its contract, CMS would have the authority to impose intermediate sanctions as outlined in subpart O of the Part D regulations, just as we would for any other Part D sponsor. In  423.2520(a) we proposed that if the LI NET sponsor decides for any reason to non-renew its existing LI NET contract, it must notify CMS by January 1 of the year before the next contract year. Except as provided in paragraph (c) of this section, if CMS decides for any reason to non-renew the existing contract with the incumbent LI NET sponsor, CMS would notify the LI NET sponsor by January 1 of the year before the next contract year. We proposed that CMS could non-renew for any reason, without cause, and the LI NET sponsor would not have a right to appeal the non-renewal. To provide CMS the authority to non-renew the LI NET contract with that particular sponsor for any reason with no appeal, we proposed in  423.2536(e) waiving the appeals requirements in Subpart N except for those relevant to a contract termination. As there has only been a single LI NET sponsor for the duration of the demonstration, and we are anticipating a single LI NET sponsor for the permanent LI NET program, we do not want to assume the risk of the appeals process not providing finality by the time an LI NET sponsor would need to begin preparing the LI NET bid. Even if we required the appeals process to be complete by the April timeframe and while the appeal was pending moved forward with selection process, we would be cutting into or needing to forgo entirely the transition time of 3 months we proposed in  423.2520(b) to ensure seamless transition of the LI NET program. Proposing to assume these risks would not further the purpose of the LI NET program being ready and available to provide immediate, current, and retroactive coverage for LI NET enrollees. We note that non-renewal, whether at the election of CMS or the LI NET sponsor, would not have an impact on the sponsors eligibility to be selected as the LI NET sponsor in future years. We intend to initially contract with a single Part D sponsor to administer the LI NET program. Unlike beneficiaries in traditional Part D plans, beneficiaries enrolled in LI NET would not have the option of simply choosing to enroll in LI NET under a different sponsor. For these reasons, ample notice is needed if the LI NET sponsor does not intend to continue as the LI NET sponsor in the following year. We anticipate that CMS would be able to provide the same amount of notice to the LI NET sponsor if we were contemplating changing the LI NET sponsor for the following year. A decision to non-renew the LI NET contract with a particular Part D sponsor would not bar or prohibit that sponsor from being considered to be the LI NET sponsor in a future year. Any CMS decisions regarding LI NET sponsor selection would have no bearing on a Part D sponsor proceeding with the application process for other, non-LI NET, Medicare prescription drug plans. In  423.2520(b), we proposed that after a notice of non-renewal, CMS would select a successor LI NET sponsor from among the other eligible entities (as detailed in proposed  423.2516). Similar to how our multi- year contracts with our contractors require an outgoing contractor to coordinate with any successor contractor during a transition period, proposed  423.2520(b) would require the outgoing LI NET sponsor to coordinate with the successor LI NET sponsor appointed by CMS for a period of no less than 3 months to ensure seamless transition for LI NET enrollees, including timely transfer of any data or files. All data, files, written materials, and LI NET work products would be considered CMSs property. During the transition period, the outgoing and incoming LI NET sponsors would work together to develop a transition plan, including setting up a training schedule and a schedule of events for a smooth changeover. There may be exigent circumstances of risk to beneficiaries in which a more immediate termination is warranted. Referencing portions of CMSs immediate termination authority in  423.509, we proposed to establish in VerDate Sep<11>2014 21:20 Apr 11, 2023 Jkt 259001 PO 00000 Frm 00025 Fmt 4701 Sfmt 4700 E:\FR\FM\12APR2.SGM 12APR2ddrumheller on DSK120RN23PROD with RULES222144 Federal Register / Vol. 88, No. 70 / Wednesday, April 12, 2023 / Rules and Regulations  423.2520(c) that CMS may terminate the LI NET contract immediately if: CMS determinates that a delay in termination, resulting from non- compliance with the procedures provided in this Part prior to termination, would pose an imminent and serious risk to the health of the individuals enrolled with the LI NET sponsor, per  423.509(b)(2)(i)(A); The LI NET sponsor has experienced financial difficulties so severe that its ability to make necessary health services available is impaired to the point of posing an imminent and serious risk to beneficiary health, or otherwise fails to make services available to the extent that such a risk to health exists per  423.509(b)(2)(i)(B); or The LI NET sponsor has had one or more of the issues enumerated in paragraphs (a)(4)(i) and (xii) of  423.509. Proposed  423.2520(d) would provide that if CMS intends to terminate the contract under proposed  423.2520(c), CMS provides written notice to the LI NET sponsor informing it of its termination appeal rights in accordance with subpart N of this Part. We expect to identify the LI NET contract as X0001 and to advance the plan benefit package number by one each year so that we can update the payment rates in our systems for the new payment year. If the LI NET contract with a particular LI NET sponsor is terminated, we would not discontinue use of the contract number X0001. Instead, we would terminate the relationship with that specific LI NET sponsor to provide LI NET coverage and continue to allow enrollment under contract X0001. 6. Bidding and Payments to the LI NET Sponsor Section 1860D14(e) of the Act does not specify how CMS is to determine the amounts that it pays to the LI NET sponsor under the contract or how payments are to be made. We proposed to establish the methodology and formulas that we would use to determine the amounts we pay to the LI NET sponsor under the contract. As noted in the proposed rule, we use our payment policies under the demonstration, including the bidding requirements, as the basis for the proposed payment policies for the LI NET program. We proposed in  423.2524(a) that CMS payments for the LI NET program would be made from the Medicare Prescription Drug Account, as payments are made to other Part D sponsors. In  423.2524(b) we proposed requirements related to the LI NET bid. Because most of the provisions in Subpart F would not be applicable to LI NET, we proposed to waive Subpart F except for those provisions we proposed to apply to LI NET. Section 423.2524(b)(1) proposed that the submission of LI NET bids and related information will follow the requirements and limitations in Part 423, Subpart F,  423.265(b), (c), (d)(1), (d)(2)(i), (d)(2)(ii), (d)(2)(iv), (d)(2)(v), (d)(4), (d)(6), and (e). This proposal would require the LI NET sponsor to submit a bid and supplemental information in a format specified by CMS, with the same deadline as other Part D bids of no later than the first Monday of June each year. It also gives CMS the ability to request additional information from the LI NET sponsor to support bid amounts, and the ability to require revisions to the submitted LI NET bid before it is accepted. As with other Part D bids, a qualified actuary, whether internal or external to the plan sponsor, would certify the LI NET sponsors actuarial valuation (which may be prepared by others under the qualified actuarys direction or review). The qualified actuary would need to be a member of the American Academy of Actuaries. We proposed in  423.2524(b)(2) that the following provisions would apply in the review, negotiation, and approval of the LI NET bid:  423.272(a), (b)(1), and (b)(4). This would allow CMS to review the LI NET bid, conduct negotiations regarding the terms and conditions of the proposed bid, and approve it only if the bidding LI NET sponsor and the LI NET plan comply with all applicable CMS Part D requirements. As in typical Part D bid reviews, CMS would be able to decline the LI NET bid if it proposed significant increases in cost sharing ( 423.272(b)(4)). This approach follows the bid process under the demonstration, in which the LI NET sponsor submits a bid that estimates their costs and includes assumptions for enrollment and utilization based on prior experience. Starting with plan year 2021, the LI NET sponsor began using an LI NET Bid Pricing Tool (BPT) and accompanying instructions that were adapted from the traditional Part D BPT and instructions. Once the LI NET bid is accepted, we update this information in our systems for the new payment year for the LI NET demonstration. Each year, we advance by one the number designating the current plan benefit package. For example, the contract-PBP was X0001011 for plan year 2021 and X0001012 for plan year 2022. Proposed  423.2524(b)(3) specifies the basic rule and major components of the LI NET bid, which are the LI NET sponsors estimate of its revenue needs for Payment Rates A and B, which are discussed in greater detail in proposed  423.2524(d). In  423.2524(c) we proposed that CMS would provide advance monthly LI NET payments, on a per-member, per-month (PMPM) basis, equal to the sum of Payment Rates A and B as established in the LI NET sponsors approved bid submitted annually under paragraph (b) of this proposed section. Paying on a PMPM basis would align with other Part D payments and with our operations under the LI NET demonstration in which we provide a capitated PMPM amount established by the bid for each beneficiary enrolled in the demonstration. Unlike typical Part D monthly payments, the monthly LI NET payment under the demonstration is a PMPM amount that represents the sum of Payment Rates A and B, as determined by the LI NET bid. The bid represents the LI NET sponsors total expected cost, minus any beneficiary co- pays, and with a reasonable margin that represents the LI NET sponsors profit. Also, unlike other Part D payments, payments under the LI NET demonstration would not be risk adjusted. Because payments under the LI NET demonstration are cost reconciled (with the exception of risk corridors) and there is no concern about the LI NET sponsor cherry-picking beneficiaries, we use a simpler payment methodology that does not include risk adjustment. We proposed in  423.2524(c)(1) that Payment Rate A would be a monthly payment for projected administrative costs, constrained by an annual percentage cap set as part of the bid review and negotiation under  423.272(a). Payment Rate A would include two elements, as it does under the demonstration. The first would be the LI NET sponsors estimated administrative costs, which would represent the administrative costs to run the LI NET program inclusive of an amount for the margin, which represents the LI NET sponsors profit. The second element in Payment Rate A would be the LI NET sponsors estimated costs to pay pharmacy claims for prescriptions filled by immediate need individuals, for which the LI NET sponsor may not be able to submit a prescription drug event (PDE) record to CMS due to the individuals unconfirmed LIS status. We expect that these are generally the immediate need beneficiaries who are not confirmed to be LIS-eligible. We VerDate Sep<11>2014 21:20 Apr 11, 2023 Jkt 259001 PO 00000 Frm 00026 Fmt 4701 Sfmt 4700 E:\FR\FM\12APR2.SGM 12APR2ddrumheller on DSK120RN23PROD with RULES222145 Federal Register / Vol. 88, No. 70 / Wednesday, April 12, 2023 / Rules and Regulations proposed in  423.2524(c)(1)(i) that for the 2024 plan year, the LI NET sponsor includes in its bid the assumption that Payment Rate A cannot exceed a 2 percent increase from the prior years Payment A, which is a figure CMS will provide to the LI NET sponsor. For the 2025 plan year and subsequent plan years, proposed  423.2524(c)(1)(ii) would require the LI NET sponsor to specify its assumption for any increase needed to the prior years Payment Rate A, submitting justification to CMS in its bid if the cap exceeds 2 percent. Any proposed increase in Payment Rate A from year-to-year would not be able to exceed the percentage cap. Similar to how CMS determines reasonableness in evaluating a plans anticipated profit in the bid, we