2023-07115.pdf

policies. Our proposals interpreted and implemented the requirements in section 1852 of the Act regarding the provision and coverage of services by MA plans and were, therefore, proposed under our authority in section 1856 of the Act to adopt standards to carry out the Part C statute and MA program. As originally stated in the June 2000 final rule (65 FR 40207), MA organizations must cover all Part A and B benefits, excluding hospice services and the cost of kidney acquisitions for transplant, on the same conditions that items and services are furnished in Traditional Medicare. This means that MA organizations may not limit coverage through the adoption of policies and procedureswhether those policies and procedures are called utilization management and prior authorization or the standards and criteria that the MA organization uses to assess and evaluate medical necessity when those policies and procedures result in denials of coverage or payment where the Traditional Medicare program would cover and pay for the item or service furnished to the beneficiary. In addition, this means that limits or conditions on payment and coverage in the Traditional Medicare program such as who may deliver a service and in what setting a service may be provided, the criteria adopted in relevant NCDs and LCDs, and other substantive conditionsapply to set the scope of basic benefits as defined in  422.100(c). MA organizations have flexibility to furnish and cover services without meeting all substantive conditions of coverage in Traditional Medicare, but that flexibility is limited to and in the form of supplemental benefits. As stated in the June 2000 final rule, MA organizations flexibility to deliver care using cost-effective approaches should not be construed to mean that Medicare coverage policies do not apply to the MA program. 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 is, basic benefits) component of an MA plan. MA organizations may cover the same service when the conditions are not met, but these benefits would then be defined as supplemental benefits within the scope of  422.100(c)(2) and 422.102 and must be included in the supplemental benefits portion of the MA plans bid. For example, when services are furnished by a type of provider other than the type of provider who may furnish the service in Traditional Medicare, those services are supplemental benefits. We proposed policies that provide less flexibility for MA organizations to deny or limit coverage of basic benefits than provided in the 2000 final rule. However, as provided by section 1852(a)(3) of the Act and reflected in  422.100(c)(2) and 422.102, MA plans may cover benefits beyond what is covered (and when it is covered) under Traditional Medicare by offering supplemental benefits. Our proposal was primarily directed at ensuring that minimum coverage requirements are met and that MA plans do not deny or limit coverage of basic benefits; we were not proposing to limit the scope of permissible supplemental benefits, but our proposal applies certain requirements for the use of utilization management for all covered benefits as discussed in section III.E. of this proposed rule. In this rule, we clarify acceptable cost-effective utilization management approaches for MA organizations to use in the context of the new proposed requirements. These clarifications aim to ensure access to medically necessary care, while maintaining MA organizations ability to apply utilization management that ensures clinically appropriate care. Additionally, we are codifying substantive rules regarding clinical coverage criteria for basic benefits and how they interact with utilization management policies, including revisions to existing regulations and adopting new regulations to ensure that MA enrollees receive the basic benefits coverage to which they are entitled and to ensure appropriate treatment of a benefit as a basic benefit or supplemental benefit for purposes of the bid under  422.254. We solicited comment on whether our proposed regulatory provisions sufficiently address the requirements and limits that we described in the preamble. The final rules adopted here related to utilization management requirements and limitations, coverage criteria and medical necessity determinations, use of prior authorization and continuity of care requirements for MA plans are additional standards to implement the statutory requirements at section 1852(a) of the Act that MA plans provide to their enrollees (by furnishing directly or through contracted providers, arranging for, or paying for) basic benefits (that is, all Part A and Part B benefits with limited exceptions) and such supplemental benefits the MA plan elects to offer. CMS has authority to adopt standards to carry out the applicable MA provisions in Title XVIII of the Act and to add new contract terms that we find necessary, appropriate, and not inconsistent with the statute in sections 1856(b) and 1857(e) of the Act. In addition, section 1854(a)(5) and (6) of the Act provide that CMS is not obligated to accept every bid submitted and may negotiate with MA organizations regarding the VerDate Sep<11>2014 21:20 Apr 11, 2023 Jkt 259001 PO 00000 Frm 00068 Fmt 4701 Sfmt 4700 E:\FR\FM\12APR2.SGM 12APR2ddrumheller on DSK120RN23PROD with RULES222187 Federal Register / Vol. 88, No. 70 / Wednesday, April 12, 2023 / Rules and Regulations bid, including benefits. To the extent that these new minimum standards for MA organizations and how they cover benefits would not implement section 1852 of the Act, establish standards to carry out the MA program under section 1856(b) of the Act (which CMS does not concede, as these are important protections to ensure that MA enrollees receive Medicare covered services), or be contract terms that we are authorized to adopt under section 1857(e)(1) of the Act, we believe that our negotiation authority in section 1854(a)(6)(B) of the Act permits creation of minimum coverage requirements. While the rules finalized here do not limit our negotiation authority (which is addressed in  422.256), they provide minimum standards for an acceptable benefit design for CMS to apply in reviewing and evaluating bids, in addition to establishing important protections to ensure that enrollees have access to medically necessary items and services that are covered under Part A and Part B. 2. Coverage Criteria for Basic Benefits a. Application of Coverage Criteria In interpreting requirements involving coverage criteria, whether used for prior authorization or post-service payment, CMS has a longstanding policy, discussed in sub-regulatory guidance (section 10.16 of Chapter 4 of MMCM), that MA plans must make medical necessity determinations based on internal policies that include coverage criteria that are no more restrictive than Traditional Medicares national and local coverage policies and approved by a plans medical director. In light of the previously discussed feedback and the OIG recommendation that we issue new guidance on the appropriate use of MA organization clinical criteria in medical necessity reviews, we proposed to codify standards for coverage criteria to ensure that basic benefits coverage for MA enrollees is no more restrictive than Traditional Medicare. Section 1862 of the Act requires original Medicare benefits to be reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member. Thus, in order to meet the statutory requirements at section 1852(a)(1) of the Act, which requires MA plans to cover A and B services, MA plan coverage criteria must do the same. We also proposed to amend  422.101(b) and (c) to clarify the obligations and responsibilities for MA plans in covering basic benefits. Section 1852(a)(1) of the Act and CMS regulations at  422.101(a) and (b) require all MA organizations to provide coverage of, by furnishing, arranging for, or making payment for, all items and services that are covered by Part A and Part B of Medicare and that are available to beneficiaries residing in the plans service area. Section 422.101 requires MA organizations to comply with all NCDs; LCDs written by Medicare Administrative Contractors (MACs) with jurisdiction for Medicare claims in the MA organizations or plans service area; and coverage instructions and guidance in Medicare manuals, instructions and other guidance documents unless those materials are superseded by regulations in part 422. We proposed to amend  422.101(b)(2) by removing the reference to original Medicare manuals and instructions and clarify that MA organizations must comply with general coverage and benefit conditions included in Traditional Medicare laws, unless superseded by laws applicable to MA plans, when making coverage decisions. Our proposal was designed to prohibit MA organizations from limiting or denying coverage when the item or service would be covered under Traditional Medicare and to continue the existing policies that permit MA organizations to cover items and services more broadly than original Medicare by using supplemental benefits. In proposing this change to  422.101(b)(2), we reiterated that limits or conditions on payment and coverage in the Traditional Medicare program such as who may deliver a service and in what setting a service may be provided, the criteria adopted in relevant NCDs and LCDs, and other substantive conditionsapply to define the scope of basic benefits. By removing the reference to original Medicare manuals and instructions, we were not diminishing the content and value that these manuals and instructions provide in interpreting and defining the scope of Part A and Part B benefits. These manuals contain significant explanations and interpretations of Traditional Medicare laws governing Part A and Part B benefits, most of it longstanding, to provide instructions and procedures for day to day operations for those responsible for administering the Medicare program. Our goal to ensure that MA enrollees receive the same items and services as beneficiaries in the FFS program is accomplished when the same coverage policies and approaches are used. We expect that MA plans will consult the Medicare Benefit Policy Manual, Medicare Program Integrity Manual, and similar CMS guidance materials. We note that MA organizations must agree to comply with all applicable requirements, conditions, and general instructions under the terms of their contract with CMS under  422.504(a). The proposed revision to  422.101(b)(2) clarifies that statutes and regulations that set the scope of coverage in the Traditional Medicare program are applicable to MA organizations in setting the scope of basic benefits that must be covered by MA plans. We also proposed to refer in  422.101(b)(2) to specific Medicare regulations that include coverage criteria for Part A inpatient admissions, Skilled Nursing Facility (SNF) care, Home Health Services and Inpatient Rehabilitation Facilities (IRF) as examples of general coverage and benefit conditions in Traditional Medicare that apply to basic benefits in the MA program. The list of Medicare regulations referred to is not exhaustive and provides examples of substantive coverage and benefit conditions that apply to MA. In addition, we also proposed to revise the current provision that states that Traditional Medicare coverage rules apply unless superseded by regulations in this part. We proposed to revise that aspect of  422.101(b)(2) to refer to laws applicable to MA plans in order to avoid implying that a Part 422 regulation could supersede an applicable statute. For example, the existing rule at  422.101(c), which states that MA organizations may elect to furnish, as part of their Medicare covered benefits, coverage of post-hospital SNF care in the absence of the prior qualifying hospital stay is a special rule in MA that deviates from coverage criteria articulated in Traditional Medicare. The regulation is based on section 1812(f) of the Act, which authorizes CMS to permit coverage of SNF care without the 3-day qualifying hospital stay in limited circumstances. (68 FR 5084750848). This rule provides MA organizations the flexibility to cover, as a basic benefit, SNF stays for MA enrollees that would not be otherwise coverable in Traditional Medicare, if the beneficiary had not met the prior qualifying hospital stay of 3 days prior to admission in the SNF. This special rule continues to apply in the MA program; however, we proposed to redesignate this rule to paragraph (c)(2) of  422.101 as part of our proposal to add a heading to  422.101(c) and to expand the scope of the paragraph. We proposed to add the heading Medical Necessity Determinations and Special Coverage Provisions to  422.101(c). As such, we proposed to reassign the special rule for coverage of posthospital SNF in the absence of the prior qualifying hospital VerDate Sep<11>2014 21:20 Apr 11, 2023 Jkt 259001 PO 00000 Frm 00069 Fmt 4701 Sfmt 4700 E:\FR\FM\12APR2.SGM 12APR2ddrumheller on DSK120RN23PROD with RULES222188 Federal Register / Vol. 88, No. 70 / Wednesday, April 12, 2023 / Rules and Regulations 97https://www.fda.gov/media/78504/download. 98https://www.ncbi.nlm.nih.gov/pmc/articles/ PMC3278192/. stay as  422.101(c)(2). The proposed new heading for  422.101(c), Medical Necessity Determinations and Special Provisions, is intended to signal that paragraph (c) will address medical necessity criteria and special rules that apply to MA basic benefits that do not necessarily conform to coverage rules in Traditional Medicare. We proposed to codify at  422.101(c)(1)(A) that MA organizations must make medical necessity determinations based on coverage and benefit criteria as specified at  422.101(b) and (c) and may not deny coverage for basic benefits based on coverage criteria that are not specified in  422.101(b) or (c). This means that when an MA organization is making a coverage determination on a Medicare covered item or service with fully established coverage criteria, the MA organization cannot deny coverage of the item or service on the basis of internal, proprietary, or external clinical criteria that are not found in Traditional Medicare coverage policies. Under this proposal, certain utilization management processes, such as clinical treatment guidelines that require another item or service be furnished prior to receiving the requested item or service, would violate the proposed requirements at  422.101(b) and (c), and thus, their use by an MA organization would be prohibited unless specified within the applicable NCD or LCD or Medicare statute or regulation. We note that we did not propose