2023-07115.pdf

their support of our proposal to add corresponding exceptional condition SEPs for MA and Part D enrollment to align with the new Medicare premium Part A and B exceptional condition SEPs. Comment: One commenter expressed that, under the new requirements, a Part D plan would not know the date the applicant submitted their application to the SSA. Accordingly, they requested CMS to clarify how the start of the SEP factors into a plan processing an enrollment request using the SEP. Response: Per current practice, the MA or Part D plan would need to confirm that the individual had enrolled in premium Part A and/or Part B, as applicable, prior to the individuals MA or Part D enrollment effective date. The SSA will have to first process the individuals premium Part A and/or Part B application and submit that information into SSA systems, which, in turn, would be populated in the CMS enrollment systems, for an MA or Part D plan to have access to that enrollment information. For MA enrollment, the SEP begins when the individual, using an exceptional condition SEP, submits their application for ++ PremiumPart A and Part B; or ++ Part B only, if the individual is already entitled to Part A, (or enrolls in premium-free Part A within the timeframe for use of this SEP). For Part D enrollment, the SEP begins when the individual, using an exceptional condition SEP, submits their premiumPart A or Part B application. We note that the timeframe for use of both of these SEPs extends two months beyond the premiumPart A and/or Part B entitlement date, which will be visible to plans. Comment: A commenter stated that, although they support CMS policy intent with this proposal, with increased prescription coverage for beneficiaries, this will likely exacerbate current reimbursement challenges at the pharmacy counterwhere pharmacies are being paid below costs for many of the prescriptions they purchase and dispense. Another commenter suggested VerDate Sep<11>2014 21:20 Apr 11, 2023 Jkt 259001 PO 00000 Frm 00018 Fmt 4701 Sfmt 4700 E:\FR\FM\12APR2.SGM 12APR2ddrumheller on DSK120RN23PROD with RULES222137 Federal Register / Vol. 88, No. 70 / Wednesday, April 12, 2023 / Rules and Regulations that CMS consider creating an SEP that would allow cancer patients to switch back to Original Medicare, in the case where a patient in an MA plan receives a cancer diagnosis and is unable to access needed treatment in a timely manner. The commenter also recommended that CMS create an ongoing open enrollment window for patients diagnosed with cancer, which would automatically provide the benefits of having comprehensive in- network care. Response: We thank the commenters for their feedback; however, we proposed to add corresponding exceptional condition SEPs for MA and Part D enrollment to align with the new Medicare premium-Part A and B exceptional condition SEPs that CMS has finalized, and these comments are outside of the scope of this rulemaking. After considering the comments we received and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing, the MA SEP at  422.62(b)(26) with a minor edit to the regulation text to clarify that this SEP applies to an individual submitting an application for Part B only if they are already entitled to Part A, or are enrolling in premium-free Part A within the timeframe of this SEP. We are finalizing the Part D enrollment SEP at 423.38(c)(34) as proposed without modification. D. Transitional Coverage and Retroactive Medicare Part D Coverage for Certain Low-Income Beneficiaries Through the Limited Income Newly Eligible Transition (LI NET) Program ( 423.2500 Through 423.2536) 1. Background on the LI NET Demonstration and Introduction to the Proposals a. Background on the LI NET Demonstration The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) established the Medicare Part D prescription drug benefit, which became effective on January 1, 2006. Prior to 2006, beneficiaries who were eligible for both Medicaid and Medicare (dually eligible) received prescription drug benefits through Medicaid. When the MMA went into effect, dually eligible beneficiaries began receiving their prescription drug benefits through Medicare Part D. From the beginning of Part D, CMS recognized the need to provide both immediate and retroactive coverage for full-benefit dually eligible (FBDE) beneficiaries who were newly identified by either CMS or a State. Prior to 2010, CMS automatically enrolled newly identified beneficiaries eligible for the Part D low-income subsidy (LIS) into a Part D plan with a premium at or below the low-income benchmark (benchmark plans), which have no or reduced premiums for LIS-eligible beneficiaries. Each benchmark plan receiving these beneficiaries was required to grant retroactive coverage to the beginning of a beneficiarys LIS- eligible status or their last uncovered month, whichever date was later. At the time, there were around 300 Part D benchmark plans, and each needed to develop the capacity to provide transitional and retroactive coverage for these beneficiaries. Conducting retroactive claims adjudication and providing point-of-sale coverage was not efficient for Part D sponsors and accordingly, in 2010, CMS established the Medicare Part D Demonstration for Retroactive and Point of Sale Coverage for Certain Low-Income Beneficiaries, also known as Medicares Limited Income Newly Eligible Transition (LI NET) demonstration. The LI NET demonstration consolidates administration of transitional and retroactive Part D coverage for eligible beneficiaries to a single Part D sponsor. Part D coverage under the LI NET demonstration differs from coverage under traditional Part D plans in that the LI NET demonstration provides point-of-sale coverage for beneficiaries who demonstrate an immediate need for prescriptions, and also provides retroactive and/or temporary coverage for beneficiaries determined to be eligible, or likely to be eligible, for the Part D LIS by the Social Security Administration (SSA) or a State. The LI NET demonstration provides temporary, transitional Part D prescription drug coverage for LIS-eligible beneficiaries, including beneficiaries who are eligible for the Part D LIS but who are not yet enrolled in a Part D drug plan, or are enrolled in a plan but for whom coverage has not yet taken effect. The purposes of the demonstration are to provide the following: More efficient prescription drug coverage and claims reimbursement for newly eligible low-income beneficiaries, including periods of retroactive eligibility; More efficient prescription drug coverage and claims reimbursement for individuals who are not enrolled in a PDP and whose LIS status is not yet established in CMS systems, but who arrive at a pharmacy with an immediate need for their prescription. This may occur, for instance, when a State has determined that a beneficiary is eligible for Medicaid but that information does not yet appear in CMS systems; A seamless transition for LIS- eligible beneficiaries from LI NET into a qualifying PDP with basic prescription drug coverage absent a beneficiarys choice otherwise; and More efficient prescription drug coverage and claims reimbursement for LIS-eligible beneficiaries who are losing existing coverage in a PDP. For example, a beneficiary could be terminated for moving out of the service area of their current PDP. The beneficiary would be automatically enrolled into LI NET for that month and the following month, with enrollment into a qualifying PDP with basic prescription drug coverage that would become effective at the end of the LI NET enrollment absent the beneficiarys choice otherwise. b. Introduction to the Proposals To Implement LI NET as a Permanent Program Division CC, title I, subtitle B, section 118 of the Consolidated Appropriations Act, 2021 (CAA) (Pub. L. 116260) modified section 1860D14 of the Act by redesignating subsection (e) of section 1860D14 as subsection (f) and by establishing a new subsection (e) Limited Income Newly Eligible Transition Program. New subsection (e)(1) requires the Secretary to carry out a program to provide transitional coverage for covered Part D drugs for LI NET eligible individuals . . . no later than January 1, 2024. This directive in section 118 of the CAA makes LI NET a permanent program within Part D, beginning in 2024. The proposed rulemaking to establish the LI NET program is consistent with President Bidens Executive Order 13985 on Advancing Racial Equity and Support for Underserved Communities Through the Federal Government (January 20, 2021) and Executive Order 14085 on Transforming Federal Customer Experience and Service Delivery to Rebuild Trust in Government (December 13, 2021). LI NET ensures that low-income beneficiaries transitioning from Medicaid to Medicare do not experience a gap in coverage for their prescription medications. Executive Order 14085 calls for the Federal Government to design and deliver services with a focus on the actual experience of the people whom it is meant to serve and deliver services more equitably and effectively, especially for those who have been historically underserved. We have designed the LI NET program with beneficiary needs foremost in mind, ensuring continuous drug coverage and access for eligible low- income individuals. VerDate Sep<11>2014 21:20 Apr 11, 2023 Jkt 259001 PO 00000 Frm 00019 Fmt 4701 Sfmt 4700 E:\FR\FM\12APR2.SGM 12APR2ddrumheller on DSK120RN23PROD with RULES222138 Federal Register / Vol. 88, No. 70 / Wednesday, April 12, 2023 / Rules and Regulations 4Of the 80 percent of immediate need LI NET beneficiaries whose LIS status is ultimately confirmed, for 89 percent confirmation was within 10 days, and for 97 percent confirmation was within 21 days. In the demonstration, beneficiaries whose LIS status is not able to be confirmed within 21 days continue to be enrolled in LI NET for two months, but they can no longer fill prescriptions after 21 days. LI NET policies, infrastructure, and operations have evolved over the past 13 years to balance providing needed coverage with responsible stewardship of taxpayer dollars and efficiency in administering the program. The LI NET demonstration has proven successful in providing low-income individuals transitional Part D coverage. Approximately 8 million low-income individuals received the benefits of the LI NET program under the demonstration, with over 100,000 beneficiaries enrolled in LI NET in any given month. It has become a program that beneficiary advocacy groups rely on when supporting low-income individuals and connecting them with services. LI NET works directly with over a dozen advocacy groups and 51 State Health Insurance Assistance Programs (SHIPs), which collectively work with LIS beneficiaries to remove access barriers and provide health insurance counseling. We believe the LI NET demonstration is a reliable, stable program that has been successful in providing transitional and retroactive Part D coverage to millions of beneficiaries. In developing our proposals for implementing the permanent LI NET program, we took into consideration our experience under the LI NET demonstration. Where appropriate, we discuss the policies and practices under the LI NET demonstration that informed our proposals for how to implement aspects of the LI NET program that are not directly specified by the statute. We rely on the premise that Part D regulations apply to the LI NET program and to the LI NET sponsor as part of the Part D program and as a type of Part D sponsor, except for when the statute requires us to deviate or when existing regulations would not apply. For example, as discussed further in this final rule, because the LI NET sponsor is required to have an open formulary, existing Part D requirements on formulary development would not be applicable. Our proposals to make LI NET a permanent program started with  423.2500. In  423.2500(a), we proposed the LI NET program would be based on section 1860D14 of the Act. We proposed in  423.2500(b) the scope of the LI NET program, which would begin no later than January 1, 2024. Under this program, eligible individuals would be provided transitional coverage for Part D drugs. Section  423.2504 sets forth the LI NET eligibility and enrollment proposals and  423.2508 proposed LI NET benefits and beneficiary protections. Next, we proposed in  423.2512 the requirements to be an LI NET sponsor and  423.2516 proposed how the Part D sponsor administering LI NET in partnership with CMS would be selected and the requirements set forth in the LI NET contract to provide services and coverage. In  423.2518, we included a proposal for intermediate sanctions in the event of contract violations. In  423.2520, we proposed how an LI NET contract would be non- renewed or terminated. In  423.2524, we included our proposals for bidding and determining the LI NET payment rate. Finally,  423.2536 enumerated the Part D requirements we proposed waiving for LI NET. We proposed to align sunsetting the demonstration seamlessly with the start of the LI NET program under this section. Specifically, the LI NET demonstration will continue to operate until December 31, 2023, and the LI NET program would start to operate on January 1, 2024 according to the regulations that we finalize. 2. Eligibility and Enrollment a. Eligibility Section 1860D14(e)(2) of the Act provides that an individual is eligible for LI NET coverage if they: (A) meet the requirements of section 1860D 14(a)(3)(A)(ii) and (iii) of the Act; and (B) have not yet enrolled in a prescription drug plan or an MAPD plan, or, who have so enrolled, but with respect to whom coverage under such plan has not yet taken effect. This means that to be eligible, the individual would need to be a full-benefit dual- eligible individual or low-income subsidy (LIS) eligible individual as defined at  423.773 and Not yet be enrolled in a prescription drug plan or an MAPD plan; or Be enrolled but their coverage has not yet