2023-07115.pdf

whereby Medicare covers items and services on the condition that they are furnished in the context of CMS approved clinical studies or with the collection of additional clinical data (for example, registry). A list of NCDCEDs with the coverage protocol for each is available at: https://www.cms.gov/Medicare/ Coverage/Coverage-with-Evidence- Development. As in the proposed rule, we are merely reiterating here that MA plans must cover NCDs with CED and CMS has not proposed or finalized a change in coverage requirements or policy for MA plans on this topic. We solicited comment whether additional regulations are needed to address NCDs with CED; we believe that  422.101(b) is sufficient that these NCDs are within the scope of the traditional Medicare benefits that MA plans must cover and that additional regulations are unnecessary. MA plans may apply utilization management, including prior authorization, to the Medicare benefits covered under these NCDs, consistent with  422.4(a)(1)(ii) of the MA program regulations. Significant Cost In cases of a new NCD or legislative change in benefits, CMS determines, consistent with  422.109(b), whether the benefit or service is a significant cost to MA plans. As in the December 2022 proposed rule, CMS is including this discussion to make clear that significant cost requirements apply to all new NCDs, that is, that the significant cost assessment includes NCDs with CED. The thresholds for significant cost are specified in  422.109(a)(1) and (a)(2). The assessment generally applies to each NCD or legislative change in benefits that occurs after the rate announcement for a contract year such that the change in costs was not incorporated into the capitation rates for the contract year. Costs are estimated for a particular NCD or legislative change in benefits so the thresholds specified in  422.109(a)(1) and (a)(2) apply to each NCD or legislative change in benefits rather than to the aggregate number of such changes over the course of a contract year. Comment: A commenter stated it did not believe regulations beyond those proposed were necessary for NCDCED policies and that it believes that the agency is taking appropriate steps to ensure that NCDCEDs generate meaningful clinical data. Response: We thank the commenter for its input on this proposal. Comment: A commenter was concerned that with respect to NCD VerDate Sep<11>2014 21:20 Apr 11, 2023 Jkt 259001 PO 00000 Frm 00140 Fmt 4701 Sfmt 4700 E:\FR\FM\12APR2.SGM 12APR2ddrumheller on DSK120RN23PROD with RULES222259 Federal Register / Vol. 88, No. 70 / Wednesday, April 12, 2023 / Rules and Regulations CEDs, our proposal would shift costs from Medicare Advantage to Traditional Medicare. The commenter was also concerned that the NCDCED proposal could permit obstacles to emerging care for especially patients with rare diseases because of utilization management policies permitted under the Medicare Advantage program. Response: Currently, Traditional Medicare covers clinical trials under 310.1 for MA enrollees while MA plans are responsible for covering NCDCED and AB IDE trials. Because MAOs already cover NCDCEDs there will be no cost-shifting from the Medicare Advantage program to Traditional Medicare. As with any benefit for which it is responsible, an MA plan may require utilization management, including prior authorization, subject to the requirements in Part C of the Medicare statute and MA regulations in 42 CFR part 422. We direct readers to section III.E., Utilization Management Requirements: Clarifications of Coverage Criteria for Basic Benefits and use of Prior Authorization, Additional Continuity of Care Requirements, and Review of Utilization Management Tools for new requirements related to prior authorization and other utilization management policies being finalized in this rule. After considering the comments revised and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing this provision without modification. L. Update of Terminology to Individuals With Intellectual Disabilities ( 423.154) We proposed a terminology update at  423.154(c) to the outdated term mentally retarded. We inadvertently neglected to update this terminology in our regulations following two previous terminology updates found in the Medicare and Medicaid Program; Regulatory Provisions to Promote Program Efficiency, Transparency, and Burden Reduction final rule which appeared in the Federal Register on May 16, 2012 (77 FR 29001) and the Medicare Program; Contract Year 2016 Policy and Technical Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Programs final rule which appeared in the Federal Register on February 12, 2015 (80 FR 7911). Consequently, we proposed to update the current language at  423.154(c) (that is, update it to use the term individuals with intellectual disabilities). We solicited comments on this proposal. Comment: A commenter indicated their support for the transition to the term intellectual disabilities. They stated that CMS should prioritize the use of compassionate language when engaging with patient populations and noted that the intent of the proposed rule is consistent with CMS updates that have taken place over the last decade. Response: CMS agrees that the language currently used at  423.154(c) is outdated and inappropriate. The terminology update will improve the consistency of language used in regulations while following the intent and spirit of Rosas Law (Pub. L. 111 256). We are therefore finalizing the proposed update to  423.154(c) without modification. M. Technical Correction To Restore the Substantial Difference Requirement ( 423.265) We proposed to make a technical correction to  423.265(b)(2) to restore language on requirements for substantial differences between Medicare Part D sponsors bids that was inadvertently removed in a recent revision of the section. In the Medicare Program; Contract Year 2019 Policy and Technical Changes to the Medicare Advantage, Medicare Cost Plan, Medicare Fee-for- Service, the Medicare Prescription Drug Benefit Programs, and the PACE Program final rule, which appeared in the Federal Register on April 16, 2018 (hereinafter referred to as the April 2018 final rule, 73 FR 16440), we reorganized paragraph (b)(2) to incorporate a general rule in paragraph (b)(2)(i) and an exception in paragraph (b)(2)(ii), the latter of which excluded enhanced alternative plan bid submissions from the substantial difference requirement. We added language placing limits on the number of Part D plan offerings as part of the final rule titled Medicare and Medicaid Programs; Contract Year 2022 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicaid Program, Medicare Cost Plan Program, and Programs of All- Inclusive Care for the Elderly which appeared in the Federal Register on January 19, 2021 (hereinafter referred to as the January 2021 final rule, 86 FR 5864). However, the new language was incorrectly added to  423.265(b)(2) rather than  423.256(b)(3), and the previous regulatory text on substantial differences was inadvertently overwritten. To correct this inadvertent deletion, we proposed to: Redesignate the regulatory text from our January 2021 final rule limiting the number of bids a Part D plan sponsor may submit currently at  423.265(b)(2) as  423.265(b)(3); Restore the language from our April 2018 final rule on substantial differences at  423.265(b)(2)(i) and (ii); and Redesignate the regulatory text currently at  423.265(b)(3) as paragraph (b)(4). As described previously, all of the regulatory language that we proposed to restore at  423.265(b)(2) has previously undergone the full notice and comment process. This proposal would merely correct a technical error made by the January 2021 final rule. We received no comments on the proposed technical correction to  423.265(b)(2) and are finalizing our proposal without modification. N. Gross Covered Prescription Drug Costs ( 423.308) Section 1860D15(b)(3) of the Act defines gross covered prescription drug costs as, with respect to a part D eligible individual enrolled in a prescription drug plan or MAPD plan during a coverage year, the costs incurred under the plan, not including administrative costs, but including costs directly related to the dispensing of covered part D drugs during the year and costs relating to the deductible. Such costs shall be determined whether they are paid by the individual or under the plan, regardless of whether the coverage under the plan exceeds basic prescription drug coverage. In our final rule, Medicare Program; Medicare Prescription Drug Benefit, which appeared in the Federal Register on January 28, 2005 (70 FR 4194), we codified the definition of gross covered prescription drug costs at  423.308. This regulatory definition refers to gross covered prescription drug costs as actually paid costs. The term actually paid has a specific meaning in Medicare Part D and is separately defined at  423.308 to mean costs actually incurred by the plan that are net of direct and indirect remuneration (DIR), including discounts, rebates, or other price concessions typically received and applied after the point of sale (POS). However, unlike the statutory definitions of allowable reinsurance costs and allowable risk corridor costs at sections 1860D 15(b)(2) and 1860D15(e)(1)(B) of the Act, respectively, the statutory definition of gross covered prescription drug costs at section 1860D15(b)(3) of the Act does not use the phrase actually paid or otherwise specify that such costs must be net of all DIR. As we explained in the December 2022 proposed rule (87 FR 79611), because VerDate Sep<11>2014 21:20 Apr 11, 2023 Jkt 259001 PO 00000 Frm 00141 Fmt 4701 Sfmt 4700 E:\FR\FM\12APR2.SGM 12APR2ddrumheller on DSK120RN23PROD with RULES222260 Federal Register / Vol. 88, No. 70 / Wednesday, April 12, 2023 / Rules and Regulations 135We noted that this logic is borne out in the portion of our current regulatory definition of GCPDC at  423.308 that states that GCPDC reflect actual costs. Actual cost is defined at  423.100 as the negotiated price for a covered Part D drug when the drug is purchased at a network pharmacy, and the usual and customary price when a beneficiary purchases the drug at an out-of-network pharmacy. 136The different components of the negotiated price of a drug, and ultimately of GCPDC, are required to be reported separately using the following cost fields on the Prescription Drug Event (PDE) record submitted to CMS by Part D plan sponsors for payment purposes, the sum of which must equal GCPDC: Ingredient Cost, Dispensing Fee, Vaccination Administration, and Sales Tax. GCPDC are also required to be reported using the following two payment fields on the PDE record depending on whether the costs fall in the catastrophic phase: Gross Drug Cost Below the Out of Pocket (OOP) Threshold (GDCB) and Gross Drug Cost Above the OOP Threshold (GDCA). The amounts reported in these fields are then used to update the Total Gross Covered Drug Cost (TGCDC) Accumulator on the PDE record, which tracks and indicates which non-catastrophic phase of the Part D benefit the beneficiary is in. See, for example, 2006 Prescription Drug Event Data Training Participant Guide, available at https://www.csscoperations.com/internet/csscw3_ a.nsf/ DIDC/K3V5B8PN1HPrescription%20Drug%20Program%20(Part%20D)Training, and 2011 Regional Prescription Drug Event Data Technical Assistance Participant Guide, available at https://www.csscoperations.com/internet/ csscw3.nsf/DIDC/FJUKANFCP1Prescription%20Drug%20Program%20(Part%20D)Training. the definition of gross covered prescription drug costs was codified in regulation for the sole purpose of describing the methodology for calculating the reinsurance payment amount, in using the phrase actually paid in the regulatory definition of gross covered prescription drug costs, CMS was incorporating a requirement from the statutory definition of allowable reinsurance costs to emphasize that DIR would be netted out in the calculation of costs eligible for Part D reinsurance. In light of certain provisions added to the Social Security Act by the Inflation Reduction Act of 2022 (IRA) that refer to gross covered prescription drug costs as defined in section 1860D 15(b)(3) [of the Act] (see sections 1191(c)(5) and 1860D14C(g)(4)(D) of the Act), we revisited the regulatory definition of gross covered prescription drug costs. We proposed to revise the regulatory definition of gross covered prescription drug costs to mirror the language in the statutory definition and to remove any ambiguity that might arise from the current regulatory definition as it may now also be applicable outside of the reinsurance context. Specifically, we proposed to amend the definition of gross covered prescription drug