Centers for Medicare & Medicaid Services Revises Medicare Advantage and Prescription Drug Benefit Programs
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Medicare Program; Contract Year 2015 Policy and Technical Changes to the
A Rule by the
Publication Date:
Agencies:
Entry Type: Rule
Action: Final rule.
Document Citation: 79 FR 29843
Page: 29843 -29968 (126 pages)
CFR: 42 CFR 417
42 CFR 422
42 CFR 423
42 CFR 424
Agency/Docket Number: CMS-4159-F
RIN: 0938-AR37
Document Number: 2014-11734
Shorter URL: https://federalregister.gov/a/2014-11734
Action
Final Rule.
Summary
The final rule will revise the
DATES:
Effective Dates: These regulations are effective on
Applicability Dates: In the SUPPLEMENTARY INFORMATION section of this final rule, we provide a table (Table 1) which lists key changes in this final rule that have an applicability date other than the effective date of this final rule.
FOR FURTHER INFORMATION CONTACT:
SUPPLEMENTARY INFORMATION:
Table 1 lists key changes that have an applicability date other than 60 days after the date of publication of this final rule. The applicability dates are discussed in the preamble for each of these items.
Table 1--Applicability Date of Key Provisions Other Than 60 Days After the Date of Publication of the Final Rule
Preamble section .....Section title .....Applicability date
III.A.4 .....Reducing the Burden of the Compliance Program Training Requirements (sections 422.503(b)(4)(vi)(C) and section 423.504(b)(4)(vi)(C)) .....
III.A.7 .....Agent/Broker Compensation Requirements (sections 422.2274 and 423.2274) .....
III.A.20 .....Enrollment Requirements for the Prescribers of Part D Covered Drugs (section 423.120(c)(6)) .....
III.A.24 .....Eligibility of Enrollment for Incarcerated Individuals (sections 417.1, 417.460(b)(2)(i), 417.460(f)(1)(i)(A) through (C), 422.74(d)(4)(i)(A), 422.74(d)(4)(v), 423.44(d)(5)(iii) and (iv)) .....
I. Executive Summary
A. Purpose
The purpose of this final rule is to make revisions to the
B. Summary of the Major Provisions
1. Modifying the Agent/Broker Requirements, Specifically Agent/Broker Compensation
The former regulatory compensation structure was comprised of a 6-year cycle that ended
We received more than 140 comments from agents, health plans, and trade associations opposing the 35 percent renewal rate, and instead suggesting that CMS maintain the 50 percent renewal rate. A number of commenters expressed concerns that the proposed reduction in compensation would represent a significant decrease from the current compensation limit, and a rate set at 50 percent of FMV would be in line with industry standard. They noted that the higher compensation amount would be particularly important for stand-alone prescription drug plans, as 35 percent would be insufficient to cover an agent's costs associated with the renewal transaction and could discourage agents from assisting in the annual evaluation of a
2. Drug Categories or Classes of Clinical Concern
We are not finalizing any new criteria and will maintain the existing six protected classes.
3. Improving Payment Accuracy--Implementing Overpayment Provisions of Section 1128J(d) of the Social Security Act (sections 422.326 and 423.360)
These proposed regulatory provisions codify the Affordable Care Act requirement establishing section 1128J(d) of the Act that MA organizations and Part D sponsors report and return identified
We proposed to adopt the statutory definition of overpayment for both Part C and Part D, which means any funds that an MA organization or Part D sponsor has received or retained under Title XVIII of the Act to which the MA organization or Part D sponsor, after applicable reconciliation, is not entitled under such title. To reflect the unique structure of Part C and Part D payments to plan sponsors, we also propose to define two terms included in the statutory definition of overpayments: "funds" and "applicable reconciliation." We proposed to define funds as payments an MA organization or Part D sponsor has received that are based on data that these organizations submitted to CMS for payment purposes. For Part C we proposed that applicable reconciliation occurs on the annual final risk adjustment data submission deadline. For Part D, we proposed that applicable reconciliation occurs on the date that is the later of either the annual deadline for submitting prescription drug event (PDE) data for the annual Part D payment reconciliations referred to in section 423.343(c) and (d) or the annual deadline for submitting DIR data.
In addition, we proposed to state in regulation that an MA organization or Part D sponsor has identified an overpayment if it has actual knowledge of the existence of the overpayment or acts in reckless disregard or deliberate ignorance of the existence of the overpayment. An MA organization or Part D sponsor must report and return any identified overpayment it received no later than 60 days after the date on which it identified it received an overpayment. The MA organization or Part D sponsor must notify CMS, using a notification process determined by CMS, of the amount and reason for the overpayment. Finally, we proposed a look-back period with an exception for overpayments resulting from fraud, whereby MA organizations and Part D sponsors would be held accountable for reporting overpayments within the 6 most recent completed payment years for which the applicable reconciliation has been completed.
We received approximately 30 comments from organizations and individuals. Generally, commenters supported establishing separate applicable reconciliation dates for Part C and Part D. Many commenters questioned when the 60-day period for reporting and returning begins, and what activities constitute reporting and returning an overpayment to CMS, including questions about estimating an amount of overpayment. A number of commenters also requested to clarify the standards for "identifying" an overpayment, including questions about the meaning of reasonable diligence. Finally, a few commenters recommended that we impose the same limitation on the look-back period for all overpayments, even those relating to fraud.
We are finalizing the provisions at sections 422.326 and 423.360, with the following modifications. First, we add at the end of paragraph section 422.326(d) the phrase "unless otherwise directed by CMS for the purpose of section 422.311." Also, to increase clarity we revise sections 422.326(c) and 423.360(c) regarding identified overpayments. Finally, we strike the following sentence in the proposed paragraphs on the 6-year look-back period: "Overpayments resulting from fraud are not subject to this limitation of the lookback period."
4. Risk Adjustment Data Requirements
We proposed several amendments to section 422.310 to strengthen existing regulations related to the accuracy of risk adjustment data, including: (1) A requirement that medical record reviews, if used, be designed to determine the accuracy of diagnoses submitted under sections 422.308(c)(1) and 422.310(g)(2); (2) a revision in the deadlines for submission of risk adjustment data; and (3) a limitation on the type and purpose of late data submissions. We also proposed a restructuring of subparagraph (g)(2) as part of the revisions. We received approximately 25 comments from organizations and individuals regarding these proposals; many of the comments were concerned and critical of the proposals, highlighting vagueness and the potential for operational instability. For reasons discussed in more detail below in section III.B.2 of the preamble, we are not finalizing the proposed amendment regarding the scope of medical reviews and we are not finalizing at this time the proposal to change the date for final risk adjustment data submission. We are finalizing as proposed the restructuring of sections 422.310(g)(2) and the 422.310(g)(2)(ii) provision to prohibit submission of diagnoses for additional payment after the final risk adjustment data submission deadline.
C. Summary of Costs and Benefits
Table 2--Summary of Costs and Benefits
Provision description .....Total costs .....Transfers
Modifying the agent/broker requirements, specifically agent/broker compensation .....N/A .....N/A
Improving Payment Accuracy .....N/A .....N/A
Eligibility of Enrollment for Incarcerated Individuals ..........We estimate that this change could save the MA program up to
II. Background
A. General Overview and Regulatory History
The Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33) created a new "Part C" in the
Since the inception of both Parts C and D, we have periodically revised our regulations either to implement statutory directives or to incorporate knowledge obtained through experience with both programs. For instance, in the
In a final rule that appeared in the
In a final rule that appeared in the
B. Issuance of a Notice of Proposed Rulemaking
In the proposed rule titled "Contract Year 2015 Policy and Technical Changes to the
C. Public Comments Received in Response to the CY 2015 Policy and Technical Changes to the
We received approximately 7,600 timely pieces of correspondence containing multiple comments on the CY 2014 proposed rule. While we are finalizing several of the provisions from the proposed rule, there are a number of provisions from the proposed rule (for example, enrollment eligibility criteria for individuals not lawfully present in
D. Provisions Not Finalized in This Final Rule
As noted previously, some of the provisions of the proposed rule will be addressed later and, therefore, are not being finalized in this rule. Table 3 lists the provisions that were proposed but are not addressed at this time. We note that several provisions that were proposed are not being finalized in this rule and are effectively being withdrawn; those provisions are not listed in Table 3.
Table 3--Provisions Not Finalized at This Time
Proposed rule section .....Topic
Clarifying Various Program Participation Requirements .....
III.A.2 .....Two-year Limitation on Submitting a New Bid in an Area Where an MA has been Required to Terminate a Low-enrollment MA Plan (section 422.504(a)(19)).
III.A.6 .....Changes to
III.A.9 .....Collections of Premiums and Cost Sharing (section 423.294).
III.A.10 .....Enrollment Eligibility for Individuals Not Lawfully Present in
III.A.11 .....Part D Notice of Changes (section 423.128(g)).
III.A.12 .....Separating the Annual Notice of Change (ANOC) from the Evidence of Coverage (EOC) (section 422.111(a)(3) and section 423.128(a)(3)).
III.A.14 .....Exceptions to Drug Categories or Classes of Clinical Concern (section 423.120(b)(2)(vi)).
III.A.15 .....Medication Therapy Management Program (MTMP) under Part D (section 423.153(d)(1)(v)(A))--outreach strategies.
III.A.16 .....Business Continuity for MA Organizations and PDP Sponsors (section 422.504(o) and section 423.505(p)).
III.A.21 .....Efficient Dispensing in Long Term Care Facilities and Other Changes (section 423.154).
III.A.23 .....Medicare Coverage Gap Discount Program and Employer Group Waiver Plans (section 423.2325).
III.A.26 .....Payments to PDP Plan Sponsors For Qualified Prescription Drug Coverage (section 423.308) and Payments to Sponsors of Retiree Prescription Drug Plans (section 423.882).
III.A.32 .....Transfer of TrOOP Between PDP Sponsors Due to Enrollment Changes during the Coverage Year (section 423.464).
III.A.37 .....Expand Quality Improvement Program Regulations (section 422.152).
III.A.38 .....Authorization of Expansion of Automatic or Passive Enrollment Non-Renewing Dual Eligible SNPs (D-SNPs) to another D-SNP to Support Alignment Procedures (section 422.60). Improving Payment Accuracy .....
III.B.2 .....Determination of Payments (section 423.329).
III.B.3 .....Reopening (section 423.346).
III.B.4 .....Payment Appeals (section 423.350).
III.B.5 .....Payment Processes for Part D Sponsors (section 423.2320).
III.B.6 .....Risk adjustment data requirements--proposal regarding annual deadline for MAO submission of final risk adjustment data (section 422.310(g)(2)(ii)).
Strengthening Beneficiary Protections .....
III.C.1 .....Providing High Quality Health Care (section 422.504(a)(3) and section 423.505(b)(27)).
III.C.2 .....MA-PD Coordination Requirements for Drugs Covered Under Parts A, B, and D (section 422.112).
III.C.3 .....Good Cause Processes (section 417.460, section 422.74 and section 423.44).
III.C.4 .....Definition of Organization Determination (section 422.566).
III.C.5 .....MA Organizations May Extend Adjudication Timeframes for Organization Determinations and Reconsiderations (section 422.568, section 422.572, section 422.590, section 422.618, and section 422.619).
Strengthening Our Ability to Distinguish Stronger Applicants for Part C and D Program Participation and to Remove Consistently Poor Performers .....
III.D.1 .....Two-Year Prohibition When Organizations Terminate Their Contracts (sections 422.502, 422.503, 422.506, 422.508, and 422.512).
III.D.2 .....Withdrawal of Stand-Alone Prescription Drug Plan Bid Prior to Contract Execution (section 423.503).
III.D.3 .....Essential Operations Test Requirement for Part D (sections 423.503(a) and (c), 423.504(b)(10), 423.505(b)(28), and 423.509).
III.D.4. .....Termination of the Contracts of
Organizations Offering PDP for Failure for 3 Consecutive Years to Achieve 3 Stars on Both Part C and Part D Summary Star Ratings in the Same Contract Year (section 422.510).
Implementing Other Technical Changes .....
III.E.1 .....Requirements for Urgently Needed Services (section 422.113).
III.E.2 .....Skilled Nursing Facility Stays (sections 422.101 and 422.102).
III.E.3 .....Agent and Broker Training and Testing Requirements (sections 422.2274 and 423.2274).
III.E.4 .....Deemed Approval of Marketing Materials (section 422.2266 and section 423.2266).
III.E.5 .....Cross-Reference Change in the Part C Disclosure Requirements (section 422.111).
III.E.6 .....Managing Disclosure and Recusal in P&T Conflicts of Interest: [Formulary] Development and Revision by a Pharmacy and
III.E.8 .....Thirty-Six-Month Coordination of Benefits (COB) Limit (section 423.466(b)).
III.E.9 .....Application and Calculation of Daily Cost-Sharing Rates (section 423.153).
III.E.10 .....Technical Change to Align Regulatory Requirements for Delivery of the Standardized Pharmacy Notice (section 423.562).
III.E.12 .....MA Organization Responsibilities in Disasters and Emergencies (section 422.100).
III.E.14 .....Technical Changes to Align Part C and Part D Contract Determination Appeal Provisions (sections 422.641 and 422.644).
III.E.15 .....Technical Changes to Align Parts C and D Appeal Provisions (sections 422.660 and 423.650).
III.E.17 .....Technical Change to the Restrictions on use of Information under Part D (section 423.322).
[*Federal RegisterVJ 2014-05-23]
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