2023-07115.pdf

plan segment level. The segments in those three plans collectively have approximately 3,000 enrollees. While the number of non-SNP MA plans at the segment level is currently small, this number could grow in the future and provide an opportunity for MA organizations to circumvent the DSNP look-alike contracting limitations at  422.514(d). We proposed adding a new paragraph at 42 CFR 422.514(g) to provide that  422.514(d) through (f) apply to segments of the MA plan in the same way that those provisions apply to MA plans. Under the proposal, CMS would not contract with or renew a contract with a plan segment where the MA plan or segment is not a DSNP and the enrollment thresholds in paragraph (d)(1) or (d)(2) are met. This proposal, to treat a segment of an MA plan as an MA plan, is consistent with CMS annual review of MA plan bids and Medicare cost-sharing, in which each MA plan segment submits a separate bid pricing tool and plan benefit package (PBP) like an unsegmented MA plan and CMS separately evaluates these submissions for compliance with MA requirements. As discussed in the June 2020 final rule, CMS implements the contracting prohibition in  422.514 at the plan level. Where an MA plan is one of several offered under a single MA contract and the MA organization does not voluntarily non-renew the DSNP look-alike, CMS will sever the DSNP look-alike from the overall contract using its authority under  422.503(e) to sever a specific MA plan from a contract and terminate the deemed contract for the look-alike plan (85 FR 33812). However, CMS does not currently have clear regulatory authority to sever a segment from an MA plan to terminate a contract that has only a segment of an MA plan. CMS adopted the severability regulation at  422.503(e) in the Medicare Program; Establishment of the Medicare+Choice Program interim final rule (63 FR 35103, hereafter known as the June 1998 interim final rule) as part of implementing the statutory authority for MA contracts to cover more than one MA plan. Without amending  422.503(e), CMS would need to sever the entire MA plan that has the DSNP look-alike segment. As a result, the other segments in that MA plan would be subject to the contracting prohibition and not renewed under  422.514(d) as proposed to be amended. Instead, we proposed to amend  422.503(e) to allow for CMS to sever a segment from an MA plan and allow the remaining segments of that MA plan to continue along with any other MA plans offered under the same contract. We proposed to rely on our authority to adopt MA standards under section 1856(b)(1) of the Act and our authority to adopt additional contract terms when necessary and appropriate, and not inconsistent with the MA statute, under section 1857(e)(1) of the Act. Our primary impetus for this proposal relates to DSNP look-alikes, but our proposal at  422.503(e) is not specific to DSNP look-alikes; because each segment of an MA plan is like a plan itself, we believe severability should apply similarly at the plan and segment level. We also proposed to amend  422.504(a)(19) to adopt a new contract term that MA organizations agree not to segment an MA plan in a way that results in a DSNP look-alike. In conjunction with the proposed amendments to  422.514(g) to apply the prohibitions on contracting with DSNP look-alikes to segments of an MA plan, the amendments to  422.503(e) would allow CMS to eliminate existing DSNP look-alike segments and the amendments to  422.504(a)(19) would allow CMS to prevent new DSNP look- alikes. 2. Applying Contracting Limitations for DSNP Look-Alikes to Existing MA Plans We identified a second loophole during our analysis of contract year 2023 MA plan bids to identify any new MA plans that meet the contract limitation at  422.514(d)(1). An existing (that is, renewing) MA plan that did not meet the criteria in  422.514(d)(2) (using January 2022 MMR data as provided in paragraph (e)(3)) projected in its contract year 2023 bid that the MA plan would have 80 percent or higher enrollment of dually eligible individuals in 2023. Because this MA plan is not a new MA plan for contract year 2023, the contract prohibition in  422.514(d)(1) did not apply. To prevent similar situations in the future, we proposed to amend  422.514(d)(1) to apply it to both new and existing (that is, renewing) MA plans that are not D SNPs and submit bids with projected enrollment of 80 percent or more enrollees of the plans total enrollment that are dually eligible for Medicare and Medicaid. We proposed to revise paragraph (d)(1) to provide that CMS does not enter into or renew an MA contract for plan year 2024 and subsequent years when the criteria in paragraphs (d)(1)(i) and (ii) are met. We proposed to begin this prohibition with 2024 because we expect that 2024 will be the first plan year after the final rule adopting this proposal. Pending finalization of this proposal,  422.514(d)(1) will continue to prohibit contracts with new MA plans that meet the criteria. We noted in the proposed rule at 87 FR 79466 that the earliest our proposed revision to expand the scope of  422.514(d)(1) could apply is 2024. VerDate Sep<11>2014 21:20 Apr 11, 2023 Jkt 259001 PO 00000 Frm 00012 Fmt 4701 Sfmt 4700 E:\FR\FM\12APR2.SGM 12APR2ddrumheller on DSK120RN23PROD with RULES222131 Federal Register / Vol. 88, No. 70 / Wednesday, April 12, 2023 / Rules and Regulations 2Available at https://www.cms.gov/Medicare/ Health-Plans/MedicareAdvtgSpecRateStats/ Announcements-and-Documents. 3. Contract Limitations for DSNP Look- Alikes as a Basis for MA Contract Termination ( 422.510(a)(4)) Finally, we proposed an amendment to  422.510(a)(4), which outlined the bases for termination of an MA contract. Specifically, we proposed to add language at  422.510(a)(4) to add a new paragraph (a)(4)(xvi) that permits CMS to terminate an MA contract when the MA organization meets the criteria in  422.514(d)(1) or (d)(2). This proposed amendment is consistent with how  422.514(d) provides that CMS will not enter into or renew an MA contract in certain circumstances. In our view,  422.514(d) is sufficient authority for the non-renewal, that is termination, of MA contracts when  422.514(d) applies. However, we believe that adopting a specific provision in  422.510(a)(4) will avoid any inadvertent ambiguity on this topic and make it clear that the procedures outlined in  422.510, including notices, timeframes, and appeal rights, apply when CMS does not renew an MA contract based on application of  422.514(d). We received the following comments, and our responses follow. Comment: Numerous commenters, including MACPAC and MedPAC, supported the CMS proposals overall to apply contracting limitations for DSNP look-alikes to existing MA plans and MA plan segments. A few commenters specifically noted support for applying the contracting limitations to MA plan segments. A commenter stated that, despite concerns the commenter had raised in the past, the CMS proposal was a logical extension of existing policy and would allow remaining segments of the plan and other plans under the same contract to continue. Another commenter emphasized that MA plan segments are treated comparably to separate plans in a number of ways (for example, segments can have different benefit designs and cost-sharing; bids are submitted at the segment level; and where appropriate, compliance with MA requirements is determined at the segment level). Another commenter specifically emphasized its support to apply the D SNP contract limitations to existing MA plans and to clarify CMS authority to terminate an MA contract based on the application of DSNP look-alike requirements. Some of these commenters emphasized their overall support for CMS proposals and general approach to limiting DSNP look-alikes, noting that DSNP look-alikes detract from plans that integrate Medicare and Medicaid benefits. MACPAC stated that it views DSNP look-alikes as acting at cross purposes to State and Federal efforts to integrate care by drawing dually eligible individuals away from integrated products and avoiding the additional requirements for DSNPs. MedPAC indicated that DSNP look-alikes undermine efforts to develop integrated plans for dually eligible individuals by encouraging them to enroll instead in plans that provide many of the same extra benefits as DSNPs but do nothing to integrate Medicaid coverage. A commenter stated that dually eligible individuals are better served in integrated plans, and thus, in areas with highly integrated dual eligible special needs plans (HIDE SNPs) or fully integrated dual eligible special needs plans (FIDE SNPs), they should have a choice among these available integrated modalities rather than DSNP look- alikes. A commenter supported CMS proposals as an important step to advance Medicare-Medicaid integration. A few commenters supported the proposals noting that DSNP look-alikes create unnecessary competition for integrated products without meeting any requirements to work with States to integrate or coordinate Medicaid services, have specific models of care approved by the National Committee on Quality Assurance, or incorporate additional SNP quality measures designed for complex needs populations. Several commenters supported CMS efforts to close unforeseen loopholes that have allowed DSNP look-alikes to persist. A commenter appreciated CMS efforts, citing the integrity of DSNPs is critical since their membership consists of people with disabilities of all ages. Response: We appreciate the widespread support we received for the proposed amendments and agree with the commenters concerns about DSNP look-alikes. Many of these concerns mirror the discussion in the 2020 Final Call Letter,2February 2020 proposed rule (85 FR 9018 through 9021), and June 2020 final rule (85 FR 33805 through 33808). We believe the amendments that we are finalizing in this rule will enable us to more effectively implement Medicare- Medicaid integration requirements under the BBA of 2018 along with other State and Federal requirements. Comment: Some commenters recommended that CMS take action beyond implementing the proposals to lower the threshold used to identify D SNP look-alikes. A few of these commenters suggested CMS reduce the threshold at  422.514(d) for declining to contract or renew contracts with D SNP look-alikes from 80 percent dually eligible enrollment to 50 percent, helping to mitigate the targeting of dually eligible individuals by non- integrated models. A commenter suggested lowering the threshold to at least 50 percent. Another commenter noted, while the 80 percent threshold is addressing the most obvious targeting of dually eligible individuals by non-SNP plans, it has allowed some non-SNP plans with enrollment of dually eligible individuals above 50 percent to continue to operate in markets where D SNPs are not offered. This commenter supported lowering the enrollment threshold over the coming years as long as it can be done in a way that minimizes disruption to the enrollees and based its support for a lower threshold on the success of implementing the 80 percent threshold. A commenter indicated the current 80 percent threshold can itself serve as a loophole, allowing plans to enroll high proportions of dually eligible individuals without being subject to D SNP look-alike requirements. This commenter encouraged CMS to consider a lower threshold to further promote integrated care and minimize enrollee confusion. MACPAC did not opine on whether or not CMS should change the enrollment threshold for identifying D SNP look-alikes but expressed concern that there could still be a real risk of growth in plans of this type falling below the 80 percent threshold and thus continuing to detract from Federal and State efforts to integrate care. Response: We appreciate these comments. The recommendations to reduce the enrollment threshold at  422.514(d) are outside of the scope of our proposed amendments. We continue to monitor the level of dually eligible enrollment among non-SNP MA plans and will consider these comments for future rulemaking. We note that the D SNP look-alike contracting limitations at  422.514(d) only apply in a State where there is a DSNP or any other plan authorized by CMS to exclusively enroll individuals entitled to Medicaid, which includes Medicare-Medicaid Plans. Comment: Some commenters suggested that CMS exclude or reconsider excluding partial-benefit dually eligible individuals when calculating the 80 percent threshold at  422.514(d). Several commenters recommended that we exclude partial- benefit dually eligible individuals from the 80 percent threshold calculation in States that limit DSNP enrollment to VerDate Sep<11>2014 21:20 Apr 11, 2023 Jkt 259001 PO 00000 Frm 00013 Fmt 4701 Sfmt 4700 E:\FR\FM\12APR2.SGM 12APR2ddrumheller on DSK120RN23PROD with RULES222132 Federal Register / Vol. 88, No. 70 / Wednesday, April 12, 2023 / Rules and Regulations full-benefit dually eligible individuals. A few of these commenters noted that including partial-benefit dually eligible individuals in the 80 percent threshold calculation