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The Code of Federal Regulations is a codification of the general and permanent rules published in the Federal Register by the Executive departments and agencies of the Federal Government. The Code is divided into 50 titles which represent broad areas subject to Federal regulation. Each title is divided into chapters which usually bear the name of the issuing agency. Each chapter is further subdivided into parts covering specific regulatory areas.
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Title 42—
The OMB control numbers for the Centers for Medicare & Medicaid Services appear in § 400.310 of chapter IV. For the convenience of the user, subpart C consisting of §§ 400.300-400.310 is reprinted in the Finding Aids section of the third, fourth and fifth volumes.
For this volume, Robert J. Sheehan, III was Chief Editor. The Code of Federal Regulations publication program is under the direction of Michael L. White, assisted by Ann Worley.
(This book contains parts 414 to 429)
Nomenclature changes to chapter IV appear at 62 FR 46037, Aug. 29, 1997; 66 FR 39452, July 31, 2001; and 67 FR 36540, May 24, 2002.
Secs. 1102, 1871, and 1881(b)(l) of the Social Security Act (42 U.S.C. 1302, 1395hh, and 1395rr(b)(l)).
Nomenclature changes to part 414 appear at 60 FR 50442, Sept. 29, 1995, and 60 FR 53877, Oct. 18, 1995.
This part implements the following provisions of the Act:
1802—Rules for private contracts by Medicare beneficiaries.
1833—Rules for payment for most Part B services.
1834(a) and (h)—Amounts and frequency of payments for durable medical equipment and for prosthetic devices and orthotics and prosthetics.
1834(l)—Establishment of a fee schedule for ambulance services.
1834(m)—Rules for Medicare reimbursement for telehealth services.
1842(o)—Rules for payment of certain drugs and biologicals.
1847(a) and (b)—Competitive bidding for certain durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS).
1848—Fee schedule for physician services.
1881(b)—Rules for payment for services to ESRD beneficiaries.
1887—Payment of charges for physician services to patients in providers.
As used in this part, unless the context indicates otherwise—
(1) Professional services of doctors of medicine and osteopathy (including osteopathic practitioners), doctors of optometry, doctors of podiatry, doctors of dental surgery and dental medicine, and chiropractors.
(2) Supplies and services covered “incident to” physician services (excluding drugs as specified in § 414.36).
(3) Outpatient physical and occupational therapy services if furnished by a person or an entity that is not a Medicare provider of services as defined in § 400.202 of this chapter.
(4) Diagnostic x-ray tests and other diagnostic tests (excluding diagnostic laboratory tests paid under the fee schedule established under section 1833(h) of the Act).
(5) X-ray, radium, and radioactive isotope therapy, including materials and services of technicians.
(6) Antigens, as described in section 1861(s)(2)(G) of the Act.
(7) Bone mass measurement.
(8) Screening mammography services.
(a)
(b)
(a)
(1) The RVUs for the service.
(2) The GAF for the fee schedule area.
(3) The CF.
(b)
Medicare payment is based on the lesser of the actual charge or the applicable fee schedule amount.
CMS establishes RVUs for physicians' work, practice expense, and malpractice insurance.
(a)
(2)
(ii)
(b)
(2) The average practice expense percentage for a service or class of services is computed as follows:
(i) Multiply the average practice expense percentage for each specialty by the proportion of a particular service or class of service performed by that specialty.
(ii) Add the products for all specialties.
(3) For services furnished beginning calendar year (CY) 1994, for which 1994 practice expense RVUs exceed 1994 work RVUs and that are performed in office settings less than 75 percent of the time, the 1994, 1995, and 1996 practice expense RVUs are reduced by 25 percent of the amount by which they exceed the number of 1994 work RVUs. Practice expense RVUs are not reduced to less than 128 percent of 1994 work RVUs.
(4) For services furnished beginning January 1, 1998, practice expense RVUs for certain services are reduced to 110 percent of the work RVUs for those services. The following two categories of services are excluded from this limitation:
(i) The service is provided more than 75 percent of the time in an office setting; or
(ii) The service is one described in section 1848(c)(2)(G)(v) of the Act, codified at 42 U.S.C. 1395w-4(c)(2)(G). Section 1848(c)(2)(G)(v) of the Act refers to the 1998 proposed resource-based practice expense RVUs (as specified in the June 18, 1997 physician fee schedule proposed rule (62 FR 33158)) for the specific site, either in-office or out-of-office, increased from its 1997 practice expense RVUs.)
(5) For services furnished beginning January 1, 1999, the practice expense RVUs are based on 75 percent of the practice expense RVUs applicable to services furnished in 1998 and 25 percent of the relative practice expense resources involved in furnishing the service. For services furnished in 2000, the practice expense RVUs are based on 50 percent of the practice expense RVUs applicable to services furnished in 1998 and 50 percent of the relative practice expense resources involved in furnishing the service. For services furnished in 2001, the practice expense RVUs are based on 25 percent of the
(i) Usually there are two levels of practice expense RVUs that correspond to each code.
(A)
(B)
(C)
(ii) Only one practice expense RVU per code can be applied for each of the following services: services that have only technical component practice expense RVUs or only professional component practice expense RVUs; evaluation and management services, such as hospital or nursing facility visits, that are furnished exclusively in one setting; and major surgical services.
(6)(i) CMS establishes criteria for supplemental surveys regarding specialty practice expenses submitted to CMS that may be used in determining practice expense RVUs.
(ii) Any CMS-designated specialty group may submit a supplemental survey.
(iii) CMS will consider for use in determining practice expense RVUs for the physician fee schedule survey data and related materials submitted to CMS by March 1, 2004 to determine CY 2005 practice expense RVUs and by March 1, 2005 to determine CY 2006 practice expense RVUs.
(c)
(2) The average historical malpractice insurance percentage for a service or class of services is computed as follows:
(i) Multiply the average malpractice insurance percentage for each specialty by the proportion of a particular service or class of services performed by that specialty.
(ii) Add all the products for all the specialties.
(3) For services furnished in the year 2000 and subsequent years, the malpractice RVUs are based on the relative malpractice insurance resources.
(a)
(2) CMS publishes a notice in the
(3) After considering public comments, CMS revises, if necessary, the interim RVUs and announces those revisions in a final notice published in the
(b)
(2) After considering public comments, CMS publishes a final notice in the
(3) The RVU revisions are effective prospectively for services furnished beginning on the effective date specified in the final notice.
(c)
(2) Carriers must obtain prior approval from CMS to establish local codes for services that meet the definition of “physician services” in § 414.2.
CMS establishes a GAF for each service in each fee schedule area.
(a)
(1) An index that reflects one-fourth of the difference between the relative value of physicians' work effort in each of the different fee schedule areas as determined under § 414.22(a) and the national average of that work effort.
(2) An index that reflects the relative costs of the mix of goods and services comprising practice expenses (other than malpractice expenses) in each of the different fee schedule areas as determined under § 414.22(b) compared to the national average of those costs.
(3) An index that reflects the relative costs of malpractice expenses in each of the different fee schedule areas as determined under § 414.22(c) compared to the national average of those costs.
(b)
(c)
(i) At least 50 percent of counties located within the State have a population density less than 6 persons per square mile.
(ii) The State does not receive a non-labor related share adjustment determined by the Secretary to take into account the unique circumstances of hospitals located in Alaska and Hawaii.
(2)
(3)
(ii) CMS will publish annually a listing of qualifying Frontier States receiving a practice expense index floor attributable to this provision.
(d)
(1) The geographic physicians' work adjustment factor for a service is the product of the proportion of the total relative value for the service that reflects the RVUs for the work component and the geographic physicians' work index value established under paragraph (a)(1) of this section.
(2) The geographic practice expense adjustment factor for a service is the product of the proportion of the total relative value for the service that reflects the RVUs for the practice expense component, multiplied by the geographic practice cost index (GPCI) value established under paragraph (a)(2) of this section.
(3) The geographic malpractice adjustment factor for a service is the product of the proportion of the total relative value for the service that reflects the RVUs for the malpractice component, multiplied by the GPCI
CMS establishes CFs in accordance with section 1848(d) of the Act.
(a)
(b)
Unless Congress acts in accordance with section 1848(d)(3) of the Act—
(a)
(b)
(1) For CYs 1992 and 1993, 2 percentage points.
(2) For CY 1994, 2.5 percentage points.
(3) For CYs 1995 and thereafter, 5 percentage points.
(a)
(1) Hospital outpatient departments, including clinics and emergency rooms.
(2) Hospital inpatient departments.
(3) Comprehensive outpatient rehabilitation facilities.
(4) Comprehensive inpatient rehabilitation facilities.
(5) Inpatient psychiatric facilities.
(6) Skilled nursing facilities.
(b)
(c)
(d)
(1) Rural health clinic services.
(2) Surgical services not on the ambulatory surgical center covered list of procedures published under § 416.65(c) of this chapter when furnished in an ambulatory surgical center.
(3) Anesthesiology services and diagnostic and therapeutic radiology services.
(a)
(2) If physician services of the type routinely furnished in provider settings are furnished in a physician's office, separate payment may be made for certain supplies furnished incident to that physician service if the following requirements are met:
(i) It is a procedure that can safely be furnished in the office setting in appropriate circumstances.
(ii) It requires specialized supplies that are not routinely available in physicians' offices and that are generally disposable.
(iii) It is furnished before January 1, 1999.
(3) For the purpose of paragraph (a)(2) of this section, provider settings include only the following settings:
(i) Hospital inpatient and outpatient departments.
(ii) Ambulatory surgical centers.
(4) For the purpose of paragraph (a)(2) of this section, “routinely furnished in provider settings” means furnished in inpatient or outpatient hospital settings or ambulatory surgical centers more than 50 percent of the time.
(5) CMS establishes a list of services for which a separate supply payment may be made under this section.
(6) The fee schedule amount for supplies billed separately is not subject to a GPCI adjustment.
(b)
Payment for drugs incident to a physician's service is made in accordance with § 405.517 of this chapter.
(a)
(b)
(1) The care plan oversight services require recurrent physician supervision of therapy involving 30 or more minutes of the physician's time per month.
(2) Payment is made to only one physician per patient for services furnished during a calendar month period. The physician must have furnished a service requiring a face-to-face encounter with the patient at least once during the 6-month period before the month for which care plan oversight payment is first billed. The physician may not have a significant ownership interest in, or financial or contractual relationship with, the HHA in accordance with § 424.22(d) of this chapter. The physician may not be the medical director or employee of the hospice and may not furnish services under an arrangement with the hospice.
(3) If a physician furnishes care plan oversight services during a postoperative period, payment for care plan oversight services is made if the services are documented in the patient's medical record as unrelated to the surgery.
(c)
(i) The physician and NPP are part of the same group practice; or
(ii) If the NPP is a nurse practitioner or clinical nurse specialist, the physician signing the plan of care also has a collaborative agreement with the NPP; or
(iii) If the NPP is a physician assistant, the physician signing the plan of care is also the physician who provides general supervision of physician assistant services for the practice.
(2) Payment may be made for care plan oversight services furnished by an NPP when:
(i) The NPP providing the care plan oversight has seen and examined the patient;
(ii) The NPP providing care plan oversight is not functioning as a consultant whose participation is limited to a single medical condition rather than multi-disciplinary coordination of care; and
(iii) The NPP providing care plan oversight integrates his or her care with that of the physician who signed the plan of care.
(a)
(b)
(1) Global surgery policy (for example, post- and pre-operative periods and services, and intra-operative services).
(2) Professional and technical components (for example, payment for services, such as an EEG, which typically comprise a technical component (the taking of the test) and a professional component (the interpretation)).
(3) Payment modifiers (for example, assistant-at-surgery, multiple surgery, bilateral surgery, split surgical global services, team surgery, and unusual services).
(a)
(b)
(c)
(2) The “second, third, and fourth years of practice“ are the first, second, and third CYs following the first year of practice, respectively.
(d)
(1) First year—80 percent
(2) Second year—85 percent
(3) Third year—90 percent
(4) Fourth year—95 percent
(a)
(2)
(3)
(4)
(b)
(1) If the AHPB determined under paragraph (a) of this section is from 85 percent to 115 percent of the fee schedule amount for the area for services furnished in 1992, payment is at the fee schedule amount.
(2) If the AHPB determined under paragraph (a) of this section is less than 85 percent of the fee schedule amount for the area for services furnished in 1992, an amount equal to the AHPB plus 15 percent of the fee schedule amount is substituted for the fee schedule amount.
(3) If the AHPB determined under paragraph (a) of this section is greater than 115 percent of the fee schedule amount for the area for services furnished in 1992, an amount equal to the AHPB minus 15 percent of the fee schedule amount is substituted for the fee schedule amount.
(c)
(1) If the AHPB determined under paragraph (a) of this section is from 85 percent to 109 percent of the fee schedule amount for the area for services furnished in 1992, payment is at the fee schedule amount.
(2) If the AHPB determined under paragraph (a) of this section is less than 85 percent of the fee schedule amount for the area for services furnished in 1992, an amount equal to the AHPB plus 15 percent of the fee schedule amount is substituted for the fee schedule amount.
(3) If the AHPB determined under paragraph (a) of this section is greater than 109 percent of the fee schedule amount for the area for services furnished in 1992, an amount equal to the AHPB minus 9 percent of the fee schedule amount is substituted for the fee schedule amount.
(d)
(e)
(f)
(a)
(1)
(2)
(3)
(b)
(1) The carrier bases the fee schedule amount for an anesthesia service on the product of the sum of allowable base and time units and an anesthesia-specific CF. The carrier calculates the time units from the anesthesia time reported by the anesthesia practitioner for the anesthesia procedure. The physician who fulfills the conditions for medical direction in § 415.110 (Conditions for payment: Anesthesiology services) reports the same anesthesia time as the medically-directed CRNA.
(2) CMS furnishes the carrier with the base units for each anesthesia procedure code. The base units are derived from the 1988 American Society of Anesthesiologists' Relative Value Guide except that the number of base units recognized for anesthesia services furnished during cataract or iridectomy surgery is four units.
(3) Modifier units are not allowed. Modifier units include additional units charged by a physician or a CRNA for patient health status, risk, age, or unusual circumstances.
(c)
(i) The physician performs the entire anesthesia service alone.
(ii) The physician establishes an attending physician relationship in one or two concurrent cases involving an intern or resident and the service was furnished before January 1, 1994.
(iii) The physician establishes an attending physician relationship in one case involving an intern or resident and the service was furnished on or after January 1, 1994 but prior to January 1, 1996. For services on or after January 1, 1996, the physician must be the teaching physician as defined in §§ 415.170 through 415.184 of this chapter.
(iv) The physician and the CRNA or AA are involved in a single case and the services of each are found to be medically necessary.
(v) The physician is continuously involved in a single case involving a student nurse anesthetist.
(vi) The physician is continuously involved in a single case involving a CRNA or AA and the service was furnished prior to January 1, 1998.
(2) CMS determines the fee schedule amount for an anesthesia service personally performed by a physician on the basis of an anesthesia-specific fee schedule CF and unreduced base units and anesthesia time units. One anesthesia time unit is equivalent to 15 minutes of anesthesia time, and fractions of a 15-minute period are recognized as fractions of an anesthesia time unit.
(d)
(i) The physician performs the activities described in § 415.110 of this chapter.
(ii) The physician directs qualified individuals involved in two, three, or four concurrent cases.
(iii) Medical direction can occur for a single case furnished on or after January 1, 1998 if the physician performs the activities described in § 415.110 of this chapter and medically directs a single CRNA or AA.
(2) The rules for medical direction differ for certain time periods depending on the nature of the qualified individual who is directed by the physician.
(i) If more than two procedures are directed on or after January 1, 1994, the qualified individuals could be AAs, CRNAs, interns, or residents. The medical direction rules apply to student nurse anesthetists only if the physician directs two concurrent cases, each of which involves a student nurse anesthetist or the physician directs one case involving a student nurse anesthetist and the other involving a CRNA, AA, intern, or resident.
(ii) For services furnished on or after January 1, 2010, the medical direction rules do not apply to a single anesthesia resident case that is concurrent to another case which is paid under the medical direction payment rules as specified in paragraph (e) of this section.
(3) Payment for medical direction is based on a specific percentage of the payment allowance recognized for the anesthesia service personally performed by a physician alone. The following percentages apply for the years specified:
(i) CY 1994—60 percent of the payment allowance for personally performed procedures.
(ii) CY 1995—57.5 percent of the payment allowance for personally performed services.
(iii) CY 1996—55 percent of the payment allowance for personally performed services.
(iv) CY 1997—52.5 percent of the payment allowance for personally performed services.
(v) CY 1998 and thereafter—50 percent of the payment allowance for personally performed services.
(e)
(f)
(g)
(2) CMS makes no separate payment for other medical or surgical services, such as the pre-anesthetic examination of the patient, pre- or post-operative visits, or usual monitoring functions, that are ordinarily included in the anesthesia service.
(h)
(a)
(b)
(a)
(i) The performing supplier's net charge to the billing physician or other supplier. For purposes of this paragraph (a)(1) only, with respect to the TC, the performing supplier is the physician who supervised the TC, and with respect to the PC, the performing supplier is the physician who performed the PC.
(ii) The billing physician or other supplier's actual charge.
(iii) The fee schedule amount for the test that would be allowed if the performing supplier billed directly.
(2) The following requirements are applicable for purposes of paragraph (a)(1) of this section:
(i) The net charge must be determined without regard to any charge that is intended to reflect the cost of equipment or space leased to the performing supplier by or through the billing physician or other supplier.
(ii) A performing physician shares a practice with the billing physician or other supplier if he or she furnishes substantially all (which, for purposes of this section, means “at least 75 percent”) of his or her professional services through such billing physician or other supplier. The “substantially all” requirement will be satisfied if, at the time the billing physician or other supplier submits a claim for a service furnished by the performing physician, the billing physician or other supplier has a reasonable belief that:
(A) For the 12 months prior to and including the month in which the service was performed, the performing physician furnished substantially all of his or her professional services through the billing physician or other supplier; or
(B) The performing physician will furnish substantially all of his or her professional services through the billing physician or other supplier for the next 12 months (including the month in which the service is performed).
(iii) A physician will be deemed to share a practice with the billing physician or other supplier with respect to the performance of the TC or PC of a diagnostic test if the physician is an owner, employee or independent contractor of the billing physician or other supplier and the TC or PC is performed in the office of the billing physician or other supplier. The “office of the billing physician or other supplier” is any medical office space, regardless of number of locations, in which the ordering physician or other ordering supplier regularly furnishes patient care, and includes space where the billing physician or other supplier furnishes diagnostic testing, if the space is located in the same building (as defined in § 411.351) in which the ordering physician or other ordering supplier regularly furnishes patient care. With respect to a billing physician or other supplier that is a physician organization (as defined in § 411.351 of this chapter), the “office of the billing physician or other supplier” is space in which the ordering physician provides substantially the full range of patient care services that the ordering physician provides generally. The performance of the TC includes both the conducting of the TC as well as the supervision of the TC.
(b)
(2) Physicians and other suppliers that accept Medicare assignment may bill beneficiaries for only the applicable deductibles and coinsurance.
(3) Physicians and other suppliers that do not accept Medicare assignment may not bill the beneficiary more than the payment amount described in paragraph (a) of this section.
Allowed amounts for the services of a physician assistant furnished beginning January 1, 1992 and ending December 31, 1997, may not exceed the limits specified in paragraphs (a) through (c) of this section. Allowed amounts for the services of a physician assistant furnished beginning January 1, 1998, may not exceed the limits specified in paragraph (d) of this section.
(a) For assistant-at-surgery services, 65 percent of the amount that would be allowed under the physician fee schedule if the assistant-at-surgery service was furnished by a physician.
(b) For services (other than assistant-at-surgery services) furnished in a hospital, 75 percent of the physician fee schedule amount for the service.
(c) For all other services, 85 percent of the physician fee schedule amount for the service.
(d) For services (other than assistant-at-surgery services) furnished beginning January 1, 1998, 85 percent of the physician fee schedule amount for the service. For assistant-at-surgery services, 85 percent of the physician fee schedule amount that would be allowed under the physician fee schedule if the assistant-at-surgery service were furnished by a physician.
(a) For services furnished after December 31, 1991, allowed amounts under the fee schedule established under section 1833(a)(1)(K) of the Act for the payment of certified nurse-midwife services may not exceed 65 percent of the physician fee schedule amount for the service.
(b) For certified nurse-midwife services furnished on or after January 1, 2011, allowed amounts may not exceed 100 percent of the physician fee schedule amount that would be paid to a physician for the services.
(a)
(1) For services furnished in a hospital (including assistant-at-surgery services), 75 percent of the physician fee schedule amount for the service.
(2) For all other services, 85 percent of the physician fee schedule amount for the service.
(b)
(c)
(a)
(b)
(a)
(1) The allowance for an anesthesia service furnished by a medically directed CRNA is based on a fixed percentage of the allowance recognized for the anesthesia service personally performed by the physician alone, as specified in § 414.46(d)(3); and
(2) The CF for an anesthesia service furnished by a CRNA not directed by a physician may not exceed the CF for a service personally performed by a physician.
(b)
(c)
(a)
(1) The teaching CRNA, who is not under medical direction of a physician,
(2) The teaching CRNA, who is not under the medical direction of a physician, is involved with two concurrent anesthesia cases with student nurse anesthetists. The teaching CRNA must be present with the student nurse anesthetist for the pre and post anesthesia services included in the anesthesia base unit. For the anesthesia time of the two concurrent cases, the teaching CRNA can only be involved with those two concurrent cases and may not perform services for other patients.
(b)
The fee schedule for clinical psychologist services is set at 100 percent of the amount determined for corresponding services under the physician fee schedule.
(a) Payment under the physician fee schedule. Except as provided in paragraph (d) of this section, payment for outpatient diabetes self-management training is made under the physician fee schedule in accordance with §§ 414.1 through 414.48.
(b) To whom payment may be made. Payment may be made to an entity approved by CMS to furnish outpatient diabetes self-management training in accordance with part 410, subpart H of this chapter.
(c) Limitation on payment. Payment may be made for training sessions actually attended by the beneficiary and documented on attendance sheets.
(d) Payments made to those not paid under the physician fee schedule. Payments may be made to other entities not routinely paid under the physician fee schedule, such as hospital outpatient departments, ESRD facilities, and DME suppliers. The payment equals the amounts paid under the physician fee schedule.
(e) Other conditions for fee-for-service payment. The beneficiary must meet the following conditions:
(1) Has not previously received initial training for which Medicare payment was made under this benefit.
(2) Is not receiving services as an inpatient in a hospital, SNF, hospice, or nursing home.
(3) Is not receiving services as an outpatient in an RHC or FQHC.
(a)
(b)
(c)
(d)
(e)
(1) Is not an inpatient of a hospital, SNF, nursing home, or hospice.
(2) Is not receiving services in an RHC, FQHC or ESRD dialysis facility.
(a)
(1) The Medicare payment amount for office or other outpatient visits, subsequent hospital care services (with the limitation of one telehealth subsequent hospital care service every 3 days), subsequent nursing facility care services (not including the Federally-mandated periodic visits under § 483.40(c) and with the limitation of one telehealth nursing facility care service every 30 days), professional consultations, psychiatric diagnostic interview examination, neurobehavioral status exam, individual psychotherapy, pharmacologic management, end-stage renal disease-related services included in the monthly capitation payment (except for one “hands on” visit per month to examine the access site), individual and group medical nutrition therapy services, individual and group kidney disease education services, individual and group diabetes self-management training (DSMT) services (except for 1 hour of in-person DSMT services to be furnished in the year following the initial DSMT service to ensure effective injection training), and individual and group health and behavior assessment and intervention furnished via an interactive telecommunications system is equal to the current fee schedule amount applicable for the service of the physician or practitioner.
(i)
(ii)
(2) Only the physician or practitioner at the distant site may bill and receive payment for the professional service via an interactive telecommunications system.
(3) Payments made to the physician or practitioner at the distant site, including deductible and coinsurance, for the professional service may not be shared with the referring practitioner or telepresenter.
(b)
(1) For services furnished on or after October 1, 2001 through December 31, 2002, the payment amount to the originating site is the lesser of the actual charge or the originating site facility fee of $20. For services furnished on or after January 1 of each subsequent year, the facility fee for the originating site will be updated by the Medicare Economic Index (MEI) as defined in section 1842(i)(3) of the Act.
(2) Only the originating site may bill for the originating site facility fee and only on an assignment-related basis. The distant site physician or practitioner may not bill for or receive payment for facility fees associated with the professional service furnished via an interactive telecommunications system.
(c)
(d)
(e)
(1) Knowingly and willfully bills or collects for services in violation of the limitation of this section.
(2) Fails to timely correct excess charges by reducing the actual charge billed for the service in an amount that does not exceed the limiting charge for
(3) Fails to submit a claim on a standard form for services provided for which payment is made on a fee schedule basis.
(4) Imposes a charge for completing and submitting the standard claims form.
(a)
(b) Physicians' services furnished to a beneficiary in a Physician Scarcity Area (PSA) for primary or specialist care are eligible for a 5 percent incentive payment.
(c) Primary care physicians furnishing services in primary care PSAs are entitled to an additional 5 percent incentive payment above the amount paid under the physician fee schedule for their professional services furnished on or after January 1, 2005 and before January 1, 2008.
(d) Physicians, as defined in section 1861(r)(1) of the Act, furnishing services in specialist care PSAs are entitled to an additional 5 percent payment above the amount paid under the physician fee schedule for their professional services furnished on or after January 1, 2005 and before January 1, 2008.
(a)
(1) HPSA bonuses are payable for services furnished by physicians as defined in section 1861(r) of the Act in areas designated as of December 31 of the prior year as geographic primary medical care HPSAs as defined in section 332(a)(1)(A) of the Public Health Service Act.
(2) HPSA bonuses are payable for services furnished by psychiatrists in areas designated as of December 31 of the prior year as geographic mental health HPSAs if the services are not already eligible for the bonus based on being in a geographic primary care HPSA.
(3) Physicians eligible for the HPSA physician bonus are entitled to a 10 percent incentive payment above the amount paid for their professional services under the physician fee schedule.
(4) Physicians furnishing services in areas that are designated as geographic HPSAs prior to the beginning of the year but not included on the published list of zip codes for which automated HPSA bonus payments are made must use the AQ modifier to receive the HPSA physician bonus payment.
(b)
(1) A major surgical procedure as defined in § 414.2 of this part is furnished by a general surgeon on or after January 1, 2011 and before January 1, 2016 in an area recognized for the HPSA physician bonus program under paragraph (a)(1) of this section.
(2) Payment will be made on a quarterly basis in an amount equal to 10 percent of the Part B payment amount for major surgical procedures furnished as described in paragraph (b)(1) of this section, in addition to the amount the physician would otherwise be paid.
(3) Physicians furnishing services in areas that are designated as geographic HPSAs eligible for the HPSA physician bonus program under paragraph (a)(1) of this section prior to the beginning of the year but not included on the published list of zip codes for which automated HPSA surgical incentive payments are made should report HCPCS modifier -AQ to receive the HPSA surgical incentive payment.
(4) The payment described in paragraph (b)(2) of this section is made to the surgeon or, where the surgeon has reassigned his or her benefits to a critical access hospital (CAH) paid under the optional method, to the CAH based on an institutional claim.
(a)
(b)
(i) Magnetic resonance imaging.
(ii) Computed tomography.
(iii) Nuclear medicine.
(iv) Positron emission tomography.
(c)
(1) A detailed description of how the organization's accreditation criteria satisfy the statutory standards authorized by section 1834(e)(3) of the Act, specifically—
(i) Qualifications of medical personnel who are not physicians and who furnish the TC of advanced diagnostic imaging services;
(ii) Qualifications and responsibilities of medical directors and supervising physicians (who may be the same person), such as their training in advanced diagnostic imaging services in a residency program, expertise obtained through experience, or continuing medical education courses;
(iii) Procedures to ensure the reliability, clarity, and accuracy of the technical quality of diagnostic images produced by the supplier, including a thorough evaluation of equipment performance and safety;
(iv) Procedures to ensure the safety of persons who furnish the TC of advanced diagnostic imaging services and individuals to whom such services are furnished;
(v) Procedures to assist the beneficiary in obtaining the beneficiary's imaging records on request; and
(vi) Procedures to notify the accreditation organization of any changes to the modalities subsequent to the organization's accreditation decision.
(2) An agreement to conform accreditation requirements to any changes in Medicare statutory requirements authorized by section 1834(e) of the Act. The accreditation organization must maintain or adopt standards that are equal to, or more stringent than, those of Medicare.
(3) Information that demonstrates the accreditation organization's knowledge and experience in the advanced diagnostic imaging arena.
(4) The organization's proposed fees for accreditation for each modality in which the organization intends to offer accreditation, including any plans for reducing the burden and cost of accreditation to small and rural suppliers.
(5) Any specific documentation requirements and attestations requested by CMS as a condition of designation under this part.
(6) A detailed description of the organization's survey process, including the following:
(i) Type and frequency of the surveys performed.
(ii) The ability of the organization to conduct timely reviews of accreditation applications, to include the organizations national capacity.
(iii) Description of the organization's audit procedures, including random site visits, site audits, or other strategies for ensuring suppliers maintain compliance for the duration of accreditation.
(iv) Procedures for performing unannounced site surveys.
(v) Copies of the organization's survey forms.
(vi) A description of the accreditation survey review process and the accreditation status decision-making process, including the process for addressing deficiencies identified with the accreditation requirements, and the procedures used to monitor the correction of deficiencies found during an accreditation survey.
(vii) Procedures for coordinating surveys with another accrediting organization if the organization does not accredit all products the supplier provides.
(viii) Detailed information about the individuals who perform evaluations for the accreditation organization, including all of the following information:
(A) The number of professional and technical staff that are available for surveys.
(B) The education, employment, and experience requirements surveyors must meet.
(C) The content and length of the orientation program.
(ix) The frequency and types of in-service training provided to survey personnel.
(x) The evaluation systems used to monitor the performance of individual surveyors and survey teams.
(xi) The policies and procedures regarding an individual's participation in the survey or accreditation decision process of any organization with which the individual is professionally or financially affiliated.
(xii) The policies and procedures used when an organization has a dispute regarding survey findings or an adverse decision.
(7) Detailed information about the size and composition of survey teams for each category of advanced medical imaging service supplier accredited.
(8) A description of the organization's data management and analysis system for its surveys and accreditation decisions, including the kinds of reports, tables, and other displays generated by that system.
(9) The organization's procedures for responding to and for the investigation of complaints against accredited facilities, including policies and procedures regarding coordination of these activities with appropriate licensing bodies and CMS.
(10) The organization's policies and procedures for the withholding or removal of accreditation status for facilities that fail to meet the accreditation organization's standards or requirements, and other actions taken by the organization in response to noncompliance with its standards and requirements. These policies and procedures must include notifying CMS of Medicare facilities that fail to meet the requirements of the accrediting organization.
(11) A list of all currently accredited suppliers, the type and category of accreditation currently held by each supplier, and the expiration date of each supplier's current accreditation.
(12) A written presentation that demonstrates the organization's ability to furnish CMS with electronic data in ASCII comparable code.
(13) A resource analysis that demonstrates that the organization's staffing, funding, and other resources are adequate to perform the required surveys and related activities.
(14) A statement acknowledging that, as a condition for approval of designation, the organization agrees to carry out the following activities:
(i) Prioritize surveys for those suppliers needing to be accredited by January 1, 2012.
(ii) Notify CMS, in writing, of any Medicare supplier that had its accreditation revoked, withdrawn, revised, or any other remedial or adverse action taken against it by the accreditation organization within 30 calendar days of any such action taken.
(iii) Notify all accredited suppliers within 10 calendar days of the organization's removal from the list of designated accreditation organizations.
(iv) Notify CMS, in writing, at least 30 calendar days in advance of the effective date of any significant proposed changes in its accreditation requirements.
(v) Permit its surveyors to serve as witnesses if CMS takes an adverse action based on accreditation findings.
(vi) Notify CMS, in writing (electronically or hard copy), within 2 business days of a deficiency identified in any accreditation supplier from any source where the deficiency poses an immediate jeopardy to the supplier's beneficiaries or a hazard to the general public.
(vii) Provide, on an annual basis, summary data specified by CMS that relates to the past year's accreditations and trends.
(viii) Attest that the organization will not perform any accreditation surveys of Medicare-participating suppliers with which it has a financial relationship in which it has an interest.
(ix) Conform accreditation requirements to changes in Medicare requirements.
(x) If CMS withdraws an accreditation organization's approved status, work collaboratively with CMS to direct suppliers to the remaining accreditation organizations within a reasonable period of time.
(d)
(e)
(f)
(g)
(1) Provide CMS with all of the following in written format (either electronic or hard copy):
(i) Copies of all accreditation surveys, together with any survey-related information that CMS may require (including corrective action plans and summaries of findings with respect to unmet CMS requirements).
(ii) Notice of all accreditation decisions.
(iii) Notice of all complaints related to suppliers.
(iv) Information about all accredited suppliers against which the accreditation organization has taken remedial or adverse action, including revocation, withdrawal, or revision of the supplier's accreditation.
(v) Notice of any proposed changes in its accreditation standards or requirements or survey process. If the organization implements the changes before or without CMS' approval, CMS may withdraw its approval of the accreditation organization.
(2) Within 30 calendar days after a change in CMS requirements, the accreditation organization must submit an acknowledgment of receipt of CMS' notification to CMS.
(3) The accreditation organization must permit its surveyors to serve as witnesses if CMS takes an adverse action based on accreditation findings.
(4) Within 2 business days of identifying a deficiency of an accredited supplier that poses immediate jeopardy to a beneficiary or to the general public, the accreditation organization must provide CMS with written notice of the deficiency and any adverse action implemented by the accreditation organization.
(5) Within 10 calendar days after CMS' notice to a CMS-approved accreditation organization that CMS intends to withdraw approval of the accreditation organization, the accreditation organization must provide written notice
(6) The organization must provide, on an annual basis, summary data specified by CMS that relate to the past year's accreditation activities and trends.
(h)
(1)
(ii) The audits must be conducted on a representative sample of suppliers who have been accredited by a particular accrediting organization or in response to allegations of supplier noncompliance with the standards.
(A) When conducted on a representative sample basis, the audit is comprehensive and addresses all of the standards, or may focus on a specific standard in issue.
(B) When conducted in response to an allegation, CMS audits any standards that CMS determines are related to the allegations.
(2)
(A) A 10 percent or greater rate of disparity between findings by the accreditation organization and findings by CMS on standards that do not constitute immediate jeopardy to patient health and safety if unmet; or
(B) Any disparity between findings by the accreditation organization and findings by CMS on standards that constitute immediate jeopardy to patient health and safety if unmet; or,
(C) Irrespective of the rate of disparity, widespread or systemic problems in an organization's accreditation process such that accreditation by that accreditation organization no longer provides CMS with adequate assurance that suppliers meet or exceed the Medicare requirements; then CMS will give the organization written notice of its intent to withdraw approval as specified in paragraph (h)(3) of this section.
(ii) CMS may also provide the organization written notice of its intent to withdraw approval if an equivalency review, onsite observation, or CMS' daily experience with the accreditation organization suggests that the accreditation organization is not meeting the requirements of this section.
(3)
(i) Accreditation by the organization no longer adequately assures that the suppliers furnishing the technical component of advanced diagnostic imaging service are meeting the established industry standards for each modality and that failure to meet those requirements could jeopardize the health or safety of Medicare beneficiaries and could constitute a significant hazard to the public health; or
(ii) The accreditation organization has failed to meet its obligations with respect to application or reapplication procedures.
(i)
(1)
(ii) The request for reconsideration must specify the findings or issues with which the accreditation organization disagrees and the reasons for the disagreement.
(iii) A requestor may withdraw its request for reconsideration at any time
(2)
(i) The opportunity for an informal hearing to be conducted by a hearing officer appointed by the Administrator of CMS and provide the accreditation organization the opportunity to present, in writing and in person, evidence or documentation to refute the determination to deny approval, or to withdraw or not renew designation; and
(ii) Written notice of the time and place of the informal hearing at least 10 business days before the scheduled date.
(3)
(A) CMS.
(B) The organization requesting the reconsideration including—
(
(
(
(ii) The hearing is conducted by the hearing officer who receives testimony and documents related to the proposed action.
(iii) Testimony and other evidence may be accepted by the hearing officer even though such evidence may be inadmissible under the Federal Rules of Civil Procedure.
(iv) The hearing officer does not have the authority to compel by subpoena the production of witnesses, papers, or other evidence.
(v) Within 45 calendar days of the close of the hearing, the hearing officer presents the findings and recommendations to the accreditation organization that requested the reconsideration.
(vi) The written report of the hearing officer includes separate numbered findings of fact and the legal conclusions of the hearing officer.
(vii) The hearing officer's decision is final.
(a)
(i) A physician (as defined in section 1861(r)(1) of the Act) who meets all of the following criteria:
(A) Enrolled in Medicare with a primary specialty designation of 08-family practice, 11-internal medicine, 37-pediatrics, or 38-geriatrics.
(B) At least 60 percent of the physician's allowed charges under the physician fee schedule (excluding hospital inpatient care and emergency department visits) during a reference period specified by the Secretary are for primary care services.
(ii) A nurse practitioner, clinical nurse specialist, or physician assistant (as defined in section 1861(aa)(5) of the Act) who meets all of the following criteria:
(A) Enrolled in Medicare with a primary specialty designation of 50-nurse practitioner, 89-certified clinical nurse, or 97-physician assistant.
(B) At least 60 percent of the practitioner's allowed charges under the physician fee schedule (excluding hospital inpatient care and emergency department visits) during a reference period specified by the Secretary are for primary care services.
(i) New and established patient office or other outpatient evaluation and management (E/M) visits;
(ii) Initial, subsequent, discharge, and other nursing facility E/M services;
(iii) New and established patient domiciliary, rest home (for example, boarding home), or custodial care E/M services;
(iv) Domiciliary, rest home (for example, assisted living facility), or home care plan oversight services; and
(v) New and established patient home E/M visits.
(b)
(2) The payment described in paragraph (b)(1) of this section is made to the eligible primary care practitioner or, where the physician has reassigned his or her benefits to a critical access hospital (CAH) paid under the optional method, to the CAH based on an institutional claim.
(a)
(1) 1848(a)—Payment Based on Fee Schedule.
(2) 1848(k)—Quality Reporting System.
(3) 1848(m)—Incentive Payments for Quality Reporting.
(b)
(i) A physician.
(ii) A practitioner described in section 1842(b)(18)(C) of the Act.
(iii) A physical or occupational therapist or a qualified speech-language pathologist.
(iv) A qualified audiologist (as defined in section 1861(ll)(3)(B) of the Act).
(i) The program requires the physician to maintain a valid unrestricted license in the United States.
(ii) The program requires a physician to participate in educational and self-assessment programs that require an assessment of what was learned.
(iii) The program requires a physician to demonstrate, through a formalized secure examination, that the physician has the fundamental diagnostic skills, medical knowledge, and clinical judgment to provide quality care in their respective specialty.
(iv) The program requires successful completion of a qualified maintenance of certification program practice assessment.
(i) Includes an initial assessment of an eligible professional's practice that is designed to demonstrate the physician's use of evidence-based medicine;
(ii) Includes a survey of patient experience with care; and
(iii) Requires a physician to implement a quality improvement intervention to address a practice weakness identified in the initial assessment under paragraph (h) of this section and then to remeasure to assess performance improvement after such intervention.
(c)
(1) There are any quality measures that have been established under the Physician Quality Reporting System that are applicable to any such services furnished by such professional (or in the case of a group practice under paragraph (g) of this section, such group practice) for such reporting period; and
(2) The eligible professional (or in the case of a group practice under paragraph (g) of this section, the group practice) satisfactorily submits (as determined under paragraph (f) of this section for eligible professionals and paragraph (g) of this section for group practices) to the Secretary data on such quality measures in accordance with the Physician Quality Reporting System for such reporting period, in addition to the amount otherwise paid under section 1848 of the Act, there also must be paid to the eligible professional (or to an employer or facility in the cases described in section 1842(b)(6)(A) of the Act or, in the case of a group practice) under paragraph (g) of this section, to the group practice, from the Federal Supplementary Medical Insurance Trust Fund established under section 1841 of the Act an amount equal to the applicable quality percent (as specified in paragraph (c)(3) of this section) of the eligible professional's (or, in the case of a group practice under paragraph (g) of this section, the group practice's) total estimated allowed charges for all covered professional services furnished by the eligible professional (or, in the case of a group practice under paragraph (g) of this section, by the group practice) during the applicable reporting period. For purposes of this paragraph,
(i) The eligible professional's (or, in the case of a group practice under paragraph (g) of this section, the group practice's) total estimated allowed charges for covered professional services furnished during a reporting period are determined based on claims processed in the National Claims History (NCH) no later than 2 months after the end of the applicable reporting period;
(ii) In the case of an eligible professional who furnishes covered professional services in more than one practice, incentive payments are separately determined for each practice based on claims submitted for the eligible professional for each practice;
(iii) Incentive payments earned by an eligible professional (or in the case of a group practice under paragraph (g) of this section, by a group practice) for a particular program year will be paid as
(3)
(i) For 2011, 1.0 percent; and
(ii) For 2012, 2013, and 2014, 0.5 percent;
(d)
(2) In order to qualify for the additional incentive payment described in paragraph (d)(1) of this section, an eligible professional must meet the following requirements:
(i) The eligible professional must—
(A) Satisfactorily submit data on quality measures for purposes of this section for a year; and
(B) Have such data submitted on their behalf through a Maintenance of Certification program (as defined in paragraph (b) of this section) that meets:
(
(
(ii) The eligible professional, more frequently than is required to qualify for or maintain board certification status—
(A) Participates in a maintenance of certification program (as defined in paragraph (b) of this section) for a year; and
(B) Successfully completes a qualified maintenance of certification program practice assessment (as defined in paragraph (b) of this section) for such year.
(iii) A Maintenance of Certification Program submits to the Secretary, on behalf of the eligible professional, information—
(A) In a form and manner specified by the Secretary, that the eligible professional has successfully met the requirements of paragraph (d)(2)(ii) of this section, which may be in the form of a structural measure);
(B) If requested by the Secretary, on the survey of patient experience with care (as described in paragraph (b) of this section); and
(C) As the Secretary may require, on the methods, measures, and data used under the Maintenance of Certification Program and the qualified Maintenance of Certification Program practice assessment.
(e)
(1)
(2)
(3)
(f)
(1)
(i) The 12-month period from January 1 through December 31 of such program year; or
(ii) The 6-month period from July 1 through December 31 of such program year.
(2)
(3)
(i) Reporting the individual Physician Quality Reporting System quality measures or Physician Quality Reporting System measures groups to CMS, by no later than 2 months after the end of the applicable reporting period, on the eligible professional's Medicare Part B claims for covered professional services furnished during the applicable reporting period.
(ii) Reporting the individual Physician Quality Reporting System quality measures or Physician Quality Reporting System measures groups to a qualified registry (as specified in paragraph (b) of this section) in the form and manner and by the deadline specified by the qualified registry selected by the eligible professional. The selected registry will submit information, as required by CMS, for covered professional services furnished by the eligible professional during the applicable reporting period to CMS on the eligible professional's behalf; or
(iii) Reporting the individual Physician Quality Reporting System quality measures to CMS by extracting clinical data using a secure data submission method, as required by CMS, from a qualified EHR product (as defined in paragraph (b) of this section) by the deadline specified by CMS for covered professional services furnished by the eligible professional during the applicable reporting period. Prior to actual data submission for a given program year and by a date specified by CMS, the eligible professional must submit a test file containing real or dummy clinical quality data extracted from the qualified EHR product selected by the eligible professional using a secure data submission method, as required by CMS.
(g)
(1) Meets the participation requirements specified by CMS for the Physician Quality Reporting System group practice reporting option or is a group practice of any size (including solo practitioners) or comprised of multiple TINs participating in a Medicare approved demonstration project that is
(2) Is selected by CMS to participate in the Physician Quality Reporting System group practice reporting option;
(3) Reports measures specified by CMS in the form and manner, and at a time specified by CMS; and
(4) Meets other requirements for satisfactory reporting specified by CMS.
(5) No double payments. Payments to a group practice under this paragraph must be in lieu of the payments that would otherwise be made under the Physician Quality Reporting System to eligible professionals in the group practice for meeting the criteria for satisfactory reporting for individual eligible professionals.
(i) If an eligible professional, as identified by an individual NPI, has reassigned his or her Medicare billing rights to a TIN selected to participate in the Physician Quality Reporting System group practice reporting option for a program year, then for that program year the eligible professional must participate in the Physician Quality Reporting System via the group practice reporting option. For any program year in which the TIN is selected to participate in the Physician Quality Reporting System group practice reporting option, the eligible professional cannot individually qualify for a Physician Quality Reporting System incentive payment by meeting the requirements specified in paragraph (f) of this section.
(ii) If, for the program year, the eligible professional participates in the Physician Quality Reporting System under another TIN that is not selected to participate in the Physician Quality Reporting System group practice reporting option for that program year, then the eligible professional may individually qualify for a Physician Quality Reporting System incentive by meeting the requirements specified in paragraph (f) of this section under that TIN.
(h)
(1) The determination of measures applicable to services furnished by eligible professionals under the Physician Quality Reporting System;
(2) The determination of the payment limitation; and
(3) The determination of any Physician Quality Reporting System incentive payment and the Physician Quality Reporting System payment adjustment.
(i)
(1) To request an informal review, an eligible professional (or in the case of reporting under paragraph (g) of this section, group practices) must submit a request to CMS within 90 days of the release of the feedback reports. The request must be submitted in writing or via e-mail and summarize the concern(s) and reasons for requesting an informal review and may also include information to assist in the review.
(2) CMS will provide a written response within 60 days of the receipt of the original request.
(i) All decisions based on the informal review will be final.
(ii) There will be no further review or appeal.
(j)
(a)
(1) Section 1848(a)—Payment Based on Fee Schedule.
(2) Section 1848(m)—Incentive Payments for Quality Reporting.
(b)
(i) A physician.
(ii) A practitioner described in section 1842(b)(18)(C) of the Act.
(iii) A physical or occupational therapist or a qualified speech-language pathologist.
(iv) A qualified audiologist (as defined in section 1861(ll)(3)(B) of the Act).
(i) Defined at § 414.90(b), that is participating in the Physician Quality Reporting System; or
(ii) (A) In a Medicare approved demonstration project that is deemed to be participating in the Physician Quality Reporting System group practice reporting option; and
(B) Has indicated its desire to participate in the electronic prescribing group practice option.
(c)
(i) For purposes of paragraph (c)(1) of this section,
(A) The eligible professional's (or, in the case of a group practice under paragraph (e) of this section, the group practice's) total estimated allowed charges for covered professional services furnished during a reporting period are determined based on claims processed in the National Claims History (NCH) no later than 2 months after the end of the applicable reporting period;
(B) In the case of an eligible professional who furnishes covered professional services in more than one practice, incentive payments are separately
(C) Incentive payments earned by an eligible professional (or in the case of a group practice under paragraph (e) of this section, by a group practice) for a particular program year will be paid as a single consolidated payment to the TIN holder of record.
(ii)
(A) For the 2011 and 2012 program years, 1.0 percent.
(B) For the 2013 program year, 0.5 percent.
(iii)
(2)
(i)
(A) For 2012, 99 percent;
(B) For 2013, 98.5 percent; and
(C) For 2014, 98 percent.
(ii)
(3)
(d)
(1)
(2)
(i) CMS, by no later than 2 months after the end of the applicable reporting period, on the eligible professional's Medicare Part B claims for covered professional services furnished by the eligible professional during the reporting period specified in paragraph (d)(1) of this section;
(ii) A qualified registry (as defined in paragraph (b) of this section) in the form and manner and by the deadline specified by the qualified registry selected by the eligible professional. The selected qualified registry will submit information, as required by CMS, for covered professional services furnished by the eligible professional during the reporting period specified in paragraph (d)(1) of this section to CMS on the eligible professional's behalf; or
(iii) CMS by extracting clinical data using a secure data submission method, as required by CMS, from a qualified electronic health record product (as defined in paragraph (b) of this section) by the deadline specified by CMS for covered professional services furnished by the eligible professional during the reporting period specified in paragraph (d)(1) of this section. Prior to actual data submission for a given program year and by a date specified by CMS, the eligible professional must submit a test file containing real or dummy clinical quality data extracted from the qualified electronic health record product selected by the eligible professional using a secure data submission method, as required by CMS.
(e)
(2)
(i) If an eligible professional, as identified by an individual NPI, has reassigned his or her Medicare billing rights to a TIN selected to participate in the electronic prescribing group practice reporting option for a program year, then for that program year the eligible professional must participate in the Electronic Prescribing Incentive Program via the group practice reporting option. For any program year in which the TIN is selected to participate in the Electronic Prescribing Incentive Program group practice reporting option, the eligible professional cannot individually qualify for an electronic prescribing incentive payment by meeting the requirements specified in paragraph (d) of this section.
(ii) If, for the program year, the eligible professional participates in the Electronic Prescribing Incentive Program under another TIN that is not selected to participate in the Electronic Prescribing Incentive Program group practice reporting option for that program year, then the eligible professional may individually qualify for an electronic prescribing incentive by meeting the requirements specified in paragraph (d) of this section under that TIN.
(f)
At 76 FR 54968, Sept. 6, 2011, § 414.92 was amended by revising paragraph (c)(2)(ii), effective October 6, 2011. For the convenience of the user, the revised text is set forth as follows:
(c) * * *
(2) * * *
(ii)
(A) The practice is located in a rural area without high speed internet access.
(B) The practice is located in an area without sufficient available pharmacies for electronic prescribing.
(C) Registration to participate in the Medicare or Medicaid EHR Incentive Program and adoption of Certified EHR Technology.
(D) Inability to electronically prescribe due to local, State or Federal law or regulation.
(E) Limited prescribing activity.
(F) Insufficient opportunities to report the eRx measure due to limitations of the measure's denominator.
This subpart implements fee schedules for PEN items and services as authorized by section 1842(s) of the Act.
(a)
(1) The actual charge for the item or service; or
(2) The fee schedule amount for the item or service, as determined in accordance with § 414.104.
(b)
(2) CMS designates the specific items and services in each category through program instructions.
(c)
(a)
(b)
(i) The reasonable charge from 1995; or
(ii) The reasonable charge that would have been used in determining payment for 2002.
This subpart implements sections 1834 (a) and (h) of the Act by specifying how payments are made for the purchase or rental of new and used durable medical equipment and prosthetic and orthotic devices for Medicare beneficiaries.
For purposes of this subpart, the following definitions apply:
(1) Group 2 power wheelchair with power options that can accommodate
(2) Group 3 power wheelchair.
(1) Can withstand repeated use;
(2) Is primarily and customarily used to serve a medical purpose;
(3) Generally is not useful to an individual in the absence of an illness or injury; and
(4) Is appropriate for use in the home. (See § 410.38 of this chapter for a description of when an institution qualifies as a home.)
(1) Devices that replace all or part of an internal body organ, including ostomy bags and supplies directly related to ostomy care, and replacement of such devices and supplies;
(2) One pair of conventional eyeglasses or contact lenses furnished subsequent to each cataract surgery with insertion of an intraocular lens; and
(3) Leg, arm, back, and neck braces, and artificial legs, arms, and eyes, including replacements if required because of a change in the beneficiary's physical condition.
(1) Parenteral and enteral nutrients, supplies, and equipment;
(2) Intraocular lenses;
(3) Medical supplies such as catheters, catheter supplies, ostomy bags, and supplies related to ostomy care that are furnished by an HHA as part of home health services under § 409.40(e) of this chapter;
(4) Dental prostheses.
(a)
(1) The actual charge for the item;
(2) The fee schedule amount for the item, as determined in accordance with the provisions of §§ 414.220 through 414.232.
(b)
(i) Inexpensive or routinely purchased items, as specified in § 414.220.
(ii) Items requiring frequent and substantial servicing, as specified in § 414.222.
(iii) Certain customized items, as specified in § 414.224.
(iv) Oxygen and oxygen equipment, as specified in § 414.226.
(v) Prosthetic and orthotic devices, as specified in § 414.228.
(vi) Other durable medical equipment (capped rental items), as specified in § 414.229.
(vii) Transcutaneous electrical nerve stimulators (TENS), as specified in § 414.232.
(2) CMS designates the items in each class of equipment or device through its program instructions.
(c)
(d)
(e)
(2)
(i) For the first 6-month period following the date on which the 36-month rental period ends in accordance with § 414.226(a)(1) of this subpart, no payments are made.
(ii) For each succeeding 6-month period, payment may be made during the first month of that period for 30 minutes of labor for routine maintenance and servicing of the equipment in the beneficiary's home (including an institution used as the beneficiary's home).
(iii) The supplier must visit the beneficiary's home (including an institution used as the beneficiary's home) to inspect the equipment during the first month of the 6-month period.
(3)
(i) Items requiring frequent and substantial servicing, as defined in § 414.222(a);
(ii) Capped rental items, as defined in § 414.229(a), that are not beneficiary-owned in accordance with § 414.229(d), § 414.229(f)(2), or § 414.229(h); and
(iii) Capped rental items, as defined in § 414.229(a), that are not beneficiary-owned in § 414.229(d), § 414.229(f)(2), or § 414.229(h); and
(iv) Oxygen equipment, as described in § 414.226.
(4)
(5)
(i) For the first 6-month period following the date on which the 36-month rental period ends in accordance with § 414.226(a)(1) of this subpart, no payments are made.
(ii) For each succeeding 6-month period, payment may be made during the first month of that period for routine maintenance and servicing of the equipment in the beneficiary's home (including an institution used as the beneficiary's home).
(iii) Payment for maintenance and servicing is made based on a reasonable fee not to exceed 10 percent of the purchase price for a stationary oxygen concentrator. This payment includes payment for maintenance and servicing of all oxygen equipment other than liquid or gaseous equipment (stationary or portable).
(iv) The supplier must visit the beneficiary's home (including an institution used as the beneficiary's home) to inspect the equipment during the first month of the 6-month period.
(f)
(1) The reasonable useful lifetime of DME or prosthetic and orthotic devices is determined through program instructions. In the absence of program instructions, carriers may determine the reasonable useful lifetime of equipment but in no case can it be less than 5 years. Computation is based on when the equipment is delivered to the beneficiary, not the age of the equipment.
(2) If the beneficiary elects to obtain replacement oxygen equipment, payment is made in accordance with § 414.226(a).
(3) If the beneficiary elects to obtain a replacement capped rental item, payment is made in accordance with § 414.229(a)(2) or (a)(3).
(4) For all other beneficiary-owned items, if the beneficiary elects to obtain replacement equipment, payment is made on a purchase basis.
(a)
(2)
(3)
(b)
(2) Effective January 1, 1994, payment for ostomy supplies, tracheostomy supplies, urologicals, and surgical dressings not furnished as incident to a physician's professional service or furnished by an HHA is made using the methodology for the inexpensive and routinely purchased class.
(3) The total amount of payments made for an item may not exceed the fee schedule amount recognized for the purchase of that item.
(c)
(1) The carrier determines the average reasonable charge for inexpensive or routinely purchased items that were furnished during the period July 1, 1986 through June 30, 1987 based on the mean of the carrier's allowed charges for the item. A separate determination of an average reasonable charge is made for rental equipment, new purchased equipment, and used purchased equipment.
(2) The carrier adjusts the amount determined under paragraph (c)(1) of this section by the change in the level of the CPI-U for the 6-month period ending December 1987.
(d)
(e)
(f)
(1) The 1991 national limited payment amount is equal to:
(i) 100 percent of the local payment amount if the local payment amount is neither greater than the weighted average nor less than 85 percent of the
(ii) The sum of 67 percent of the local payment amount plus 33 percent of the weighted average of all local payment amounts if the local payment amount exceeds the weighted average of all local payment amounts; or
(iii) The sum of 67 percent of the local payment amount plus 33 percent of 85 percent of the weighted average of all local payment amounts if the local payment amount is less than 85 percent of the weighted average of all local payment amounts.
(2) The 1992 national limited payment amount is equal to:
(i) 100 percent of the local payment amount if the local payment amount is neither greater than the weighted average nor less than 85 percent of the weighted average of all local payment amounts;
(ii) The sum of 33 percent of the local payment amount plus 67 percent of the weighted average of all local payment amounts if the local payment amount exceeds the weighted average; or
(iii) The sum of 33 percent of the local payment amount plus 67 percent of 85 percent of the weighted average of all local payment amounts if the local payment amount is less than 85 percent of the weighted average.
(3) For 1993, the national limited payment amount is equal to one of the following:
(i) 100 percent of the local payment amount if the local payment amount is neither greater than the weighted average nor less than 85 percent of the weighted average of all local payment amounts.
(ii) 100 percent of the weighted average of all local payment amounts if the local payment amount exceeds the weighted average of all local payment amounts.
(iii) 85 percent of the weighted average of all local payment amounts if the local payment amount is less than 85 percent of the weighted average of all local payment amounts.
(4) For 1994 and subsequent years, the national limited payment amount is equal to one of the following:
(i) If the local payment amount is not in excess of the median, nor less than 85 percent of the median, of all local payment amounts—100 percent of the local payment amount.
(ii) If the local payment amount exceeds the median—100 percent of the median of all local payment amounts.
(iii) If the local payment amount is less than 85 percent of the median—85 percent of the median of all local payment amounts.
(g)
(a)
(1) Ventilators (except those that are either continuous airway pressure devices or respiratory assist devices with bi-level pressure capability with or without a backup rate, previously referred to as “intermittent assist devices with continuous airway pressure devices”).
(2) Continuous and intermittent positive pressure breathing machines.
(3) Continuous passive motion machines.
(4) Other items specified in CMS program instructions.
(5) Other items identified by the carrier.
(b)
(c)
(1) The carrier determines the average reasonable charge for rental of items requiring frequent and substantial servicing that were furnished during the period July 1, 1986 through
(2) The carrier adjusts the amounts determined under paragraph (c)(1) of this section by the change in the level of the CPI-U for the 6-month period ending December 1987.
(d)
(e)
(a)
(b)
(a)
(2)
(b)
(i) Stationary oxygen equipment and oxygen contents (stationary and portable oxygen contents).
(ii) Portable oxygen equipment only.
(iii) Stationary and portable oxygen contents only.
(iv) Portable oxygen contents only.
(2) For 1989 and 1990, the monthly fee schedule amounts are the local payment amounts determined as follows:
(i) The carrier determines the base local average monthly payment rate equal to the total reasonable charges for the item for the 12-month period ending December 1986 divided by the total number of months for all beneficiaries receiving the item for the same period. In determining the local average monthly payment rate, the following limitations apply:
(A) Purchase charges for oxygen systems are not included as items classified under paragraph (b)(1)(i) of this section.
(B) Purchase charges for portable equipment are not included as items classified under paragraph (b)(1)(ii) of this section.
(ii) The carrier determines the local monthly payment amount equal to 0.95 times the base local average monthly payment amount adjusted by the
(3) For 1991 through 2006, the fee schedule amounts for items described in paragraphs (b)(1)(iii) and (iv) of this section are determined using the methodology contained in § 414.220(d), (e), and (f).
(4) For 1991 through 2006, the fee schedule amounts for items described in paragraphs (b)(1)(i) and (ii) of this section are determined using the methodology contained in § 414.220(d), (e), and (f).
(5) For 2005 and 2006, the fee schedule amounts determined under paragraph (b)(4) of this section are reduced using the methodology described in section 1834(a)(21)(A) of the Act.
(c)
(i) Stationary oxygen equipment (including stationary concentrators) and oxygen contents (stationary and portable).
(ii) Portable equipment only (gaseous or liquid tanks).
(iii) Oxygen generating portable equipment only.
(iv) Stationary oxygen contents only.
(v) Portable oxygen contents only.
(2) The national limited monthly payment rate for items described in paragraph (c)(1)(i) of this section is equal to the weighted average fee schedule amount established under paragraph (b)(5) of this section reduced by $1.44.
(3) The national limited monthly payment rate for items described in paragraph (c)(1)(ii) of this section is equal to the weighted average of the fee schedule amounts established under paragraph (b)(5) of this section.
(4) The national limited monthly payment rate for items described in paragraph (c)(1)(iii) of this section is equal to the national limited monthly payment rate established under paragraph (c)(5) of this section, multiplied by 24, and divided by 36.
(5) The national limited monthly payment rate for items described in paragraphs (c)(1)(iv) and (c)(1)(v) of this section is equal to 50 percent of the weighted average fee schedule amounts established under paragraph (b)(3) of this section for items described in paragraph (b)(1)(iii) of this section.
(6) Beginning in 2008, CMS makes an annual adjustment to the national limited monthly payment rates for each class of items described in paragraph (c)(1) of this section to ensure that such payment rates do not result in expenditures for any year that are more or less than the expenditures that would have been made if such classes had not been established.
(d)
(2) Subject to the limitation set forth in paragraph (e)(2) of this section, the fee schedule amount for items described in paragraphs (c)(1)(ii) and (c)(1)(iii) of this section is paid when the beneficiary rents portable oxygen equipment.
(3) The fee schedule amount for items described in paragraph (c)(1)(iv) of this section is paid when the beneficiary—
(i) Owns stationary oxygen equipment that requires delivery of gaseous or liquid oxygen contents; or
(ii) Rents stationary oxygen equipment that requires delivery of gaseous or liquid oxygen contents after the period of continuous use of 36 months described in paragraph (a)(1) of this section.
(4) The fee schedule amount for items described in paragraph (c)(1)(v) of this section is paid when the beneficiary—
(i) Owns portable oxygen equipment described in (c)(1)(ii) of this section;
(ii) Rents portable oxygen equipment described in paragraph (c)(1)(ii) of this section during the period of continuous use of 36 months described in paragraph (a)(1) of this section and does not rent stationary oxygen equipment; or
(iii) Rents portable oxygen equipment described in paragraph (c)(1)(ii) of this section after the period of continuous use of 36 months described in paragraph (a)(1) of this section.
(e)
(i) If the attending physician prescribes an oxygen flow rate exceeding four liters per minute, the fee schedule amount is increased by 50 percent, subject to the limit in paragraph (e)(2) of this section.
(ii) If the attending physician prescribes an oxygen flow rate of less than one liter per minute, the fee schedule amount is decreased by 50 percent.
(2) If portable oxygen equipment is used and the prescribed oxygen flow rate exceeds four liters per minute, the total fee schedule amount recognized for payment is limited to the higher of—
(i) The sum of the monthly fee schedule amount for the items described in paragraphs (c)(1)(i) and (c)(1)(ii) or (c)(1)(iii) of this section; or
(ii) The adjusted fee schedule amount described in paragraph (e)(1)(i) of this section.
(3) In establishing the volume adjustment for those beneficiaries whose physicians prescribe varying flow rates, the following rules apply:
(i) If the prescribed flow rate is different for stationary oxygen equipment than for portable oxygen equipment, the flow rate for the stationary equipment is used.
(ii) If the prescribed flow rate is different for the patient at rest than for the patient at exercise, the flow rate for the patient at rest is used.
(iii) If the prescribed flow rate is different for nighttime use and daytime use, the average of the two flow rates is used.
(f)
(i) Continue to furnish the equipment during any period of medical need for the remainder of the reasonable useful lifetime established for the equipment in accordance with § 414.210(f)(1); or
(ii) Arrange for furnishing the oxygen equipment with another supplier if the beneficiary relocates to an area that is outside the normal service area of the supplier that initially furnished the equipment.
(2) The supplier that furnishes liquid or gaseous oxygen equipment (stationary or portable) for the 36th continuous month during which payment is made under this section must—
(i) Continue to furnish the oxygen contents necessary for the effective use of the liquid or gaseous equipment during any period of medical need for the remainder of the reasonable useful lifetime established for the equipment in accordance with § 414.210(f)(1); or
(ii) Arrange for furnishing the oxygen contents with another supplier if the beneficiary relocates to an area that is outside the normal service area of the supplier that initially furnished the equipment.
(g)
(i) The item becomes subject to a competitive acquisition program implemented in accordance with section 1847(a) of the Act;
(ii) The beneficiary relocates to an area that is outside the normal service area of the supplier that initially furnished the equipment;
(iii) The beneficiary elects to obtain oxygen equipment from a different supplier prior to the expiration of the 36-month rental period; or
(iv) CMS or the carrier determines that an exception should apply in an individual case based on the circumstances.
(2) Oxygen equipment furnished under this section may not be replaced by the supplier prior to the expiration of the reasonable useful lifetime established for the equipment in accordance with § 414.210(f)(1) unless:
(i) The supplier replaces an item with the same, or equivalent, make and model of equipment because the item initially furnished was lost, stolen, irreparably damaged, is being repaired, or no longer functions;
(ii) A physician orders different equipment for the beneficiary. If the order is based on medical necessity, then the order must indicate why the equipment initially furnished is no longer medically necessary and the
(iii) The beneficiary chooses to obtain a newer technology item or upgraded item and signs an advanced beneficiary notice (ABN); or
(iv) CMS or the carrier determines that a change in equipment is warranted.
(3) Before furnishing oxygen equipment, the supplier must disclose to the beneficiary its intentions regarding whether it will accept assignment of all monthly rental claims for the duration of the rental period. A supplier's intentions could be expressed in the form of a written agreement between the supplier and the beneficiary.
(a)
(b)
(1) The carrier determines a base local purchase price equal to the average reasonable charge for items purchased during the period July 1, 1986 through June 30, 1987 based on the mean of the carrier's allowed charges for the item.
(2) The carrier determines a local purchase price equal to the following:
(i) For 1989 and 1990, the base local purchase price is adjusted by the change in the level of the CPI-U for the 6-month period ending December 1987.
(ii) For 1991 through 1993, the local purchase price for the preceding year is adjusted by the applicable percentage increase for the year. The applicable percentage increase is equal to 0 percent for 1991. For 1992 and 1993, the applicable percentage increase is equal to the percentage increase in the CPI-U for the 12-month period ending with June of the previous year.
(iii) For 1994 and 1995, the applicable percentage increase is 0 percent.
(iv) For all subsequent years the applicable percentage increase is equal to the percentage increase in the CPI-U for the 12-month period ending with June of the previous year.
(3) CMS determines the regional purchase price equal to the following:
(i) For 1992, the average (weighted by the relative volume of all claims among carriers) of the local purchase prices for the carriers in the region.
(ii) For 1993 and subsequent years, the regional purchase price for the preceding year adjusted by the applicable percentage increase for the year.
(4) CMS determines a purchase price equal to the following:
(i) For 1989, 1990 and 1991, 100 percent of the local purchase price.
(ii) For 1992, 75 percent of the local purchase price plus 25 percent of the regional purchase price.
(iii) For 1993, 50 percent of the local purchase price plus 50 percent of the regional purchase price.
(iv) For 1994 and subsequent years, 100 percent of the regional purchase price.
(5) For 1992 and subsequent years, CMS determines a national average purchase price equal to the unweighted average of the purchase prices determined under paragraph (b)(4) of this section for all carriers.
(6) CMS determines the fee schedule amount equal to 100 percent of the purchase price determined under paragraph (b)(4) of this section, subject to the following limitations:
(i) For 1992, the amount cannot be greater than 125 percent nor less than 85 percent of the national average purchase price determined under paragraph (b)(5) of this section.
(ii) For 1993 and subsequent years, the amount cannot be greater than 120 percent of the national average nor less than 90 percent of the national average purchase price determined under paragraph (b)(5) of this section.
(c)
(a)
(1) For items furnished prior to January 1, 2006, payment is made on a rental or purchase option basis in accordance with the rules set forth in paragraphs (b) through (e) of this section.
(2) For items other than power-driven wheelchairs furnished on or after January 1, 2006, payment is made in accordance with the rules set forth in paragraph (f) of this section.
(3) For power-driven wheelchairs furnished on or after January 1, 2006 through December 31, 2010, payment is made in accordance with the rules set forth in paragraphs (f) or (h) of this section.
(4) For power-driven wheelchairs that are not classified as complex rehabilitative power-driven wheelchairs, furnished on or after January 1, 2011, payment is made in accordance with the rules set forth in paragraph (f) of this section.
(5) For power-driven wheelchairs classified as complex rehabilitative power-driven wheelchairs, furnished on or after January 1, 2011, payment is made in accordance with the rules set forth in paragraphs (f) or (h) of this section.
(b)
(2) For 1991 and subsequent years, the monthly fee schedule amount for rental of other covered durable medical equipment equals 10 percent of the purchase price recognized as determined under paragraph (c) of this section for each of the first 3 months and 7.5 percent of the purchase price for each of the remaining months.
(3) For power-driven wheelchairs furnished on or after January 1, 2011, the monthly fee schedule amount for rental equipment equals 15 percent of the purchase price recognized as determined under paragraph (c) of this section for each of the first 3 months and 6 percent of the purchase price for each of the remaining months.
(c)
(1) For
(ii) The purchase price is equal to the base local purchase price adjusted by the change in the level of the CPI-U for the 6-month period ending December 1987.
(2) For
(ii) The purchase price for 1991 is the national limited payment amount as determined using the methodology contained in § 414.220(f).
(3)
(d)
(1) Suppliers must offer beneficiaries the option of purchasing power-driven wheelchairs at the time the supplier first furnishes the item. On or after January 1, 2011, this option is available only for complex rehabilitative power-
(2) Suppliers must offer beneficiaries the option of converting capped rental items (including power-driven wheelchairs not purchased when initially furnished) to purchased equipment during their 10th continuous rental month. Beneficiaries have one month from the date the supplier makes the offer to accept the purchase option.
(i) If the beneficiary does not accept the purchase option, payment continues on a rental basis not to exceed a period of continuous use of longer than 15 months. After 15 months of rental payments have been paid, the supplier must continue to provide the item without charge, other than a charge for maintenance and servicing fees, until medical necessity ends or Medicare coverage ceases. A period of continuous use is determined under the provisions in § 414.230.
(ii) If the beneficiary accepts the purchase option, payment continues on a rental basis not to exceed a period of continuous use of longer than 13 months. On the first day after 13 continuous rental months during which payment is made, the supplier must transfer title to the equipment to the beneficiary.
(e)
(2) Payment of the fee for maintenance and servicing of other durable medical equipment that is rented is made only for equipment that continues to be used after 15 months of rental payments have been made and is limited to the following:
(i) For the first 6-month period, no payments are to be made.
(ii) For each succeeding 6-month period, payment may be made during the first month of that period.
(3) Payment for maintenance and servicing DME purchased in accordance with paragraphs (d)(1) and (d)(2)(ii) of this section, is made on the basis of reasonable and necessary charges.
(f)
(2) The supplier must transfer title to the item to the beneficiary on the first day that begins after the 13th continuous month in which payments are made under paragraph (f)(1) of this section.
(3) Payment for maintenance and servicing of beneficiary-owned equipment is made in accordance with § 414.210(e).
(g)
(i) The item becomes subject to a competitive acquisition program implemented in accordance with section 1847(a) of the Act;
(ii) The beneficiary relocates to an area that is outside the normal service area of the supplier that initially furnished the equipment;
(iii) The beneficiary elects to obtain the equipment from a different supplier prior to the expiration of the 13-month rental period; or
(iv) CMS or the carrier determines that an exception should apply in an individual case based on the circumstances.
(2) A capped rental item furnished under this section may not be replaced by the supplier prior to the expiration of the 13-month rental period unless:
(i) The supplier replaces an item with the same, or equivalent, make and model of equipment because the item
(ii) A physician orders different equipment for the beneficiary. If the need for different equipment is based on medical necessity, then the order must indicate why the equipment initially furnished is no longer medically necessary and the supplier must retain this order in the beneficiary's medical record;
(iii) The beneficiary chooses to obtain a newer technology item or upgraded item and signs an advanced beneficiary notice (ABN); or
(iv) CMS or the carrier determines that a change in equipment is warranted.
(3) Before furnishing a capped rental item, the supplier must disclose to the beneficiary its intentions regarding whether it will accept assignment of all monthly rental claims for the duration of the rental period. A supplier's intentions could be expressed in the form of a written agreement between the supplier and the beneficiary.
(4) No later than two months before the date on which the supplier must transfer title to a capped rental item to the beneficiary, the supplier must disclose to the beneficiary whether it can maintain and service the item after the beneficiary acquires title to it. CMS or its carriers may make exceptions to this requirement on a case-by-case basis.
(h)
(2) Payment is made on a lump-sum purchase basis if the beneficiary chooses this option.
(3) On or after January 1, 2011, this option is available only for complex rehabilitative power-driven wheelchairs.
(a)
(b)
(2) In the case of a beneficiary receiving oxygen equipment on December 31, 2005, the period of continuous use for the equipment begins on January 1, 2006.
(c)
(2) An interruption of not longer than 60 consecutive days plus the days remaining in the rental month in which use ceases is temporary, regardless of the reason for the interruption.
(3) Unless there is a break in medical necessity that lasts lnnger than 60 consecutive days plus the days remaining in the rental month in which use ceases, medical necessity is presumed to continue.
(d)
(1) A new prescription.
(2) New medical necessity documentation.
(3) A statement describing the reason for the interruption and demonstrating that medical necessity in the prior episode ended.
(e)
(f)
(2) A new period of continuous use does not begin when a beneficiary
(g)
(h)
(a)
(1) Effective April 1, 1990—the original payment amount is reduced by 15 percent.
(2) Effective January 1, 1991—the reduced payment amount in paragraph (a)(1) is reduced by 15 percent.
(3) Effective January 1, 1994—the reduced payment amount in paragraph (a)(1) is reduced by 45 percent.
(b)
This subpart sets forth criteria and procedures for payment of the following services furnished to ESRD patients:
(a) Physician services related to renal dialysis.
(b) Physician services related to renal transplantation.
(c) Home dialysis equipment, supplies, and support services.
(d) Epoetin (EPO) furnished by a supplier of home dialysis equipment and supplies to a home dialysis patient for use in the home.
(a)
(b)
(i) Outpatient maintenance dialysis patients who dialyze—
(A) In an independent or hospital-based ESRD facility, or
(B) At home.
(ii) Hospital inpatients for which the physician elects to continue payment under the monthly capitation payment (MCP) method described in § 414.314.
(2)
(c)
(1) They are personally furnished by a physician to an individual patient.
(2) They contribute directly to the diagnosis or treatment of an individual patient.
(3) They ordinarily must be performed by a physician.
(d)
(1) Visits to the patient during dialysis, and review of laboratory test results, nurses' notes and any other medical documentation, as a basis for—
(i) Adjustment of the patient's medication or diet, or the dialysis procedure;
(ii) Prescription of medical supplies; and
(iii) Evaluation of the patient's psychosocial status and the appropriateness of the treatment modality.
(2) Medical direction of staff in delivering services to a patient during a dialysis session.
(3) Pre-dialysis and post-dialysis examinations, or examinations that could have been furnished on a pre-dialysis or post-dialysis basis.
(4) Insertion of catheters for patients who are on peritoneal dialysis and do not have indwelling catheters.
(e)
(a)
(b)
(2) The carrier pays the physician or the beneficiary (as appropriate) under the reasonable charge criteria set forth in subpart E of part 405 of this chapter for the following services:
(i) Physician services that must be furnished at a time other than during
(ii) Physician surgical services other than insertion of catheters for patients who are on peritoneal dialysis and do not have indwelling catheters.
(iii) Physician services furnished to hospital inpatients who were not admitted solely to receive maintenance dialysis.
(iv) Administration of hepatitis B vaccine.
(c)
(2) The initial method of payment applies to dialysis services furnished beginning with the second calendar month after the month in which all physicians in the facility elect the initial method and continues until the effective date of a termination of the election described in paragraph (d) of this section.
(d)
(2) If the notice terminating the initial method is received by the carrier(s) and intermediary—
(i) On or before November 1, the effective date of the termination is January 1 of the year following the calendar year in which the termination notice is received by the carrier(s) and intermediary; or
(ii) After November 1, the effective date of the termination is January 1 of the second year after the calendar year in which the notice is received by the carrier(s) and intermediary.
(e)
(f)
(a)
(2) The carrier pays the MCP amount, subject to the deductible and coinsurance provisions, either to the physician if the physician accepts assignment or to the beneficiary if the physician does not accept assignment.
(3) The MCP method recognizes the need of maintenance dialysis patients for physician services furnished periodically over relatively long periods of time, and the capitation amounts are consistent with physicians' charging patterns in their localities.
(4) Payment of the capitation amount for any particular month is contingent upon the physician furnishing to the patient all physician services required by the patient during the month, except those listed in paragraph (b) of this section.
(5) Payment for physician administrative services (§ 414.310) is made to the dialysis facility as part of the facility's composite rate (part 413, subpart H of this subchapter) and not to the physician under the MCP.
(b)
(i) Administration of hepatitis B vaccine.
(ii) Covered physician services furnished by another physician when the patient is not available to receive, or
(iii) Covered physician services furnished to hospital inpatients, including services related to inpatient dialysis, by a physician who elects not to continue to receive the MCP during the period of inpatient stay.
(iv) Surgical services, including declotting of shunts, other than the insertion of catheters for patients on maintenance peritoneal dialysis who do not have indwelling catheters.
(v) Needed physician services that are—
(A) Furnished by the physician furnishing renal care or by another physician;
(B) Not related to the treatment of the patient's renal condition; and
(C) Not furnished during a dialysis session or an office visit required because of the patient's renal condition.
(2) For the services described in paragraph (b)(1)(v) of this section, the following rules apply:
(i) The physician must provide documentation to show that the services are not related to the treatment of the patient's renal condition and that additional visits are required.
(ii) The carrier's medical staff, acting on the basis of the documentation and appropriate medical consultation obtained by the carrier, determines whether additional payment for the additional services is warranted.
(3) The MCP is reduced in proportion to the number of days the patient is—
(i) Hospitalized and the physician elects to bill separately for services furnished during hospitalization; or
(ii) Not attended by the physician or his or her substitute for any reason, including when the physician is not available to furnish patient care or when the patient is not available to receive care.
(c)
(a) For each patient, the carrier pays a flat amount that covers all physician services required to create the capacity for self-dialysis and home dialysis.
(b) CMS determines the amount on the basis of program experience and reviews it periodically.
(c) The payment is made at the end of the training course, is subject to the deductible and coinsurance provisions, and is in addition to any amounts payable under the initial or MCP methods set forth in §§ 414.313 and 414.314, respectively.
(d) If the training is not completed, the payment amount is proportionate to the time spent in training.
(a)
(2) Additional sums, in amounts established on the basis of program experience, may be included in the comprehensive payment for other surgery performed concurrently with the transplant operation.
(3) The amount of the comprehensive payment may not exceed the lower of the following:
(i) The actual charges made for the services.
(ii) Overall national payment levels established under the ESRD program and adjusted to give effect to variations in physician's charges throughout the nation. (These adjusted amounts are the maximum allowances in a carrier's service area for renal transplantation surgery and related services by surgeons.)
(4) Maximum allowances computed under these instructions are revised at the beginning of each calendar year to
(i) Changes in the economic index as described in § 405.504(a)(3)(i) of this chapter.
(ii) Percentage changes in the weighted average of the carrier's prevailing charges (before adjustment by the economic index) for—
(A) A unilateral nephrectomy; or
(B) Another medical or surgical service designated by CMS for this purpose.
(b)
(a)
(2)
(i) The patient elects to obtain home dialysis equipment and supplies from a supplier that is not a Medicare approved dialysis facility.
(ii) The patient certifies to CMS that he or she has only one supplier for all home dialysis equipment and supplies. This certification is made on CMS Form 382 (the “ESRD Beneficiary Selection” form).
(iii) In writing, the supplier—
(A) Agrees to receive Medicare payment for home dialysis supplies and equipment only on an assignment-related basis; and
(B) Certifies to CMS that it has a written agreement with one Medicare approved dialysis facility or, if the beneficiary is also entitled to military or veteran's benefits, one military or Veterans Administration hospital, for each patient. (See part 494 of this chapter for the requirements for a Medicare approved dialysis facility.) Under the agreement, the facility or military or VA hospital agrees to the following:
(
(
(
(
(
(
(
(iv) The facility with which the agreement is made must be located within a reasonable distance from the patient's home (that is, located so that the facility can actually furnish the needed services in a practical and timely manner, taking into account variables like the terrain, whether the patient's home is located in an urban or rural area, the availability of transportation, and the usual distances traveled by patients in the area to obtain health care services).
(C) Agrees to report to the ESRD facility providing support services, at least every 45 days, all data (meaning information showing what supplies and services were provided to the patient and when each was provided) for each patient regarding services and items furnished to the patient in accordance with § 494.100(c)(2) of this chapter.
(b)
(2)
(i) For support services furnished by a hospital-based ESRD facility, Medicare pays on a reasonable cost basis in accordance with part 413 of this chapter.
(ii) For support services furnished by an independent ESRD facility, Medicare pays on the basis of reasonable charges that are related to costs and allowances that are reasonable when the services are furnished in an effective and economical manner.
(c) Payment limits for support services, equipment and supplies, and notification of changes to the payment limits apply prior to January 1, 2011 as follows:
(1)
(2)
(3)
(a) Prior to January 1, 2011, payment for EPO used at home by a home dialysis patient is made only to either a Medicare approved ESRD facility or a supplier of home dialysis equipment and supplies. Effective January 1, 2011, payment for EPO used at home by a
(b) After January 1, 2011, a home and self training amount is added to the per treatment base rate for adult and pediatric patients as defined in § 413.230
This subpart implements competitive bidding programs for certain DMEPOS items as required by sections 1847(a) and (b) of the Act.
For purposes of this subpart, the following definitions apply:
(1) The date that is 30 days before the final date for the closing of the bid window; or
(2) The date that is 30 days after the opening of the bid window.
(1) An inexpensive or routinely purchased item described in § 414.220 of this part.
(2) An item requiring frequent and substantial servicing, as described in § 414.222 of this part.
(3) Oxygen and oxygen equipment described in § 414.226 of this part.
(4) Other DME described in § 414.229 of this part.
(1) Durable medical equipment (DME) other than class III devices under the Federal Food, Drug and Cosmetic Act, as defined in § 414.202 of this part and group 3 complex rehabilitative wheelchairs and further classified into the following categories:
(i) Inexpensive or routinely purchased items, as specified in § 414.220(a).
(ii) Items requiring frequent and substantial servicing, as specified in § 414.222(a).
(iii) Oxygen and oxygen equipment, as specified in § 414.226(c)(1).
(iv) Other DME (capped rental items), as specified in § 414.229.
(2) Supplies necessary for the effective use of DME other than inhalation drugs.
(3) Enteral nutrients, equipment, and supplies.
(4) Off-the-shelf orthotics, which are orthotics described in section 1861(s)(9) of the Act that require minimal self-adjustment for appropriate use and do not require expertise in trimming, bending, molding, assembling or customizing to fit a beneficiary.
(a)
(b)
(i) The items furnished are limited to crutches, canes, walkers, folding manual wheelchairs, blood glucose monitors, and infusion pumps that are DME, and off-the-shelf (OTS) orthotics.
(ii) The items are furnished by the physician or treating practitioner to his or her own patients as part of his or her professional service or by a hospital to its own patients during an admission or on the date of discharge.
(iii) The items are billed under a billing number assigned to the hospital, physician, the treating practitioner (if possible), or a group practice to which the physician or treating practitioner has reassigned the right to receive Medicare payment.
(2) A physical therapist in private practice (as defined in § 410.60(c) of this chapter) or an occupational therapist in private practice (as defined in § 410.59(c) of this chapter) may furnish competitively bid off-the-shelf orthotics without submitting a bid and being awarded a contract under this subpart, provided that the items are furnished only to the therapist's own patients as part of the physical or occupational therapy service.
(3) Payment for items furnished in accordance with paragraphs (b)(1) and (b)(2) of this section will be paid in accordance with § 414.408(a).
(a)
(b)
(c)
(d)
(e)
(a)
(2) If an item that is included in a competitive bidding program is furnished to a beneficiary who does not maintain a permanent residence in a CBA, the payment basis for the item is 80 percent of the lesser of the actual charge for the item, or the applicable fee schedule amount for the item, as determined under subpart C or subpart D.
(b)
(c)
(d)
(e)
(2)
(ii) Medicare may make a secondary payment for an item furnished by a noncontract supplier that the beneficiary is required to use under his or her primary insurance policy. The provisions of this paragraph do not supersede Medicare secondary payer statutory and regulatory provisions, including the Medicare secondary payment rules located in §§ 411.32 and 411.33 of this subchapter, and payment will be calculated in accordance with those rules.
(iii) If a beneficiary is outside of the CBA in which he or she maintains a permanent residence, he or she may obtain an item from a—
(A) Contract supplier, if the beneficiary obtains the item in another CBA and the item is included in the competitive bidding program for that CBA; or
(B) Supplier with a valid Medicare billing number, if the beneficiary obtains the item in an area that is not a CBA, or if the beneficiary obtains the item in another CBA but the item is not included in the competitive bidding program for that CBA.
(iv) A physician, treating practitioner, physical therapist in private practice, occupational therapist in private practice, or hospital may furnish an item in accordance with § 414.404(b) of this subpart.
(3) Unless paragraph (e)(2) of this section applies:
(i) Medicare will not make payment for an item furnished in violation of paragraph (e)(1) of this section, and
(ii) A beneficiary has no financial liability to a noncontract supplier that furnishes an item included in the competitive bidding program for a CBA in violation of paragraph (e)(1) of this section, unless the beneficiary has signed an advanced beneficiary notice.
(4) CMS separately designates the Medicare billing number of all noncontract suppliers to monitor compliance with paragraphs (e)(1) and (e)(2) of this section.
(f)
(2) Payment for used purchased durable medical equipment and enteral nutrition equipment is made in an amount equal to 75 percent of the single payment amounts calculated for new purchased equipment under paragraph (f)(1) of this section.
(g)
(1) Supplies used in conjunction with durable medical equipment.
(2) Enteral nutrients.
(3) Enteral nutrition supplies.
(4) OTS orthotics.
(h)
(2) For contracts entered into beginning on or after January 1, 2011, the monthly fee schedule amount for rental of power wheelchairs equals 15 percent of the single payment amounts calculated for new durable medical equipment under paragraph (f)(1) of this section for each of the first 3 months, and 6 percent of the single payment amounts calculated for these items for each of the remaining months 4 through 13.
(3)
(ii) Medicare does not make payment to a contract supplier under paragraph (h)(3)(i) of this section if the contract supplier furnishes capped rental durable medical equipment to a beneficiary who previously rented the equipment from another contract supplier.
(4)
(5)
(6)
(7)
(8)
(ii)
(i)
(2)
(A) If Medicare made 26 or less monthly payments to the former supplier, Medicare makes a monthly payment to the contract supplier for up to the number of months equal to the difference between 36 and the number of months for which payment was made to the former supplier.
(B) If Medicare made 27 or more monthly payments to the former supplier, Medicare makes 10 monthly payments to the contract supplier.
(ii) Payment is made using the methodology described in paragraph (i)(1) of this section. On the first day after the month in which the final rental payment is made under paragraph (i)(2)(i) of this section, the contract supplier must transfer title of the oxygen equipment to the beneficiary.
(iii) Medicare does not make payment to a contract supplier under paragraph (i)(2) of this section if the contract supplier furnishes oxygen equipment to a beneficiary who previously rented the equipment from another contract supplier.
(j)
(ii) A supplier that elects to be a grandfathered supplier must continue to furnish the grandfathered items to all beneficiaries who elect to continue receiving the grandfathered items from that supplier for the remainder of the rental period for that item.
(2)
(i) For inexpensive and routinely purchased items described in § 414.220(a), payment is made in the amount determined under § 414.220(b).
(ii) For other durable medical equipment or capped rental items described in § 414.229, payment is made in the amount determined under § 414.229(b).
(iii) For items requiring frequent and substantial servicing described in § 414.222, payment is made in accordance with paragraph (a)(1) of this section.
(iv) For oxygen and oxygen equipment described in § 414.226(c)(1), payment is made in accordance with paragraph (a)(1) of this section.
(3)
(4)
(ii) A beneficiary who is otherwise entitled to obtain a grandfathered item from a grandfathered supplier under paragraph (j) of this section may elect to obtain the same item from a contract supplier at any time after a competitive bidding program is implemented.
(iii) If a beneficiary elects to obtain the same item from a contract supplier, payment is made for the item accordance with paragraph (a)(1) of this section.
(5)
(
(
(
(
(
(
(
(B)
(C)
(
(
(D)
(
(
(
(
(ii)
(A) State that the supplier agrees to continue to furnish certain rented DME, oxygen and oxygen equipment that it is currently furnishing to beneficiaries (that is, before the start of the competitive bidding program) in a CBA and will continue to provide these items to these beneficiaries for the remaining months of the rental period.
(B) Include the following information:
(
(
(
(C) State that the supplier agrees to meet all the terms and conditions pertaining to grandfathered suppliers.
(D) Be provided by the supplier to CMS in writing at least 30 business days before the start date of the implementation of the Medicare DMEPOS Competitive Bidding Program.
(6)
(ii)
(iii)
(A) State that, for those items for which the supplier has decided not to be a grandfathered supplier, the supplier will only continue to rent these competitively bid item(s) to its beneficiaries up to the first anniversary date that occurs after the start of the Medicare DMEPOS Competitive Bidding Program.
(B) State that the beneficiary must select a contract supplier for Medicare to continue to pay for these items.
(C) Refer the beneficiary to the contract supplier locator tool on and to 1-800-MEDICARE to obtain information
(iv)
(B) Under no circumstance should a supplier pick up a rented item prior to the supplier's receiving acknowledgement from the beneficiary that the beneficiary is aware of the date on which the supplier is picking up the item and the beneficiary has made arrangements to have the item replaced on that date by a contract supplier.
(C) When a beneficiary chooses to switch to a new contract supplier, the current noncontract supplier and the new contract supplier must make arrangements that are agreeable to the beneficiary.
(D) The contract supplier cannot submit a claim with a date of delivery for the new equipment that is prior to the first anniversary date that occurs after the beginning of the CBP.
(7)
(k)
(i) Payment for labor is made in accordance with § 414.210(e)(1) of subpart D.
(ii) Payment for parts that are not items (as defined in § 414.402) is made in accordance with § 414.210(e)(1) of subpart D.
(iii) Payment for parts that are items (as defined in § 414.402) is made in accordance with paragraph (a)(1) of this section.
(2) Additional payments are made in accordance with § 414.210(e)(2), (e)(3) and (e)(5) of this part for the maintenance and servicing of oxygen equipment if performed by a contract supplier or a noncontract supplier having a valid Medicare billing number.
(3) Beneficiaries must obtain a replacement of a beneficiary-owned item, other than parts needed for the repair of beneficiary-owned equipment from a contract supplier. Payment is made for the replacement item in accordance with paragraph (a)(1) of this section.
(a)
(1) In CY 2009, in Cincinnati—Middletown (Ohio, Kentucky and Indiana), Cleveland—Elyria—Mentor (Ohio), Charlotte—Gastonia—Concord (North Carolina and South Carolina), Dallas—Fort Worth—Arlington (Texas), Kansas City (Missouri and Kansas), Miami—Fort Lauderdale—Miami Beach (Florida), Orlando (Florida), Pittsburgh (Pennsylvania), and Riverside—San Bernardino—Ontario (California).
(2) In CY 2011, in an additional 91 MSAs (the additional 70 MSAs selected by CMS as of June 1, 2008, and the next 21 largest MSAs by total population based on 2009 population estimates, and not already phased in as of June 1, 2008). CMS may subdivide any of the 91 MSAs with a population of greater than 8,000,000 into separate CBAs, thereby resulting in more than 91 CBAs.
(3) After CY 2011, additional CBAs (or, in the case of national mail order for items and services, after CY 2010).
(4) For competitions (other than for national mail order items and services) after CY 2011 and prior to CY 2015, the following areas are excluded:
(i) Rural areas.
(ii) MSAs not selected under paragraphs (a)(1) or (a)(2) of this section with a population of less than 250,000.
(iii) An area with low population density within an MSA not selected under paragraphs (a)(1) or (a)(2) of this section.
(b)
(1) The total population of an MSA.
(2) The Medicare allowed charges for DMEPOS items per fee-for-service beneficiary in an MSA.
(3) The total number of DMEPOS suppliers per fee-for-service beneficiary who received DMEPOS items in an MSA.
(4) An MSA's geographic location.
(c)
(1) Low utilization of DMEPOS items by Medicare beneficiaries receiving fee-for-service benefits relative to similar geographic areas;
(2) Low number of DMEPOS suppliers relative to similar geographic areas; or
(3) Low number of Medicare fee-for-service beneficiaries relative to similar geographic areas.
(d)
(2) Beginning after CY 2009, CMS may designate through program instructions or by other means a nationwide CBA or one or more regional CBAs for purposes of implementing competitive bidding programs for items that are furnished through the mail by nationwide or regional mail order contract suppliers.
(a)
(b)
(a)
(b)
(2) The bids submitted for each item in a product category cannot exceed the payment amount that would otherwise apply to the item under Subpart C or Subpart D of this part.
(c)
(d)
(e) Commonly-owned or controlled suppliers. (1) For purposes of this paragraph—
(i) An ownership interest is the possession of equity in the capital, stock or profits of another supplier;
(ii) A controlling interest exists if one or more of owners of a supplier is an officer, director or partner in another supplier; and
(iii) Two or more suppliers are commonly-owned if one or more of them has an ownership interest totaling at least 5 percent in the other(s).
(2) A supplier must disclose in its bid each supplier in which it has an ownership or controlling interest and each supplier which has an ownership or controlling interest in it.
(3) Commonly-owned or controlled suppliers must submit a single bid to furnish a product category in a CBA. Each commonly-owned or controlled supplier that is located in the CBA for which the bid is being submitted must be included in the bid. The bid must also include any commonly-owned or controlled supplier that is located outside of the CBA but would furnish the product category to the beneficiaries who maintain a permanent residence in the CBA.
(f)
(2) Suppliers that submit one or more bids under paragraph (f)(1) of this section may submit the same bid amount for each item under each competitive bidding program for which it submits a bid.
(g)
(1) A CBA, if the supplier is awarded a contract under this subpart; or
(2) An area not designated as a CBA.
(a)
(b)
(2) Each supplier must disclose information about any prior or current legal actions, sanctions, revocations from the Medicare program, program-related convictions as defined in section 1128(a)(1) through (a)(4) of the Act, exclusions or debarments imposed against it, or against any members of the board of directors, chief corporate officers, high-level employees, affiliated companies, or subcontractors, by any Federal, State, or local agency. The supplier must certify in its bid that this information is completed and accurate.
(3) Each supplier must have all State and local licenses required to perform the services identified in the request for bids.
(4) Each supplier must submit a bona fide bid that complies with all the terms and conditions contained in the request for bids.
(5) Each network must meet the requirements specified in § 414.418.
(c)
(d)
(2)
(A) The date that is 30 days before the final date for the closing of the bid window; or
(B) The date that is 30 days after the opening of the bid window.
(ii)
(B)
(iii)
(e)
(1) Calculating the expected beneficiary demand in the CBA for the items in the product category;
(2) Calculating the total supplier capacity that would be sufficient to meet the expected beneficiary demand in the CBA for the items in the product category;
(3) Establishing a composite bid for each supplier and network that submitted a bid for the product category.
(4) Arraying the composite bids from the lowest composite bid price to the highest composite bid price;
(5) Calculating the pivotal bid for the product category;
(6) Selecting all suppliers and networks whose composite bids are less than or equal to the pivotal bid for that product category, and that meet the requirements in paragraphs (b) through (d) of this section.
(f)
(g)
(i) Setting a target number for small supplier participation by multiplying 30 percent by the number of suppliers that meet the requirements in paragraphs (b) through (d) of this section and whose composite bids are equal to or lower than the pivotal bid calculated for the product category;
(ii) Identifying the number of qualified small suppliers whose composite bids are at or below the pivotal bid for the product category;
(iii) Selecting additional small suppliers whose composite bids are above the pivotal bid for the product category in ascending order based on the proximity of each small supplier's composite bid to the pivotal bid, until the number calculated in paragraph (g)(1)(i) of this section is reached or there are no more composite bids submitted by small suppliers for the product category.
(2) The bids by small suppliers that are selected under paragraph (g)(1)(iii) of this section are not used to calculate the single payment amounts for any items under § 414.416 of this subpart.
(h)
(2) CMS will award at least two contracts, if there are less than five suppliers meeting these requirements and the suppliers satisfying these requirements have sufficient capacity to satisfy beneficiary demand for the product category calculated under paragraph (e)(1) of this section.
(3) The provisions of paragraph (h)(1) of this section do not apply to regional or nationwide mail order CBAs under § 414.410(d)(2) of this subpart.
(i)
(i) Referring to the arrayed list of suppliers that submitted bids for the product category included in the competitive bidding program for which beneficiary demand is not being met; and
(ii) Beginning with the supplier whose composite bid is the first composite bid above the pivotal bid for that product category, determining if that supplier is willing to become a contract supplier under the same terms and conditions that apply to other contract suppliers in the CBA.
(2) Before CMS awards additional contracts under paragraph (i)(1) of this section, a supplier must submit updated information demonstrating that the supplier meets the requirements under paragraphs (b) through (d) of this section.
(a)
(b)
(2) The single payment amount for an item must be less than or equal to the amount that would otherwise be paid for the same item under subpart C or subpart D.
(a) A network may be comprised of at least 2 but not more than 20 small suppliers.
(b) The following rules apply to networks that seek contracts under this subpart:
(1) Each network must form a single legal entity that acts as the bidder and submits the bid. Any agreement entered into for purposes of forming a network must be submitted to CMS. The network must identify itself as a network and identify all of its members.
(2) Each member of the network must satisfy the requirements in § 414.414(b) through (d).
(3) A small supplier may join one or more networks but cannot submit an individual bid to furnish the same product category in the same CBA as any network in which it is a member. A small supplier may not be a member of more than one network if those networks submit bids to furnish the same product category in the same CBA.
(4) The network cannot be anticompetitive, and this section does not supersede any Federal law or regulation that regulates anticompetitive behavior.
(5) A bid submitted by a network must include a statement from each network member certifying that the network member joined the network because it is unable independently to furnish all of the items in the product category for which the network is submitting a bid to beneficiaries throughout the entire geographic area of the CBA.
(6) At the time that a network submits a bid, the network's total market share for each product category that is the subject of the network's bid cannot exceed 20 percent of the Medicare demand for that product category in the CBA.
(c) If the network is awarded a contract, each supplier must submit its own claims and will receive payment directly from Medicare for the items that it furnishes under the competitive bidding program.
(a)
(2) When a physician or treating practitioner prescribes a particular brand or mode of delivery of an item under paragraph (a)(1) of this section, the physician or treating practitioner must document the reason in the beneficiary's medical record why the particular brand or mode of delivery is medically necessary to avoid an adverse medical outcome.
(b)
(1) Furnish the particular brand or mode of delivery as prescribed by the physician or treating practitioner;
(2) Consult with the physician or treating practitioner to find an appropriate alternative brand of item or mode of delivery for the beneficiary and obtain a revised written prescription from the physician or treating practitioner; or
(3) Assist the beneficiary in locating a contract supplier that can furnish the particular brand of item or mode of delivery prescribed by the physician or treating practitioner.
(c)
(d)
(a)
(b)
(c)
(d)
(2) CMS may award a contract to an entity that merges with, or acquires, a contract supplier if—
(i) The successor entity meets all requirements applicable to contract suppliers for the applicable competitive bidding program;
(ii) The successor entity submits to CMS the documentation described under § 414.414(b) through (d) if that documentation has not previously been submitted by the successor entity or the contract supplier that is being acquired, or is no longer current. This documentation must be submitted within 30 days prior to the anticipated effective date of the change of ownership. A successor entity is not required to duplicate previously submitted information if the previously submitted information is still current;
(iii) The successor entity is acquiring the assets of the existing contract supplier, it submits to CMS, at least 30 days before the anticipated effective date of the change of ownership, a signed novation agreement acceptable to CMS stating that it will assume all obligations under the contract; or
(iv) A new entity will be formed as a result of the merger or acquisition, the existing contract supplier submits to CMS, at least 30 days before the anticipated effective date of the change of ownership, its final draft of a novation agreement as described in paragraph
(e)
(1) A contract supplier must agree to furnish items under its contract to any beneficiary who maintains a permanent residence in, or who visits, the CBA and who requests those items from that contract supplier.
(2) A skilled nursing facility defined under section 1819(a) of the Act or a nursing facility defined under section 1919(a) of the Act that has elected to furnish items only to its own residents and that is also a contract supplier may furnish items under a competitive bidding program to its own patients to whom it would otherwise furnish Part B services.
(3) Contract suppliers for diabetic testing supplies must furnish the brand of diabetic testing supplies that work with the home blood glucose monitor selected by the beneficiary. The contract supplier is prohibited from influencing or incentivizing the beneficiary by persuading, pressuring, or advising them to switch from their current brand or for new beneficiaries from their preferred brand of glucose monitor and testing supplies. The contract supplier may not furnish information about alternative brands to the beneficiary unless the beneficiary requests such information.
(f)
(i) Each subcontracting arrangement that the supplier has in furnishing items and services under the contract.
(ii) Whether each subcontractor meets the requirement of section 1834(a)(20)(F)(i) of the Act if applicable to such subcontractor.
(2)
(i) The subcontracting arrangement that the supplier has in furnishing items and services under the contract.
(ii) Whether the subcontractor meets the requirement of section 1834(a)(20)(F)(i) of the Act, if applicable to such subcontractor.
(g)
(2) In the event a contract supplier breaches its contract, CMS may take one or more of the following actions:
(i) Require the contract supplier to submit a corrective action plan;
(ii) Suspend the contract supplier's contract;
(iii) Terminate the contract;
(iv) Preclude the contract supplier from participating in the competitive bidding program;
(v) Revoke the supplier number of the contract supplier; or
(vi) Avail itself of other remedies allowed by law.
This section implements an appeals process for suppliers that CMS has determined are in breach of their Medicare DMEPOS Competitive Bidding Program contracts and where CMS has taken action to terminate the supplier's contract. Except as specified in this regulation termination decisions made under this section are final and binding.
(a)
(b)
(2)
(i) The reasons for the termination.
(ii) The right to request a hearing by a CBIC Hearing Officer, and depending on the nature of the breach, the supplier may also be allowed to submit a CAP in lieu of requesting a hearing by a CBIC Hearing Officer, as specified in paragraph (c)(1)(i) of this section.
(iii) The address to which the written request for a hearing must be mailed.
(iv) The address to which the CAP must be mailed, if applicable.
(v) Penalties that will accompany the termination, such as not being eligible to bid in future rounds of competitive bidding.
(vi) The effective date of termination is 45 days from the date of the notification letter unless a timely hearing request has been filed or a corrective action plan (CAP) has been submitted within 30 days of the date on the notification letter.
(c)
(ii) If a supplier chooses not to submit a CAP or if CMS determines that a supplier's CAP is insufficient, the supplier may request a hearing on the termination.
(2)
(ii) Suppliers will only have the opportunity to submit a CAP when they are first notified that they have been determined to be in breach of contract. If the CAP is not acceptable or properly implemented, suppliers will receive a subsequent termination notice.
(d)
(2) To identify the timeframes by which the supplier will implement each of the components of the CAP.
(e)
(2) If CMS accepts the CAP, including supplier's designated timeframe for its completion; the supplier must provide a follow-up report within 5 days after the supplier has fully implemented the CAP that verifies that all of the deficiencies identified in the CAP have been corrected in accordance with the timeframes accepted by CMS.
(3) If the supplier does not implement an acceptable CAP the supplier will receive a subsequent notice that their contract will be terminated within 45 days of the date on that notice.
(f)
(2) A supplier who wishes to appeal the termination notice must submit a written request to the CBIC. The request for a hearing must be received by the CBIC within 30 days from the date of the notice to terminate.
(3) A request for hearing must be in writing and submitted by an authorized official of the supplier.
(4) The appeals process for the Medicare DMEPOS Competitive Bidding Program is not to be used in place of other existing appeals processes that apply to other parts of the Medicare.
(5) If the supplier is given the opportunity to submit a CAP and a CAP is
(g)
(2) The hearing may be held in person or by telephone at the supplier's request.
(3) The scheduling notice to the parties must indicate the time and place for the hearing and must be sent to the supplier 30 days before the date of the hearing.
(4) The HO may, on his or her own motion, or at the request of a party, change the time and place for the hearing, but must give the parties to the hearing 30 days notice of the change.
(5) The HO's scheduling notice must provide the parties to the hearing and the CBIC the following information:
(i) Description of the hearing procedure.
(ii) The general and specific issues to be resolved.
(iii) The supplier has the burden to prove it is not in violation of the contract.
(iv) The opportunity for parties to the hearing to submit additional evidence to support their positions, if requested by the HO.
(v) All evidence submitted, both from the supplier and CMS, in preparation for the hearing with all affected parties within 15 days prior to the scheduled date of the hearing.
(h)
(2) The supplier's supporting evidence must be submitted with its request for a hearing.
(3) If the Medicare DMEPOS supplier fails to submit this evidence at the time of its submission, the Medicare DMEPOS supplier is precluded from introducing new evidence later during the hearing process, unless permitted by the hearing officer.
(4) CMS also has the opportunity to submit evidence to the HO within 10 days of receiving a notice announcing the hearing.
(5) The HO will share all evidence submitted by the supplier and/or CMS, with all parties to the hearing and the CBIC within 15 days prior to the scheduled date of the hearing.
(i)
(1) Conducts the hearing and decides the order in which the evidence and the arguments of the parties are presented;
(2) Determines the rules on admissibility of the evidence;
(3) Examines the witnesses, in addition to the examinations conducted by CMS and the contract supplier;
(4) The CBIC may assist CMS in the appeals process including being present at the hearing, testifying as a witness, or performing other, related ministerial duties.
(5) Determines the rules for requesting documents and other evidence from other parties;
(6) Ensures a complete record of the hearing is made available to all parties to the hearing;
(7) Prepares a file of the record of the hearing which includes all evidence submitted as well as any relevant documents identified by the HO and considered as part of the hearing; and
(8) Complies with all applicable provisions of 42 USC Title 18 and related provisions of the Act, the applicable regulations issued by the Secretary, and manual instructions issued by CMS.
(j)
(2) The recommendation will explain the basis and the rationale for the HO's recommendation.
(3) The hearing officer must include the record of the hearing, along with all evidence and documents produced during the hearing along with its recommendation.
(k)
(2) After reviewing the HO recommendation, CMS' decision will be made within 30 days from the date of receipt of the HO's recommendation.
(3) A CMS decision to terminate will indicate the effective date of the termination.
(4) This decision is final and binding.
(l)
(1) All locations included in the contract can no longer furnish competitive bid items to beneficiaries within a CBA and the supplier cannot be reimbursed by Medicare for these items after the effective date of the termination.
(2) Must notify all beneficiaries who are receiving rented competitive bid items or competitive bid items received on a recurring basis, of the termination of their contract.
(i) The notice to the beneficiary from the supplier whose contract was terminated must be provided within 15 days of receipt of the final notice of termination.
(ii) The notification to the beneficiaries must inform the beneficiaries that they are going to have to select a new contract supplier to furnish these items in order for Medicare to pay these items.
(m)
(2) If a supplier requests an HO review of the CMS decision to terminate its contract, and CMS based upon the HO's recommendation terminates the supplier's contract, the effective date of the termination will be the date specified in the post-hearing notice to the supplier indicating CMS's final determination to terminate the contract.
(3) For violations of the terms of the supplier's DMEPOS CBP contract that may harm beneficiaries, such as a supplier providing an inferior product that causes harm to the beneficiary, no delays of the effective date of the termination will be allowed.
(a) There is no administrative or judicial review under this subpart of the following:
(1) Establishment of payment amounts.
(2) Awarding of contracts.
(3) Designation of CBAs.
(4) Phase-in of the competitive bidding programs.
(5) Selection of items for competitive bidding.
(6) Bidding structure and number of contract suppliers selected for a competitive bidding program.
(b) A denied claim is not appealable if the denial is based on a determination by CMS that a competitively bid item was furnished in a CBA in a manner not authorized by this subpart.
(a)
(2) A subcontractor of a contract supplier is not eligible to submit a claim under this section.
(b)
(2) The date of filing is the actual date of receipt by the CBIC of a completed claim that includes all the information required by this rule.
(c)
(2) A copy of the signed contract entered into with CMS for the Round 1 DMEPOS Competitive Bidding Program;
(3) A detailed explanation of the damages incurred by this supplier as a direct result of the termination of the Round 1 competitive bid contract by MIPPA. The explanation must include all of the following:
(i) Documentation of the supplier's damages through receipts.
(ii) Records that substantiate the supplier's damages and demonstrate that the damages are directly related to performance of the Round 1 contract and are consistent with information the supplier provided as part of their bid.
(4) The supplier must explain how it would be damaged if not reimbursed.
(5) The claim must document steps the supplier took to mitigate any damages they may have incurred due to the contract termination, including a detailed explanation of the steps of all attempts to use for other purposes, return or dispose of equipment or other assets purchased or rented for the use in the Round 1 DMEPOS CBP contract performance.
(d)
(1) The cost of submitting a bid.
(2) Any fees or costs incurred for consulting or marketing.
(3) Costs associated with accreditation or licensure.
(4) Costs incurred before March 20, 2008.
(5) Costs incurred for contract performance after July 14, 2008 except for costs incurred to mitigate damages.
(6) Any profits a supplier may have expected from the contract.
(7) Costs that would have occurred without a contract having been awarded.
(8) Costs for items such as inventory, delivery vehicles, office space and equipment, personnel, which the supplier did not purchase specifically to perform the contract.
(9) Costs that the supplier has recouped by any means, and may include use of personnel, material, suppliers, or equipment in the supplier's business operations.
(e)
(2) Claims must include a statement from a supplier's authorized official certifying the accuracy of the information provided on the claim and all supporting documentation.
(3) The CBIC does not accept electronic submissions of claims for damages.
(f)
(ii) For complete, timely claims, the CBIC will review the claim on its merits to determine if damages are warranted and may seek further information from the claimant when making its recommendation to the Determining Authority. The CBIC may set a deadline for receipt of additional information. A claimant's failure to respond timely may result in a denial of the claim.
(iii) The CBIC will make a recommendation to the Determining Authority for each claim filed and include an explanation that supports its recommendation.
(iv) The recommendation must be either to award damages for a particular amount (which may not be the same amount requested by the claimant) or that no damages should be awarded.
(A) If the CBIC recommends that damages are warranted, the CBIC will calculate a recommended reasonable amount of damages based on the claim submitted.
(B) The reasonable amount will consider both costs incurred and the contractor's attempts and action to limit the damages;
(v) The recommendation will be sent to the Determining Authority for a final determination.
(2)
(ii) The Determining Authority may seek further information from the claimant or the CBIC in making a concurrence or non-concurrence determination.
(iii) The Determining Authority may set a deadline for receipt of additional information. A claimant's failure to respond timely may result in a denial of the claim.
(iv) If the Determining Authority concurs with the CBIC recommendation, the Determining Authority shall submit a final signed decision to the CBIC and direct the CBIC to notify the claimant of the decision and the reasons for the final decision.
(v) If the Determining Authority non-concurs with the CBIC recommendation, the Determining Authority may return the claim for further processing or the Determining Authority may:
(A) Write a determination granting (in whole or in part) a claim for damages or denying a claim in its entirety;
(B) Direct the CBIC to write said determination for the Determining Authority's signature; or
(C) Return the claim to the CBIC with further instructions.
(vi) The Determining Authority's determination is final and not subject to administrative or judicial review.
(g)
(2) In the case of more complex cases, or in the event of a large workload, a decision will be issued as soon as practicable.
(h)
If a HCPCS code for a competitively bid item is revised after the contract period for a competitive bidding program begins, CMS adjusts the single payment amount for that item as follows:
(a) If a single HCPCS code for an item is divided into two or more HCPCS codes for the components of that item, the sum of single payment amounts for the new HCPCS codes equals the single payment amount for the original item. Contract suppliers must furnish the components of the item and submit claims using the new HCPCS codes.
(b) If a single HCPCS code is divided into two or more separate HCPCS codes, the single payment amount for each of the new separate HCPCS codes is equal to the single payment amount applied to the single HCPCS code. Contract suppliers must furnish the items and submit claims using the new separate HCPCS codes.
(c) If the HCPCS codes for components of an item are merged into a single HCPCS code for the item, the single payment amount for the new HCPCS code is equal to the total of the separate single payment amounts for the components. Contract suppliers must furnish the item and submit claims using the new HCPCS code.
(d) If multiple HCPCS codes for similar items are merged into a single HCPCS code, the items to which the new HCPCS codes apply may be furnished by any supplier that has a valid Medicare billing number. Payment for
This subpart implements provisions of 1833(h)(8) of the Act—procedures for determining the basis for, and amount of, payment for a new clinical diagnostic laboratory test with respect to which a new or substantially revised Healthcare Common Procedure Coding System code is assigned on or after January 1, 2005.
For purposes of this subpart—
For a new test, CMS determines the basis for and amount of payment after performance of the following:
(a) CMS makes available to the public (through CMS's Internet Web site) a list that includes codes for which establishment of a payment amount is being considered for the next calendar year.
(b) CMS publishes a
(c) Not fewer than 30 days after publication of the notice in the
(d) Considering the comments and recommendations (and accompanying data) received at the public meeting, CMS develops and makes available to the public (through an Internet Web site and other appropriate mechanisms) a list of—
(1) Proposed determinations with respect to the appropriate basis for establishing a payment amount for each code, with an explanation of the reasons for each determination, the data on which the determinations are based, and a request for public written comments within a specified time period on the proposed determination; and
(2) Final determinations of the payment amounts for tests, with the rationale for each determination, the data on which the determinations are based, and responses to comments and suggestions from the public.
For a new clinical diagnostic laboratory test that is assigned a new or substantially revised code on or after January 1, 2005, CMS determines the payment amount based on either of the following:
(a)
(1) CMS assigns to the new test code, the local fee schedule amounts and national limitation amount of the existing test.
(2) Payment for the new test code is made at the lesser of the local fee
(b)
(1) In the first year, carrier-specific amounts are established for the new test code using the following sources of information to determine gapfill amounts, if available:
(i) Charges for the test and routine discounts to charges;
(ii) Resources required to perform the test;
(iii) Payment amounts determined by other payers; and
(iv) Charges, payment amounts, and resources required for other tests that may be comparable or otherwise relevant.
(2) In the second year, the test code is paid at the national limitation amount, which is the median of the carrier-specific amounts.
(3) For a new test for which a new or substantially revised HCPCS code was assigned on or before December 31, 2007, after the first year of gapfilling, CMS determines whether the carrier-specific amounts will pay for the test appropriately. If CMS determines that the carrier-specific amounts will not pay for the test appropriately, CMS may crosswalk the test.
For a new test for which a new or substantially revised HCPCS code was assigned on or after January 1, 2008, the following reconsideration procedures apply:
(a)
(2)(i) A requestor that submitted a request under paragraph (a)(1) of this section may also present its reconsideration request at the public meeting convened under § 414.506(c), provided that the requestor requests an opportunity to present at the public meeting as part of its written submission under paragraph (a)(1) of this section.
(ii) If the requestor presents its reconsideration request at the public meeting convened under § 414.506(c), members of the public may comment on the reconsideration request verbally at the public meeting and may submit written comments after the public meeting (within the timeframe for public comments established by CMS).
(3) Considering reconsideration requests and other comments received, CMS may reconsider its determination of the basis for payment. As the result of such a reconsideration, CMS may change the basis for payment from crosswalking to gapfilling or from gapfilling to crosswalking.
(4) If the basis for payment is revised as the result of a reconsideration, the new basis for payment is final and is not subject to further reconsideration.
(b)
(ii)(A) A requestor that submitted a request under paragraph (b)(1)(i) of this section may also present its reconsideration request at the public meeting convened under § 414.506(c), provided that the requestor requests an opportunity to present at the public meeting as part of its written submission under paragraph (b)(1)(i) of this section.
(B) If a requestor presents its reconsideration request at the public meeting convened under § 414.506(c), members of the public may comment on the reconsideration request verbally at the public meeting and may submit written comments after the public meeting
(iii) Considering comments received, CMS may reconsider its determination of the amount of payment. As the result of such a reconsideration, CMS may change the code or codes to which the new test is crosswalked.
(iv) If CMS changes the basis for payment from gapfilling to crosswalking as a result of a reconsideration, the crosswalked amount of payment is not subject to reconsideration.
(2)
(ii) For 60 days after CMS posts interim carrier-specific amounts on the CMS Web site, CMS will receive public comments in written format regarding the interim carrier-specific amounts.
(iii) After considering the public comments, CMS will post final carrier-specific amounts on the CMS Web site.
(iv) For 30 days after CMS posts final carrier-specific amounts on the CMS Web site, CMS will receive reconsideration requests in written format regarding whether CMS should reconsider the final payment amounts and the appropriate national limitation amount for the new test.
(v) Considering reconsideration requests received, CMS may reconsider its determination of the amount of payment. As the result of a reconsideration, CMS may revise the national limitation amount for the new test.
(3) For both gapfilled and crosswalked new tests, if CMS revises the amount of payment as the result of a reconsideration, the new amount of payment is final and is not subject to further reconsideration.
(c)
(d)
The date of service for either a clinical laboratory test or the technical component of physician pathology service is as follows:
(a) Except as provided under paragraph (b) of this section, the date of service of the test must be the date the specimen was collected.
(b)(1) If a specimen was collected over a period that spans 2 calendar days, then the date of service must be the date the collection ended.
(2) In the case of a test performed on a stored specimen, if a specimen was stored for—
(i) Less than or equal to 30 calendar days from the date it was collected, the date of service of the test must be the date the test was performed only if—
(A) The test is ordered by the patient's physician at least 14 days following the date of the patient's discharge from the hospital;
(B) The specimen was collected while the patient was undergoing a hospital surgical procedure;
(C) It would be medically inappropriate to have collected the sample other than during the hospital procedure for which the patient was admitted;
(D) The results of the test do not guide treatment provided during the hospital stay; and
(E) The test was reasonable and medically necessary for the treatment of an illness.
(ii) More than 30 calendar days before testing, the specimen is considered to have been archived and the date of service of the test must be the date the specimen was obtained from storage.
(3) In the case of a chemotherapy sensitivity test performed on live tissue, the date of service of the test must be
(i) The decision regarding the specific chemotherapeutic agents to test is made at least 14 days after discharge;
(ii) The specimen was collected while the patient was undergoing a hospital surgical procedure;
(iii) It would be medically inappropriate to have collected the sample other than during the hospital procedure for which the patient was admitted;
(iv) The results of the test do not guide treatment provided during the hospital stay; and,
(v) The test was reasonable and medically necessary for the treatment of an illness.
(4) For purposes of this section, “chemotherapy sensitivity test” means a test identified by the Secretary as a test that requires a fresh tissue sample to test the sensitivity of tumor cells to various chemotherapeutic agents. The Secretary identifies such tests through program instructions.
This subpart implements section 1834(l) of the Act by establishing a fee schedule for the payment of ambulance services. Section 1834(l) of the Act requires that, except for services furnished by certain critical access hospitals (see § 413.70(b)(5) of this chapter), payment for all ambulance services, otherwise previously payable on a reasonable charge basis or retrospective reasonable cost basis, be made under a fee schedule.
As used in this subpart, the following definitions apply to both land and water (hereafter collectively referred to as “ground”) ambulance services and to air ambulance services unless otherwise specified:
(1) Manual defibrillation/cardioversion.
(2) Endotracheal intubation.
(3) Central venous line.
(4) Cardiac pacing.
(5) Chest decompression.
(6) Surgical airway.
(7) Intraosseous line.
(a)
(b)
(c)
(1)
(A) Urban areas (both base rate and mileage) are paid based on a rate that is 1 percent higher than otherwise is applicable under this section; and
(B) Rural areas (both base rate and mileage) are paid based on a rate that is 2 percent higher than otherwise is applicable under this section.
(ii) For services furnished during the period July 1, 2008 through December 31, 2010, ambulance services originating in—
(A) Urban areas (both base rate and mileage) are paid based on a rate that is 2 percent higher than otherwise is applicable under this section;
(B) Rural areas (both base rate and mileage) are paid based on a rate that is 3 percent higher than otherwise is applicable under this section.
(iii) The service-level base rate is then adjusted by the GAF. Compare this amount to the actual charge. The lesser of the actual charge or the GAF adjusted base rate amount is added to the lesser of the actual mileage charges or the payment rate per mile, multiplied by the number of miles that the beneficiary was transported. When applicable, the appropriate RAF is applied to the ground mileage rate to determine the appropriate payment rates. The RVU scale for the ambulance fee schedule is as follows:
(2)
(3)
(4)
(5)
(ii) For services furnished during the period July 1, 2004 through December 31, 2010, the payment amount for the ground ambulance base rate is increased by 22.6 percent where the point of pickup is in a rural area determined to be in the lowest 25 percent of rural population arrayed by population density. The amount of this increase is based on CMS's estimate of the ratio of the average cost per trip for the rural areas in the lowest quartile of population compared to the average cost per trip for the rural areas in the highest quartile of population. In making this estimate, CMS may use data provided by the GAO.
(6)
(7)
(d)
(e)
(f)
(g)
(h)
The fee schedule for ambulance services will be phased in over 5 years beginning April 1, 2002. Subject to the first sentence in § 414.610(a), payment for services furnished during the transition period is made based on a combination of the fee schedule payment for ambulance services and the amount the program would have paid absent the fee schedule for ambulance services, as follows:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
For services furnished during the period July 1, 2004 through December 31, 2009, the amount for the ground ambulance base rate is subject to a floor amount determined by establishing nine fee schedules based on each of the nine census divisions using the same methodology as used to establish the national fee schedule. If the regional fee schedule methodology for a given census division results in an amount that is less than or equal to the national ground base rate, then it is not used, and the national FS amount applies. If the regional fee schedule methodology for a given census division results in an amount that is greater than the national ground base rate, then the FS portion of the base rate for that census division is equal to a blend of the national rate and the regional rate in accordance with the following schedule:
(a) Changes in payment rates resulting from incorporation of the annual inflation factor and the productivity adjustment as described in § 414.610(f) will be announced by CMS by instruction and on the CMS Web site.
(b) CMS will follow applicable rulemaking procedures in publishing revisions to the fee schedule for ambulance services that result from any factors other than those described in § 414.610(f).
There will be no administrative or judicial review under section 1869 of the Act or otherwise of the amounts established under the fee schedule for ambulance services, including the following:
(a) Establishing mechanisms to control increases in expenditures for ambulance services.
(b) Establishing definitions for ambulance services that link payments to the type of services provided.
(c) Considering appropriate regional and operational differences.
(d) Considering adjustments to payment rates to account for inflation and other relevant factors.
(e) Phasing in the application of the payment rates under the fee schedule in an efficient and fair manner.
This subpart implements section 1842(o) of the Social Security Act by specifying the methodology for determining the payment allowance limit for drugs and biologicals covered under Part B of Title XVIII of the Act (hereafter in this subpart referred to as the “program”) that are not paid on a cost or prospective payment system basis. Examples of drugs that are subject to the rules contained in this subpart are: drugs furnished incident to a physician's service; durable medical equipment (DME) drugs; separately billable drugs at independent dialysis facilities not under the ESRD composite rate; statutorily covered drugs, for example, influenza, pneumococcal and hepatitis vaccines, antigens, hemophilia blood clotting factor, immunosuppressive drugs and certain oral anti-cancer drugs.
As used in this subpart, the following definition applies.
(a)
(i) The actual charge on the claim for program benefits; or
(ii) 85 percent of the average wholesale price determined as of April 1, 2003, subject to the exceptions as specified in paragraphs (a)(2) through (a)(8) of this section.
(2) The payment limits for the following drugs are calculated using 95 percent of the average wholesale price:
(i) Blood clotting factors.
(ii) A drug or biological furnished during 2004 that was not available for Medicare payment as of April 1, 2003.
(iii) Pneumococcal and influenza vaccines as well as hepatitis B vaccine that is furnished to individuals at high or intermediate risk of contracting hepatitis B (as determined by the Secretary).
(iv) A drug or biological furnished during 2004 in connection with the furnishing of renal dialysis services if separately billed by renal dialysis facilities.
(3) The payment limits for infusion drugs furnished through a covered item of durable medical equipment are calculated using 95 percent of the average wholesale price in effect on October 1, 2003.
(4) The payments limits for drugs contained in the following table are calculated based on the percentages of the average wholesale price determined as of April 1, 2003 that are specified in the table.
(5) The payment limits for imiglucerase and alglucerase are calculated using 94 percent of the average wholesale price determined as of April 1, 2003.
(6) Exception. The payment limit for a drug otherwise subject to paragraph (a)(1)(ii) or paragraph (a)(4) of this section may be calculated using the percentage of the average wholesale price as the Secretary deems appropriate based on data and information submitted by the drug manufacturer.
(i) The manufacturer must submit data after October 15, 2003 and before January 1, 2004.
(ii) The percentage only applies for drugs furnished on or after April 1, 2004.
(7) In the case of blood and blood products (other than blood clotting factors), the payment limits shall be determined in the same manner as such payment limit was determined on October 1, 2003.
(b)
(c)
(1) Each request for payment for anti-anemia drugs furnished to treat anemia resulting from the treatment of cancer must report the beneficiary's most recent hemoglobin or hematocrit level;
(2) Each request for payment for use of erythropoiesis stimulating agents must report the beneficiary's most recent hemoglobin or hematocrit level.
This subpart implements section 1847A of the Act by specifying the requirements for submission of a manufacturer's average sales price data for certain drugs and biologicals covered under Part B of Title XVIII of the Act that are paid under sections 1842(o)(1)(D), 1847A, and 1881(b)(13)(A)(ii) of the Act.
As used in this subpart, unless the context indicates otherwise—
(1) Production, preparation, propagation, compounding, conversion or processing of prescription drug products, either directly or indirectly by extraction from substances of natural origin, or independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis.
(2) The packaging, repackaging, labeling, relabeling, or distribution of prescription drug products.
(a)
(2)
(A) Volume discounts.
(B) Prompt pay discounts.
(C) Cash discounts.
(D) Free goods that are contingent on any purchase requirement.
(E) Chargebacks and rebates (other than rebates under the Medicaid program).
(ii) For the purposes of paragraph (a)(2)(i), bona fide services fees are not considered price concessions.
(3) To the extent that data on price concessions, as described in paragraph (a)(2) of this section, are available on a lagged basis, the manufacturer must estimate this amount in accordance with the methodology described in this paragraph.
(i)(A) For each National Drug Code with at least 12 months of sales (including products for which the manufacturer has redesignated the National Drug Code for the specific product and package size and has 12 months of sales across the prior and current National Drug Codes), after adjusting for exempted sales, the manufacturer calculates a percentage equal to the sum of the price concessions for the most recent 12-month period available associated with sales subject to the average sales price reporting requirement divided by the total in dollars for the sales subject to the average sales price reporting requirement for the same 12-month period.
(B) For each National Drug Code with less than 12 months of sales, the calculation described in paragraph (i)(A) of this section is performed for the time period equaling the total number of months of sales.
(ii) The manufacturer multiplies the applicable percentage described in paragraph (a)(3)(i)(A) or (a)(3)(i)(B) of this section by the total in dollars for the sales subject to the average sales price reporting requirement (after adjusting for exempted sales) for the quarter being submitted. (The manufacturer must carry a sufficient number of decimal places in the calculation of the price concessions percentage in order to round accurately the net total sales amount for the quarter to the nearest whole dollar.) The result of this multiplication is then subtracted from the total in dollars for the sales subject to the average sales price reporting requirement (after adjusting for exempted sales) for the quarter being submitted.
(iii) The manufacturer uses the result of the calculation described in paragraph (a)(3)(ii) of this section as the numerator and the number of units sold in the quarter (after adjusting for exempted sales) as the denominator to calculate the manufacturer's average sales price for the National Drug Code for the quarter being submitted.
(iv)
(4)
(ii) In determining nominal sales exempted under section 1927(c)(1)(C)(ii)(III) of the Act, the manufacturer calculates the average manufacturer price as defined in section 1927(k) of the Act and then identifies sales that are eligible to be considered a nominal sale under section 1927(c)(1)(D) of the Act and are at less than 10 percent of the average manufacturer price. To identify nominal sales, the manufacturer must use the average manufacturer price for the calendar quarter that is the same calendar quarter as the average sales price reporting period.
(5) The manufacturer's average sales price must be calculated by the manufacturer every calendar quarter and submitted to CMS within 30 days of the close of the quarter. The first quarter
(6) The manufacturer's average sales price must be calculated based on the amount of product in a vial or other container as conspicuously reflected on the FDA approved label as defined by section 201(k) of the Food, Drug, and Cosmetic Act.
(7) Each report must be certified by one of the following:
(i) The manufacturer's Chief Executive Officer (CEO).
(ii) The manufacturer's Chief Financial Officer (CFO).
(iii) An individual who has delegated authority to sign for, and who reports directly to, the manufacturer's CEO or CFO.
(b) [Reserved]
Section 1847A(d)(4) specifies the penalties associated with misrepresentations associated with ASP data. If the Secretary determines that a manufacturer has made a misrepresentation in the reporting of ASP data, a civil money penalty in an amount of up to $10,000 may be applied for each price misrepresentation and for each day in which the price misrepresentation was applied. Section 1927(b)(3)(C) of the Act, as amended by section 303(i)(4) of the MMA, specifies the penalties associated with a manufacturer's failure to submit timely information or the submission of false information.
(a) This subpart implements sections 1842(o), 1847A, and 1847B of the Act and outlines two payment methodologies applicable to drugs and biologicals covered under Medicare Part B that are not paid on a cost or prospective payment system basis.
(b) Examples of drugs that are subject to the requirements specified in this subpart are:
(1) Drugs furnished incident to a physician's service; durable medical equipment (DME) drugs.
(2) Separately billable drugs at independent dialysis facilities not under the ESRD composite rate.
(3) Statutorily covered drugs, for example—
(i) Influenza.
(ii) Pneumococcal and Hepatitis B vaccines.
(iii) Antigens.
(iv) Hemophilia blood clotting factor.
(v) Immunosuppressive drugs.
(vi) Certain oral anti-cancer drugs.
As used in this subpart, unless the context indicates otherwise—
(a)
(1) The actual charge on the claim for program benefits; or
(2) 106 percent of the average sales price, subject to the applicable limitations specified in paragraph (d) of this section or subject to the exceptions described in paragraph (e) of this section.
(3) For purposes of this paragraph—
(i) CMS calculates an average sales price payment limit based on the amount of product included in a vial or other container as reflected on the FDA-approved label.
(ii) Additional product contained in the vial or other container does not represent a cost to providers and is not incorporated into the ASP payment limit.
(iii) No payment is made for amounts of product in excess of that reflected on the FDA-approved label.
(b)
(2)
(A) Computing the sum of the products (for each National Drug Code assigned to the drug products) of the manufacturer's average sales price and the total number of units sold; and
(B) Dividing that sum by the sum of the total number of units sold for all NDCs assigned to the drug products.
(ii) For dates of service on or after April 1, 2008, the average sales price is determined by—
(A) Computing the sum of the products (for each National Drug Code assigned to such drug products) of the manufacturer's average sales price, determined by the Secretary without dividing such price by the total number of billing units for the National Drug Code for the billing and payment code and the total number of units sold; and
(B) Dividing the sum determined under clause (A) by the sum of the products (for each National Drug Code assigned to such drug products) of the total number of units sold and the total number of billing units for the National Drug Code for the billing and payment code.
(iii) For purposes of this subsection and subsection (c), the term billing unit means the identifiable quantity associated with a billing and payment code, as established by CMS.
(c)
(2)
(A) Computing the sum of the products (for each National Drug Code assigned to the drug product) of the manufacturer's average sales price and the total number of units sold; and
(B) Dividing that sum by the sum of the total number of units sold for all NDCs assigned to the drug product.
(ii) For dates of service on or after April 1, 2008, the average sales price is determined by—
(A) Computing the sum of the products (for each National Drug Code assigned to such drug products) of the manufacturer's average sales price, determined by the Secretary without dividing such price by the total number of billing units for the National Drug Code for the billing and payment code and the total number of units sold; and
(B) Dividing the sum determined under clause (A) by the sum of the products (for each National Drug Code assigned to such drug products) of the total number of units sold and the total number of billing units for the National Drug Code for the billing and payment code.
(d)
(2)
(ii) Except as provided in paragraph (a) of this section, the payment for drugs and biologicals, furnished to an end-stage renal disease patient that is separately billed by an end-stage renal disease facility, is based on 106 percent of the average sales price.
(iii) Effective for drugs and biologicals furnished in CY 2006 and subsequent calendar years, the payment for such drugs and biologicals furnished in connection with renal dialysis services and separately billed by freestanding and hospital-based renal dialysis facilities not paid on a cost basis is the amount determined under section 1847A of the Act.
(3)
(e)
(2)
(3)
(4)
(5)
(i) Each single source drug or biological described in section 1842(o)(1)(G) that is treated as a multiple source drug because of the application of section 1847A(c)(6)(C)(ii) is the lower of—
(A) The payment amount that would be determined for such drug or biological applying section 1847A(c)(6)(C)(ii); or
(B) The payment amount that would have been determined for such drug or biological if section 1847A(c)(6)(C)(ii) were not applied.
(ii) A multiple source drug described in section 1842(o)(1)(G) (excluding a drug or biological that is treated as a multiple source drug because of the application of section 1847A(c)(6)(C)(ii)) is the lower of—
(A) The payment amount that would be determined for such drug or biological taking into account the application of section 1847A(c)(6)(C)(ii); or
(B) The payment amount that would have been determined for such drug or biological if section 1847A(c)(6)(C)(ii) were not applied.
(f) Except as otherwise specified (see paragraph (e)(2) of this section) for infusion drugs, the payment limits are updated quarterly.
(g) The payment limit is computed without regard to any special packaging, labeling, or identifiers on the dosage form or product or package.
(h) The payment amount is subject to applicable deductible and coinsurance.
(i) If manufacturer ASP data is not available prior to the publication deadline for quarterly payment limits and the unavailability of manufacturer ASP data significantly changes the quarterly payment limit for the billing code when compared to the prior quarter's billing code payment limit, the payment limit is calculated by carrying over the most recent available manufacturer ASP price from a previous quarter for an NDC in the billing code, adjusted by the weighted average of the change in the manufacturer ASPs for the NDCs that were reported for both the most recently available previous quarter and the current quarter.
(j)
(a)
(1) The CAP drug is supplied under the CAP by an approved CAP vendor as specified in § 414.908(b).
(2) The claim for the prescribed drug is submitted by the approved CAP vendor that supplied the drug, and payment is made only to that vendor.
(3) The approved CAP vendor collects applicable deductible and coinsurance with respect to the drug furnished under the CAP only after the drug is administered to the beneficiary.
(4) The approved CAP vendor delivers CAP drugs directly to the participating CAP physician in unopened vials or other original containers as supplied by the manufacturer or from a distributor that has acquired the products directly from the manufacturer and includes language with the shipping material stating that the drug was acquired in a manner consistent with all statutory requirements. If the approved CAP vendor opts to split shipments, the participating CAP physician must be notified in writing which can be included with the initial shipment, and each incremental shipment must arrive at least 2 business days before the anticipated date of administration.
(5) The approved CAP vendor bills Medicare only for the amount of the drug administered to the patient, and the beneficiary's coinsurance will be calculated from the quantity of drug that is administered.
(b)
(1) Is not likely to result in significant savings; or
(2) Is likely to have an adverse impact on access to those drugs.
(c)
(1)
(ii) The single payment amount is then updated quarterly based on the approved CAP vendor's reasonable net acquisition costs for that category as determined by CMS, and limited by the weighted payment amount established under section 1847A of the Act across all drugs for which a composite bid is required in the category.
(iii) The payment amount for each other drug for which the approved CAP vendor submits a bid in accordance with § 414.910 of this subpart and each other drug that is approved by CMS for
(2)
(ii) For subsequent quarters, each approved CAP vendor must report to CMS or its designee RNAC data for a quarter of CAP drug purchases within 30 days of the close of that quarter.
(iii) For all quarters, only RNAC data from approved CAP vendors that are supplying CAP drugs under their CAP contract at the time updates are being calculated must be used to calculate updated CAP payment amounts.
(iv) CMS excludes such RNAC data submitted by an approved CAP vendor if, during the time calculations are being done, CMS knows that the approved CAP vendor will not be under contract for the applicable quarterly update.
(v) The payment amount weights must be calculated based on the more recent of the following:
(A) Contract bidding weights.
(B) CAP claims data.
(vi) The payment limit must be determined using the most recent payment limits available to CMS under section 1847A of the Act.
(vii) The following payment amount update calculation must be applied for the group of all drugs for which a composite bid is required.
(A) The most recent previous composite payment amount for the group is updated by—
(
(
(
(B) The median percent change, subject to the limit described in paragraph (c)(1) of this section, must be the update percentage for that quarter.
(C) The single update percentage must be applied to the payment amount for each drug in the group of drugs for which a composite bid is required in the category.
(viii) The following payment amount update calculation must be applied for each of the following items: Each HCPCS code not included in the composite bid list; Each HCPCS code added to the drug list during the contract period; and each drug that has not yet been assigned a HCPCS code, but for which a HCPCS code will be established.
(A) The most recent previous payment amount for each drug must be updated by calculating the percent change in reasonable net acquisition costs for each approved CAP vendor, then calculating the median of all participating approved CAP vendors' adjusted CAP payment amounts.
(B) The median percent change calculated for each drug, subject to the limit described in paragraph (c)(1) of this section, must be applied to the payment amount for each drug.
(3)
(i) The drug is properly assigned to a category established under the CAP; and
(ii) It is a drug for which a HCPCS code must be established.
(d)
(e)
(1) The drugs were required immediately.
(2) The participating CAP physician could not have anticipated the need for the drugs.
(3) The approved CAP vendor could not have delivered the drugs in a timely manner. For purposes of this section, timely manner means delivery within the emergency delivery timeframe, as defined in § 414.902.
(4) The participating CAP physician administered the drugs in an emergency situation, as defined in § 414.902.
(f)
(i) Is willing to accept the payment amount that was established for the HCPCS code under this section; and
(ii) Obtains the participating CAP physician's prior approval.
(2)
(i) Proposed substitution of an NDC for a period of 2 weeks or longer.
(ii) Proposed addition of one or more NDCs within a HCPCS code included in the CAP drug category specified by CMS or on the approved CAP vendor's approved CAP drug list.
(iii) Proposed addition of—
(A) One or more newly issued HCPCS codes; or
(B) One of the following single indication orphan drug J codes or their updates: J0205, J0256, J9300, J1785, J2355, J3240, J7513, J9010, J9015, J9017, J9160, J9216.
(iv) Beginning January 1, 2007, the proposed addition of a drug(s) that has not yet been assigned a HCPCS code, but for which a HCPCS code must be established.
(v) On or after January 1, 2010, the proposed addition of drugs with similar therapeutic uses to drugs already supplied under the CAP by the approved CAP vendor(s).
(3)
(i) Specify the NDC(s) and the respective HCPCS code that is to be added or substituted.
(ii) Address the rationale for the substitution or addition of the NDC(s) or the addition of the HCPCS code(s) as applicable; and
(iii) Address the impact of the substitution of the NDC(s) or the addition of the NDC(s) or HCPCS code(s), or both on—
(A) Patient and drug safety;
(B) Drug waste; and
(C) The potential for cost savings.
(iv) In the case of additions requested under paragraph (f)(2)(v) of this section, address and document the need for such an expansion based on demand for the product(s).
(4)
(i) Except as specified in paragraph (f)(4)(ii) of this section, an approved request is effective at the beginning of the next calendar quarter.
(ii) Approved substitutions for request based on a drug shortage or other exigent circumstance may become effective immediately provided that—
(A) CMS approves the immediate substitution; and
(B) The approved CAP vendor's notifies its CAP participating physicians of the substitution immediately following CMS approval.
(5)
(i) Substituted or added CAP drugs that are within a HCPCS code for which payment is computed under paragraph (c)(1) of this section is the single payment for that HCPCS code, as determined and updated in accordance with paragraph (c)(1) of this section; or
(ii) Added CAP drugs that are not within a HCPCS code for which payment is computed under paragraph (c)(1) of this section is specified under paragraph (c)(2) of this section.
(g)
(a) Participating CAP
(2) A participating CAP physician may select an approved CAP vendor outside the annual selection process or opt out of the CAP for the remainder of the annual selection period when—
(i) The selected approved CAP vendor ceases participation in the CAP;
(ii) The physician leaves a group practice participating in CAP;
(iii) The participating CAP physician relocates to another competitive acquisition area; or
(iv) The approved CAP vendor refuses to ship to the participating CAP physician because the conditions of § 414.914(i) have been met (if this subparagraph (a)(2)(iv) applies, the physician can withdraw from the CAP category for the remainder of the year immediately upon notice to CMS and the approved CAP vendor); or
(v) Other exigent circumstances defined by CMS are present, including—
(A) If, up to and including 60 days after the effective date of the physician's CAP election agreement, the participating CAP physician submits a written request to the designated carrier to terminate the CAP election agreement because CAP participation imposes a burden on the physician's practice. The written request must document the burden. The designated carrier will process the participating CAP physician's request and CMS will approve or deny the request under the dispute resolution process as specified under § 414.917 of this subpart.
(B) If, more than 60 days after the effective date of the physician's CAP election agreement, the participating CAP physician submits a written request to the designated carrier to terminate the CAP election agreement because, based on a change in circumstances of which the participating CAP physician was not previously aware, CAP participation imposes a burden on the physician's practice. The written request must document the burden. The designated carrier will process the participating CAP physician's request and CMS will approve or deny the request under the dispute resolution process as specified under § 414.917 of this subpart.
(3) The physician participating in the CAP—
(i) Elects to use an approved CAP vendor for the drug category and area as set forth in § 414.908(b);
(ii) Completes and signs the CAP election agreement;
(iii) Submits a written prescription order to the approved CAP vendor with complete patient information for patients new to the approved CAP vendor or when information changes. Abbreviated information may be sent on all subsequent orders for a patient for which the approved CAP vendor has previously received complete information and that has no changes to the original information. Prescription orders may be initiated by telephone, with a follow-up written order provided within 8 hours for routine deliveries and immediately for emergency deliveries;
(iv) Does not receive payment for the CAP drug;
(v) Except where applicable State pharmacy law prohibits it, provides the following information to the approved CAP vendor to facilitate collection of applicable deductible and coinsurance as described in § 414.906(a)(3):
(A) Date of order.
(B) Beneficiary name, address, and phone number.
(C) Physician identifying information:
Name, practice location/shipping address, group practice information (if applicable), PIN, and UPIN.
(D) Drug name.
(E) Strength.
(F) Quantity ordered.
(G) Dose.
(H) Frequency/instructions.
(I) Anticipated date of administration.
(J) Beneficiary Medicare information/Health insurance (HIC) number.
(K) Supplementary insurance information (if applicable).
(L) Medicaid information (if applicable).
(M) Additional patient information: date of birth, allergies, height/weight, ICD-9-CM (if necessary).
(vi) Agrees to accept the particular National Drug Codes (NDCs) supplied by the approved CAP vendor for the duration of the participating CAP physician's enrollment with the approved CAP vendor, subject to paragraphs (a)(3)(vii) and (a)(3)(xiv) of this section. By electing to participate with an approved CAP vendor, the participating CAP physician also agrees to accept the changes to the approved CAP vendor's CAP drug list that have been approved in accordance with § 414.906(f).
(vii) Agrees to place routine orders for CAP drugs at the HCPCs level, except when medical necessity requires a particular formulation on the approved CAP vendor's CAP drug list. Medical necessity must be documented. When the conditions of this paragraph are met, the participating CAP physician may submit a prescription order to the approved CAP vendor that specifies the NDC.
(viii) Notifies the approved CAP vendor when a drug is not administered or a smaller amount was administered than was originally ordered. The participating CAP physician and the approved CAP vendor agree on how to handle the unused CAP drug. If it is agreed that the participating CAP physician will maintain the CAP drug in his inventory for administration at a later date, the participating CAP physician submits a new prescription order at that time. This prescription order specifies that the CAP drug is being obtained from the participating CAP physician's CAP inventory and shipment should not occur;
(ix) Maintains a separate electronic or paper inventory for each CAP drug obtained;
(x) Agrees to file the Medicare claim within 30 calendar days of the date of drug administration.
(xi) Agrees to submit documentation such as medical records or certification, as necessary, to support payment for a CAP drug;
(xii) Agrees not to transport CAP drugs from one practice location or place of service to another location except in accordance with a written agreement between the participating CAP physician and the approved CAP vendor that requires that drugs are not subjected to conditions that will jeopardize their integrity, stability, and/or sterility while being transported.
(xiii) Agrees to provide the CMS-developed CAP fact sheet to beneficiaries; and
(xiv) May receive payment under the ASP system when medical necessity requires a certain brand or formulation of a drug that the approved CAP vendor has not been contracted to furnish under the CAP.
(4) Physician group practices. If a physician group practice using a group billing number(s) elects to participate in the CAP, all physicians in the group are considered to be participating CAP physicians when using the group's billing number(s).
(b)
(i) Submission of the bid prices using the OMB-approved Vendor Application and Bid Form for CAP drugs within the category and competitive acquisition area that—
(A) Places the vendor among the qualified bidders with the lowest five composite bids; and
(B) Does not exceed the weighted payment amount established under section 1847A of the Act across all drugs in that category.
(ii) Ability to ensure product integrity.
(iii) Customer service/Grievance process.
(iv) At least 3 years experience in furnishing Part B injectable drugs.
(v) Financial performance and solvency.
(vi) Record of integrity and the implementation of internal integrity measures.
(vii) Internal financial controls.
(viii) Acquisition of all CAP drugs directly from the manufacturer or from a distributor that has acquired the products directly from the manufacturer.
(ix) Maintenance of appropriate licensure to supply CAP drugs in States in which they are supplying CAP drugs.
(x) Cost-sharing assistance as described in § 414.914(g).
(xi) Other factors as determined by CMS.
(2) Approved CAP vendors must also meet the contract requirements under § 414.914.
(c)
(1) Suspension or revocation by the Federal or State government of the entity's license for distribution of drugs, including controlled substances.
(2) Exclusion of the entity under section 1128 of the Act from participation in Medicare or other Federal health care programs. These considerations are in addition to CMS' ability to terminate the approved CAP vendor for cause as specified in § 414.914(a).
(3) Past violations or misconduct related to the pricing, marketing, distribution, or handling of drugs provided incident to a physician's service.
(d)
(e)
(a) Entities may bid to furnish CAP drugs in all competitive acquisition areas of the United States, or one or more specific competitive acquisition areas.
(b) The amount of the bid for any CAP drug for a specific competitive acquisition area must be uniform for all portions of that competitive acquisition area.
(c) A submitted bid price must include the following:
(1) All costs related to the delivery of the drug to the participating CAP physician.
(2) The costs of dispensing (including shipping) of the drug and management fees. The costs related to the administration of the drug or wastage, spillage, or spoilage may not be included.
(a) Approved CAP vendors and applicants that bid to participate in the CAP are subject to the following:
(1) The conflict of interest standards and requirements of the Federal Acquisition Regulation (FAR) organizational conflict of interest guidance, found under FAR subpart 9.5.
(2) Those requirements and standards contained in each individual contract awarded to perform functions under section 1847B of the Act.
(b)
(1) State the need for management, employees, contractors, and agents to comply with the approved CAP vendor's code of conduct, and policies and procedures for conflicts of interest; and
(2) State the approved CAP vendor's expectations for management, employees, contractors, and agents to comply with the approved CAP vendor's code of conduct, and policies and procedures
(a) The contract between CMS and the approved CAP vendor will be for a term of 3 years, unless terminated or suspended earlier as provided in this section or provided in § 414.917. The contract may be terminated—
(1) By CMS for default if the approved CAP vendor violates any term of the contract; or
(2) In the absence of a contract violation, by either CMS or the approved CAP vendor, if the terminating party notifies the other party by June 30 for an effective date of termination of December 31 of that year.
(b) The contract will provide for a code of conduct for the approved CAP vendor that includes standards relating to conflicts of interest standards as set forth at § 414.912.
(c) The approved CAP vendor will have and implement a compliance plan that contains policies and procedures that control program fraud, waste, and abuse, and consists of the following minimum elements:
(1) Written policies, procedures, and standards of conduct articulating the organization's commitment to comply with all applicable Federal and State laws, regulations, and guidance, including, but not limited to, the Prescription Drug Marketing Act (PDMA), the physician self-referral (“Stark”) prohibition, the Anti-Kickback statute and the False Claims Act.
(2) The designation of a compliance officer and compliance committee accountable to senior management.
(3) Effective training and education of the compliance officer and organization employees, contractors, agents, and directors.
(4) Enforcement of standards through well publicized disciplinary guidelines.
(5) Procedures for effective internal monitoring and auditing.
(6) Procedures for ensuring prompt responses to detected offenses and development of corrective action initiatives relating to the organization's contract as an approved CAP vendor.
(i) If the approved CAP vendor discovers evidence of misconduct related to payment or delivery of drugs or biologicals under the contract, it will conduct a timely and reasonable inquiry into that conduct.
(ii) The approved CAP vendor will conduct appropriate corrective actions including, but not limited to, repayment of overpayments and disciplinary actions against responsible individuals, in response to potential violations referenced at paragraph (c)(6)(i) of this section.
(7) Procedures to voluntarily self-report potential fraud or misconduct related to the CAP to the appropriate government agency.
(d) The contract must provide for disclosure of the approved CAP vendor's reasonable, net acquisition costs for a specified period of time, not to exceed quarterly.
(e) The contract must provide for appropriate adjustments as described in § 414.906(c)(1).
(f) Under the terms of the contract, the approved CAP vendor must also—
(1) Have sufficient arrangements to acquire and deliver CAP drugs within the category in the competitive acquisition area specified by the contract;
(2) Have arrangements in effect for shipment at least 5 weekdays each week of CAP drugs under the contract, including the ability to comply with the routine and emergency delivery timeframes defined in § 414.902;
(3) Have procedures in place to address and resolve complaints of participating CAP physicians and individuals and inquiries regarding shipment of CAP drugs;
(4) Have a grievance and appeals process for dispute resolution;
(5) Respond within 2 business days to any inquiry, or sooner if the inquiry is related to drug quality;
(6) Staff a toll-free telephone line from 8:30 a.m. or earlier and until 5 p.m. or later for all time zones served in the continental United States by the CAP vendor on business days (Monday through Friday excluding Federal holidays) to provide customer assistance, and establish reasonable hours of operation for Hawaii, Alaska, Puerto Rico, and the other U.S. territories;
(7) Staff an emergency toll-free telephone line for weekend and evening access when the call center is closed, and
(8) Include assistance for the disabled, the hearing impaired, and Spanish-speaking inquirers in all customer service operations.
(9) Meet applicable licensure requirements in each State in which it supplies drugs under the CAP;
(10) Be enrolled in Medicare as a participating supplier;
(11) Comply with all applicable Federal and State laws, regulations and guidance related to the prevention of fraud and abuse;
(12) Supply CAP drugs upon receipt of a prescription order to all participating CAP physicians who have selected the approved CAP vendor, except when the conditions of paragraph (h) of this section or § 414.916(b) of this subpart are met;
(13) Provide direct notification to participating CAP physicians enrolled with them of updates to the approved CAP vendor's CAP drug list on a quarterly basis. Changes must be disseminated at least 30 days before the approved changes are due to take effect, unless immediate notification as described in § 414.906(f)(4) is required. The approved CAP vendor's entire CAP drug list must be disseminated at least once yearly; and approved CAP vendors must make a complete list that incorporates the most recent updates available to physicians on an ongoing basis. CMS posts on its web site the updated CAP drug lists for each approved CAP vendor.
(14) Ensure that subcontractors who are involved in providing services under the approved CAP contractor's CAP contract meet all requirements and comply with all laws and regulations relating to the services they provide under the CAP program. Notwithstanding any relationship the CAP vendor may have with any subcontractor, the approved CAP vendor maintains ultimate responsibility for adhering to and otherwise fully complying with all terms and conditions of its contract with CMS;
(15) Comply with product integrity and record keeping requirements including but not limited to drug acquisition, handling, storage, shipping, drug waste, and return processes; and
(16) Comply with such other terms and conditions as CMS may specify in the CAP contract consistent with section 1847B of the Act.
(g) Under the terms of the contract, the approved CAP vendor must provide assistance to beneficiaries experiencing financial difficulty in paying their cost-sharing amounts through any one or all of the following:
(1) Referral to a bona fide and independent charitable organization.
(2) Implementation of a reasonable payment plan.
(3) A full or partial waiver of the cost-sharing amount after determining in good faith that the individual is in financial need or the failure of reasonable collection efforts, provided that the waiver meets all of the requirements of section 1128A(i)(6)(A) of the Act and the corresponding regulations at paragraph (1) of the definition of “Remuneration” in § 1003.101 of this title. The availability of waivers may not be advertised or be made as part of a solicitation. Approved CAP vendors must inform beneficiaries that they generally make available the categories of assistance described in paragraphs (g)(1), (g)(2), and (g)(3) of this section. In no event may the approved CAP vendor include or make any statements or representations that promise or guarantee that beneficiaries receive cost-sharing waivers.
(h) The approved CAP vendor must verify drug administration prior to collection of any applicable cost sharing amount.
(1) The approved CAP vendor documents, in writing, the following information necessary to verify drug administration:
(i) Beneficiary name.
(ii) Health insurance number.
(iii) Expected date of administration.
(iv) Actual date of administration.
(v) Identity of the participating CAP physician.
(vi) Prescription order number.
(vii) Identity of the individuals who supply and receive the information.
(viii) Dosage supplied.
(ix) Dosage administered.
(2) If the information is obtained verbally, the approved CAP vendor must
(i) The identities of individuals who exchanged the information.
(ii) The date and time that the information was obtained.
(3) The approved CAP vendor must provide this information to CMS or the beneficiary upon request.
(i) The approved CAP vendor must comply with the following procedures before it may refuse to make further shipments of CAP drugs to a participating CAP physician on behalf of a beneficiary:
(1) Subsequent to receipt of payment by Medicare, or the verification of drug administration by the participating CAP physician, the approved CAP vendor must bill any applicable supplemental insurance policies.
(2) An approved CAP vendor that has received payment from the designated carrier for CAP drugs that have not been administered must promptly refund payment for such drugs to the designated carrier and must refund any coinsurance and deductible collected from the beneficiary and his or her supplemental insurer.
(3) At the time of billing the beneficiary, or the participating CAP physician's presentation of the bill on behalf of the approved CAP vendor, the approved CAP vendor must inform the beneficiary of any types of cost-sharing assistance that may be available consistent with the requirements of section 1128A(a)(5) of the Act and § 414.914(g).
(4) If the beneficiary demonstrates a financial need, the approved CAP vendor must follow the conditions outlined in paragraph (g) of this section.
(5) For purposes of paragraph (i) of this section delivery means postmark date, or the date the coinsurance bill or notice was presented to the beneficiary by the participating CAP physician on behalf of the approved CAP vendor.
(i) Except as specified in paragraph (i)(5)(ii) of this section, if after 45 days from delivery of the approved CAP vendor's bill to the beneficiary, the beneficiary's cost-sharing obligation remains unpaid, the approved CAP vendor may refuse further shipments to the participating CAP physician for that beneficiary.
(ii) If the beneficiary has requested cost-sharing assistance within 45 days of receiving delivery of the approved CAP vendor's bill, provisions of paragraphs (i)(6), (i)(7), or (i)(8) of this section, apply.
(6) If the approved CAP vendor implements a reasonable payment plan, as specified in § 414.914(g)(2), the approved CAP vendor must continue to ship CAP drugs for the beneficiary, as long as the beneficiary remains in compliance with the payment plan and makes an initial payment under the plan within 15 days after the delivery of the approved CAP vendor's written notice to the beneficiary offering the payment plan.
(7) If the approved CAP vendor has waived the cost-sharing obligations in accordance with section 1128A of the Act and § 414.914(g)(3), the approved CAP vendor may not refuse to ship drugs for that beneficiary.
(8) If the approved CAP vendor refers the beneficiary to a bona fide and independent charity in accordance with § 414.914(g)(1), the approved CAP vendor may refuse to ship drugs if the past due balance is not paid 15 days after the date of delivery of the approved CAP vendor's written notice to the beneficiary containing the referral for cost-sharing assistance.
(9) The approved CAP vendor may refuse to make further shipments to that participating CAP physician on behalf of the beneficiary for the lesser of the end of the calendar year or until the beneficiary's balance is paid in full.
(a)
(b)
(i) Review the participating CAP physician's performance; and
(ii) Potentially recommend to CMS that CMS suspend the participating CAP physician's CAP election agreement.
(2) The designated carrier—
(i) Gathers information from the local carrier, the participating CAP physician, the beneficiary, and the approved CAP vendor; and
(ii) Makes a recommendation to CMS on whether the participating CAP physician has been filing his or her CAP drug administration claims in accordance with the requirements for physician participation in the CAP as set forth in § 414.908(a)(3). The recommendation will include numbered findings of fact.
(3) CMS will review the recommendation of the designated carrier and gather relevant additional information from the participating CAP physician before deciding whether to suspend the participating CAP physician's CAP election agreement. A suspension commencing before October 1 will conclude on December 31 of the same year. A suspension commencing on or after October 1 will conclude on December 31 of the next year.
(4) Upon notification from CMS of a participating CAP physician's suspension from the program, the approved CAP vendor must cease delivery of CAP drugs to the suspended participating CAP physician until the suspension has been lifted.
(5) The participating CAP physician may appeal that suspension by requesting a reconsideration of CMS' decision. The reconsideration will address whether the participating CAP physician's denied claims and appeals were the result of the participating CAP physician's failure to participate in accordance with the requirements of § 414.908(a)(3).
(c)
(2)
(3)
(4)
(i) The findings or issues with which the participating CAP physician disagrees;
(ii) The reasons for the disagreement;
(iii) A recital of the facts and law supporting the participating CAP physician's position;
(iv) Any supporting documentation; and
(v) Any supporting statements from approved CAP vendors, local carriers, or beneficiaries.
(5)
(6)
(i) Is conducted by a hearing officer appointed by the director of the CMS Center for Medicare Management or his or her designee; and
(ii) Provides the participating CAP physician the opportunity to present, by telephone or in person, evidence to rebut CMS' decision to suspend or terminate a participating CAP physician's CAP election agreement.
(7)
(ii) The informal reconsideration hearing will be conducted in accordance with the following procedures:
(A) The hearing is open to CMS and the participating CAP physician requesting the reconsideration, including—
(
(
(
(
(
(B) The hearing is conducted by the hearing officer who receives relevant testimony;
(C) Testimony and other evidence may be accepted by the hearing officer even though it would be inadmissible under the rules of evidence applied in Federal courts;
(D) Either party may call witnesses from among those individuals specified in paragraph (c)(7)(ii)(A) of this section; and
(E) The hearing officer does not have the authority to compel by subpoena the production of witnesses, papers, or other evidence.
(8)
(ii) The written report of the hearing officer includes separate numbered findings of fact and the legal conclusions of the hearing officer.
(9)
(ii) The CMS official may accept, reject, or modify the hearing officer's findings.
(iii) If the CMS official reviews the hearing officer's decision, the CMS official issues a final reconsideration determination to the participating CAP physician on the basis of the hearing officer's findings and recommendations and other relevant information.
(iv) The reconsideration determination of the CMS official is final. If the final decision is unfavorable to the participating CAP physician, then the participating CAP physician's CAP election agreement is terminated.
(d) The approved CAP vendor may not charge the beneficiary for the full drug coinsurance amount if the designated contractor did not pay the approved CAP vendor in full, unless a properly executed advance beneficiary notice is in place. When a beneficiary receives an inappropriate coinsurance bill, the beneficiary may participate in the approved CAP vendor's grievance process to request correction of the approved CAP vendor's file. If the beneficiary is dissatisfied with the result of the approved CAP vendor's grievance process, the beneficiary may request intervention from the designated carrier. This is in addition to, rather than
(a)
(b)
(i) Review the approved CAP vendor's performance; and
(ii) Potentially recommend termination of the approved CAP vendor's CAP contract.
(2)
(i) Gathers information from the local carrier, the participating CAP physician, the beneficiary, and the approved CAP vendor; and
(ii) Makes a recommendation to CMS on whether the approved CAP vendor has been meeting the service and quality obligations of its CAP contract. This recommendation will include numbered findings of fact.
(3) CMS will review the recommendation of the designated carrier and, gather relevant additional information from the approved CAP vendor, the participating CAP physician, the local carrier, and the beneficiary before deciding whether to terminate the approved CAP vendor's CAP contract.
(4) The approved CAP vendor may appeal that termination by requesting a reconsideration. A determination must be made as to whether the approved CAP vendor has been meeting the service and quality obligations of its CAP contract. The approved CAP vendor's contract will remain suspended during the reconsideration process.
(c)
(2)
(3)
(4)
(i) The findings or issues with which the approved CAP vendor disagrees;
(ii) The reasons for the disagreement;
(iii) A recital of the facts and law supporting the approved CAP vendor's position;
(iv) Any supporting documentation; and
(v) Any supporting statements from participating CAP physicians, the local carrier, or beneficiaries.
(5)
(6)
(i) Is conducted by a hearing officer appointed by the Director of the CMS Center for Medicare Management or his or her designee; and
(ii) Provides the approved CAP vendor the opportunity to present, by telephone or in person, evidence to rebut CMS' decision to suspend or terminate the approved CAP vendor's CAP contract.
(7)
(ii) The informal reconsideration hearing will be conducted in accordance with the following procedures:
(A) The hearing is open to CMS and the approved CAP vendor requesting the reconsideration, including—
(
(
(
(
(
(B) The hearing will be conducted by the hearing officer, who will receive relevant testimony;
(C) Testimony and other evidence may be accepted by the hearing officer even though it would be inadmissible under the rules of evidence applied in Federal courts;
(D) Either party may call witnesses from among those individuals specified in the paragraph (c)(7)(ii)(A) of this section; and
(E) The hearing officer does not have the authority to compel by subpoena the production of witnesses, papers, or other evidence.
(8)
(ii) The written report of the hearing officer will include separate numbered findings of fact and the legal conclusions of the hearing officer.
(9)
(ii) The CMS official may accept, reject, or modify the hearing officer's findings.
(iii) If the CMS official reviews the hearing officer's decision, the CMS official will issue a final reconsideration determination to the approved CAP vendor on the basis of the hearing officer's findings and recommendations and other relevant information.
(iv) The reconsideration determination of the CMS official is final.
(d)
(1) The designated carrier must—
(i) Determine whether a request to terminate CAP participation was related to approved CAP vendor service, and if so, forward the issue to the approved CAP vendor's grievance process within 1 business day of the receipt of the request; or
(ii) Continue to investigate, consistent with § 414.916(b)(2) of this chapter, and within 2 business days of receipt, do any of the following:
(A) Request a single, 2-business day extension. No later than the end of any 2-business day extension, the designated carrier must make findings and a recommendation as provided in subparagraph (B) or (C).
(B) Submit a recommendation and relevant findings to CMS that the requesting participating CAP physician be permitted to terminate his or her participation in the CAP.
(C) Submit a recommendation and relevant findings to CMS that the requesting participating CAP physician not be permitted to terminate his or her participation in the CAP.
(ii) In the case of a request made under § 414.908(a)(2)(v)(B), the designated carrier also shall include in its recommendation its finding with respect to whether the request is based on a change in circumstances of which the participating CAP physician was previously unaware.
(2) CMS will consider the carrier's findings and recommendation and may also make its own findings. As a result, CMS will—
(i) Approve or deny the request to terminate participation in the CAP within 2 business days of receipt of the recommendation.
(ii) Communicate the decision to the appropriate Medicare contractors and the participating CAP physician.
(3) A denial of the participating CAP physician's request to terminate participation in the CAP must include written notification of the right to request reconsideration under § 414.916(c).
(4) Upon termination of participation in the CAP a physician must—
(i) Continue to submit claims for drugs supplied and administered under the CAP prior to the effective date of the physician's termination from the CAP consistent with § 414.908(a) until all such claims are timely submitted.
(ii) Return any unused CAP drugs that had not been administered to the beneficiary prior to the effective date of the physician's termination from the CAP to the approved CAP vendor consistent with applicable law and regulation and any agreement with the approved CAP vendor.
(iii) Cooperate in any post-payment review activities on claims submitted under the CAP, as required under section 1847B(a)(3) of the Act.
(5) An approved CAP vendor that has billed and been paid for CAP drugs that have not been administered must refund any payments made by CMS or the beneficiary and his or her supplemental insurer in accordance with § 414.914(h)(3)(i)(2) of this chapter.
Payment for a CAP drug may be made only on an assignment-related basis.
The following areas under the CAP are not subject to administrative or judicial review:
(a) The establishment of payment amounts.
(b) The awarding of vendor contracts.
(c) The establishment of competitive acquisition areas.
(d) The selection of CAP drugs.
(e) The bidding structure.
(f) The number of vendors selected.
(a)
(i) Includes a summary of the pharmacologic characteristics of each drug or biological and may include information on dosage, as well as recommended or endorsed uses in specific diseases.
(ii) Is indexed by drug or biological.
(iii) Has a publicly transparent process for evaluating therapies and for identifying potential conflicts of interests.
(i) The internal or external request for listing of a therapy recommendation including criteria used to evaluate the request.
(ii) A listing of all the evidentiary materials reviewed or considered by the compendium pursuant to the request.
(iii) A listing of all individuals who have substantively participated in the review or disposition of the request.
(iv) Minutes and voting records of meetings for the review and disposition of the request.
(i) Direct or indirect financial relationships that exist between individuals or the spouse or minor child of individuals who have substantively participated in the development or disposition of compendia recommendations and the manufacturer or seller of the drug or biological being reviewed by the compendium. This may include, for example, compensation arrangements such as salary, grant, contract, or collaboration agreements between individuals or the spouse or minor child of individuals who have substantively participated in the review and disposition of the request and the manufacturer or seller of the drug or biological being reviewed by the compendium.
(ii) Ownership or investment interests between individuals or the spouse or minor child of individuals who have substantively participated in the development or disposition of compendia recommendations and the manufacturer or seller of the drug or biological being reviewed by the compendium.
(b)
(i) Receives formal written requests for changes to the list of compendia during a 30 day window beginning January 15 each year.
(ii) Publishes a listing of the timely, complete requests by March 15th and solicits public comment on the requests for 30 days. The listing identifies the requestor and the requested action.
(iii) Considers a compendium's attainment of the MedCAC (Medicare Evidence Development and Coverage Advisory Committee, previously known as the MCAC—Medicare Coverage Advisory Committee) recommended desirable characteristics of compendia (including explicit listing and recommendations) in reviewing requests. CMS may consider additional reasonable factors.
(iv) Considers a compendium's grading of evidence used in making recommendations regarding off-label uses and the process by which the compendium grades the evidence.
(v) Considers whether the publication that is the subject of the request meets the definition of a compendium in this section.
(vi) Publishes its decision no later than 90 days after the close of the public comment period.
(2)
(c)
(i) The full name and contact information of the requestor.
(ii) The full identification of the compendium that is the subject of the request, including name, publisher, edition if applicable, date of publication, and any other information needed for the accurate and precise identification of the specific compendium.
(iii) A complete written copy of the compendium that is the subject of the request.
(iv) The specific action that is requested of CMS.
(v) Materials that the requestor must submit for CMS review in support of the requested action.
(vi) A single compendium as its subject.
(d) CMS may at its discretion combine and consider multiple requests that refer to the same compendium.
(e) For the purposes of this section, publication by CMS may be accomplished by posting on the CMS Web site.
This subpart implements section 1842(o)(2) and section 1842(o)(6) of the Act, as added by section 303(e)(2) of the MMA, by specifying a supplying fee for drugs and biologicals covered under Part B of Title XVIII of the Act that are described in sections 1861(s)(2)(J), 1861(s)(2)(Q), and 1861(s)(2)(T) of the Act.
(a)
(1) A supplying fee of $24 is paid to a pharmacy for the first prescription of drugs and biologicals described in sections 1861(s)(2)(J), 1861(s)(2)(Q), and 1861(s)(2)(T) of the Act, that the pharmacy provided to a beneficiary during a 30-day period.
(2) A supplying fee of $16 is paid to a pharmacy for each prescription following the first prescription (as specified in paragraph (a)(1) of this section) of drugs and biologicals described in sections 1861(s)(2)(J), 1861(s)(2)(Q), and 1861(s)(2)(T) of the Act, that the pharmacy provided to a beneficiary during a 30-day period.
(3) A separate supplying fee is paid to a pharmacy for each prescription of drugs and biologicals described in sections 1861(s)(2)(J), 1861(s)(2)(Q), and 1861(s)(2)(T) of the Act.
(b)
(2) A supplying fee of $16 is paid to a pharmacy for each prescription following an initial prescription after a transplant (as specified in paragraph (b)(1) of this section) of drugs and biologicals describe in section 1861(s)(2)(J) of the Act, that the pharmacy provided to a beneficiary during a 30-day period.
(c)
(2) Except for supplied inhalation drugs that meet criteria described in paragraph (c)(1) of this section, a dispensing fee of $33 is paid for each dispensed 30-day supply of inhalation drugs furnished through durable medical equipment covered under section 1861(n) of the Act, regardless of the number of partial shipments of that 30-day supply.
(d)
This subpart implements sections 1834(k)(1) and (k)(3) of the Act by specifying the payment methodology for comprehensive outpatient rehabilitation facility services covered under Part B of Title XVIII of the Act that are described at section 1861(cc)(1) of the Act.
(a)
(1) The actual charge for the item or service; or
(2) The nonfacility amount determined under the physician fee schedule established under section 1848(b) of the Act for the item or service.
(b)
(c)
(1) The actual charge for the service provided that payment for such item is not included in the payment amount for other CORF services paid under paragraphs (a) or (d); or
(2) The amount determined under the DMEPOS fee schedule established under part 414 subparts D and F for the item or the single payment amount established under the DMEPOS competitive bidding program provided that payment for such item is not included in the payment amount for other CORF services paid under paragraphs (a) or (d).
(d)
(1) The actual charge for the service provided that payment for such item is not included in the payment amount for other CORF services paid under paragraphs (a) or (c); or
(2) The amount determined using the same methodology for drugs (as defined in § 414.704 of this chapter) described in section 1842(o)(1) of the Act provided that payment for such
(e)
(i) The actual charge for the service provided that payment for such item or service is not included in the payment amount for other CORF services paid under paragraphs (a), (c), or (d) of this section.
(ii) The amount determined under the fee schedule established for a comparable service as specified by the Secretary provided that payment for such item or service is not included in the payment amount for other CORF services paid under paragraphs (a), (c), or (d) of this section.
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
(a)
(b)
This subpart sets forth rules for payment by fiscal intermediaries to providers for services furnished by physicians. Payment for covered services is made either under the prospective payment system (PPS) to PPS-participating providers in accordance with part 412 of this chapter or under the reasonable cost method to non-PPS participating providers in accordance with part 413 of this chapter.
(a)
(1) The services do not meet the conditions in § 415.102(a) regarding fee schedule payment for services of physicians to a beneficiary in a provider.
(2) The services include a surgeon's supervision of services of a qualified anesthetist, but do not include physician availability services, except for reasonable availability services furnished for emergency rooms and the services of standby surgical team physicians.
(3) The provider has incurred a cost for salary or other compensation it furnished the physician for the services.
(4) The costs incurred by the provider for the services meet the requirements in § 413.9 of this chapter regarding costs related to patient care.
(5) The costs do not include supervision of interns and residents unless the provider elects reasonable cost payment as specified in § 415.160, or any other costs incurred in connection with an approved GME program that are payable under §§ 413.75 through 413.83 of this chapter.
(b)
(c)
(a)
(b)
(1) Physician services to the provider (as described in § 415.55);
(2) Physician services to patients (as described in § 415.102); and
(3) Activities of the physician, such as funded research, that are not paid under either Part A or Part B of Medicare.
(c)
(d)
(1) The provider certifies that the compensation is attributable solely to the physician services furnished to the provider; and
(2) The physician bills all patients for the physician services he or she furnishes to them and personally receives the payment from or on behalf of the patients. If returned directly or indirectly to the provider or an organization related to the provider within the meaning of § 413.17 of this chapter, these payments are not compensation for physician services furnished to the provider.
(e)
(f)
(i) The provider submits to the intermediary a written allocation agreement between the provider and the physician that specifies the respective amounts of time the physician spends in furnishing physician services to the provider, physician services to patients, and services that are not payable under either Part A or Part B of Medicare; and
(ii) The compensation is reasonable in terms of the time devoted to these services.
(2) In the absence of a written allocation agreement, the intermediary assumes, for purposes of determining reasonable costs of the provider, that 100 percent of the physician compensation cost is allocated to services to beneficiaries as specified in paragraph (b)(2) of this section.
(g)
(1) Maintain the time records or other information it used to allocate physician compensation in a form that permits the information to be validated by the intermediary or the carrier.
(2) Report the information on which the physician compensation allocation is based to the intermediary or the carrier on an annual basis and promptly notify the intermediary or carrier of any revisions to the compensation allocation.
(3) Retain each physician compensation allocation, and the information on which it is based, for at least 4 years after the end of each cost reporting period to which the allocation applies.
(a)
(2) Limits established under this section do not apply to costs of physician compensation attributable to furnishing inpatient hospital services that are paid for under the prospective payment system implemented under part 412 of this chapter or to costs of physician compensation attributable to approved GME programs that are payable under §§ 413.75 through 413.83 of this chapter.
(3) Compensation that a physician receives for activities that may not be paid for under either Part A or Part B of Medicare is not considered in applying these limits.
(b)
(c)
(d)
(1) For the costs of membership in professional societies and continuing medical education, the intermediary may adjust the limit by the lesser of—
(i) The actual cost incurred by the provider or the physician for these activities; or
(ii) Five percent of the appropriate limit.
(2) For the cost of malpractice expenses incurred by either the provider or the physician, the intermediary may adjust the reasonable compensation equivalency limit by the cost of the malpractice insurance expense related to the physician service furnished to patients in providers.
(e)
(f)
(2) If CMS proposes to revise the methodology for establishing payment limits under this section, CMS publishes a notice, with opportunity for public comment, in the
(3) If CMS updates limits by applying the most recent economic index data without revising the limit methodology, CMS publishes the revised limits in a notice in the
This subpart implements section 1887(a)(1)(A) of the Act by providing general conditions that must be met in order for services furnished by physicians to beneficiaries in providers to be paid for on the basis of the physician fee schedule under part 414 of this chapter. Section 415.102 sets forth the conditions for fee schedule payment for physician services to beneficiaries in providers. Section 415.105 sets forth general requirements for determining the amounts of payment for services that meet the conditions of this section. Sections 415.120 and 415.130 set forth additional conditions for payment for physician services in the specialties of radiology and pathology (laboratory services).
(a)
(1) The services are personally furnished for an individual beneficiary by a physician.
(2) The services contribute directly to the diagnosis or treatment of an individual beneficiary.
(3) The services ordinarily require performance by a physician.
(4) In the case of radiology or laboratory services, the additional requirements in § 415.120 or § 415.130, respectively, are met.
(b)
(c)
(2) If a physician furnishes services to an individual beneficiary that do not meet the applicable conditions in §§ 415.120 (concerning conditions for payment for radiology services) and 415.130 (concerning conditions for payment for physician pathology services), the carrier does not pay on a fee schedule basis.
(3) If the physician, the provider, or another entity bills the carrier or the beneficiary or another insurer for physician services furnished to the provider, as described in § 415.55(a), CMS considers the provider to which the services are furnished to have violated
(d)
(1) If the conditions set forth in paragraph (a) of this section are met, the carrier pays for the physician services under the physician fee schedule in part 414 of this chapter.
(2) To the extent the provider incurs a cost payable on a reasonable cost basis under part 413 of this chapter, the intermediary pays the provider on a reasonable cost basis for the costs associated with producing these services, including overhead, supplies, equipment costs, and services furnished by nonphysician personnel.
(3) The physician (or other entity) is treated as being related to the provider within the meaning of § 413.17 of this chapter (concerning cost to related organizations).
(4) The physician (or other entity) must make its books and records available to the provider and the intermediary as necessary to verify the nature and extent of the costs of the services furnished by the physician (or other entity).
(a)
(b)
(2)
(a)
(1) For each patient, the physician—
(i) Performs a pre-anesthetic examination and evaluation;
(ii) Prescribes the anesthesia plan;
(iii) Personally participates in the most demanding aspects of the anesthesia plan including, if applicable, induction and emergence;
(iv) Ensures that any procedures in the anesthesia plan that he or she does not perform are performed by a qualified individual as defined in operating instructions;
(v) Monitors the course of anesthesia administration at frequent intervals;
(vi) Remains physically present and available for immediate diagnosis and treatment of emergencies; and
(vii) Provides indicated post-anesthesia care.
(2) The physician directs no more than four anesthesia services concurrently and does not perform any other services while he or she is directing the single or concurrent services so that one or more of the conditions in paragraph (a)(1) of this section are not violated.
(3) If the physician personally performs the anesthesia service, the payment rules in § 414.46(c) of this chapter apply (Physician personally performs the anesthesia procedure).
(b)
(a)
(b)
(a)
(1)
(2)
(i) A Medicare+Choice plan under Part C of Title XVIII of the Act.
(ii) A plan offered by an eligible organization under section 1876 of the Act;
(iii) A program of all-inclusive care for the elderly (PACE) under 1894 of the Act; or
(iv) A social health maintenance organization (SHMO) demonstration project established under section 4018(b) of the Omnibus Budget Reconciliation Act of 1987.
(b)
(1) Surgical pathology services.
(2) Specific cytopathology, hematology, and blood banking services that have been identified to require performance by a physician and are listed in program operating instructions.
(3) Clinical consultation services that meet the requirements in paragraph (c) of this section.
(4) Clinical laboratory interpretative services that meet the requirements of paragraphs (c)(1), (c)(3), and (c)(4) of this section and that are specifically listed in program operating instructions.
(c)
(1) Be requested by the beneficiary's attending physician.
(2) Relate to a test result that lies outside the clinically significant normal or expected range in view of the condition of the beneficiary.
(3) Result in a written narrative report included in the beneficiary's medical record.
(4) Require the exercise of medical judgment by the consultant physician.
(d)
(2) For services furnished after December 31, 2010, an independent laboratory may not bill the Medicare contractor for the technical component of physician pathology services furnished to a hospital inpatient or outpatient.
(3) For services furnished on or after January 1, 2008, the date of service policy in § 414.510 of this chapter applies to the TC of specimens for physician pathology services.
This subpart sets forth the rules governing payment for the services of physicians in teaching settings and the criteria for determining whether the payments are made as one of the following:
(a) Services to the hospital under the reasonable cost election in §§ 415.160 through 415.164.
(b) Provider services through the direct GME payment mechanism in §§ 413.75 through 413.83 of this chapter.
(c) Physician services to beneficiaries under the physician fee schedule as set forth in part 414 of this chapter.
As used in this subpart—
(1) A residency program approved by the Accreditation Council for Graduate Medical Education, by the American Osteopathic Association, by the Commission on Dental Accreditation of the American Dental Association, or by the Council on Podiatric Medical Education of the American Podiatric Medical Association.
(2) A program otherwise recognized as an “approved medical residency program” under § 413.75(b) of this chapter.
(1) An individual who participates in an approved GME program, including programs in osteopathy, dentistry, and podiatry.
(2) A physician who is not in an approved GME program, but who is authorized to practice only in a hospital, for example, individuals with temporary or restricted licenses, or unlicensed graduates of foreign medical schools. For purposes of this subpart, the term
(a)
(b)
(1) The hospital notifies its intermediary in writing of the election and meets the conditions of either paragraph (b)(2) or paragraph (b)(3) of this section;
(2) All physicians who furnish services to Medicare beneficiaries in the hospital agree not to bill charges for these services; or
(3) All physicians who furnish services to Medicare beneficiaries in the hospital are employees of the hospital and, as a condition of employment, are precluded from billing for these services.
(c)
(1) Those services and the supervision of interns and residents furnishing care to individual beneficiaries are covered as hospital services, and
(2) The intermediary pays the hospital for those services on a reasonable cost basis under the rules in § 415.162. (Payment for other physician compensation costs related to approved GME programs is made as described in § 413.78 of this chapter.)
(d)
(1) For physician services furnished to beneficiaries on a fee schedule basis as described in part 414 subject to the rules in this subpart, and
(2) For the supervision of interns and residents as described in §§ 413.75 through 413.83.
(a)
(1) Physician services furnished to beneficiaries and supervision of interns and residents furnishing care to beneficiaries are paid on a reasonable-cost basis, as provided for in paragraph (b) of this section.
(2) Payment for certain medical school costs may be made as provided for in paragraph (c) of this section.
(3) Payments for services donated by volunteer physicians to beneficiaries are made to a fund designated by the organized medical staff of the teaching hospital or medical school as provided for in paragraph (d) of this section.
(b)
(2) For purposes of this paragraph,
(3) The costs must be allocated to the services as provided by paragraph (j) of this section and apportioned to program beneficiaries as provided by paragraph (g) of this section.
(4) Other allowable costs incurred by the provider related to the services described in this paragraph are payable subject to the requirements applicable to all other provider services.
(c)
(1)
(A) The costs of these services are allowable costs to the hospital under the provisions of § 413.17 of this chapter; and
(B) The reimbursable costs to the hospital are determined under the provisions of this section in the same manner as the costs incurred for physicians on the hospital staff and without regard to payments made to the medical school by the hospital.
(ii)
(B) Costs incurred under an arrangement must be allocated to the full range of services furnished to the hospital by the medical school physicians on the same basis as provided for under paragraph (j) of this section, and costs allocated to direct medical and surgical services furnished to hospital patients must be apportioned to beneficiaries as provided for under paragraph (g) of this section.
(C) If the medical school and the hospital are not related organizations under the provisions of § 413.17 of this chapter and the hospital makes payment to the medical school only for the costs of those services furnished to beneficiaries, costs of the medical school not to exceed 105 percent of the sum of physician direct salaries, applicable fringe benefits, employer's portion of FICA taxes, Federal and State unemployment taxes, and workmen's compensation paid by the medical school or an organization related to the medical school may be recognized as allowable costs of the medical school.
(D) These allowable medical school costs must be allocated to the full range of services furnished by the physicians of the medical school or organization related as provided by paragraph (j) of this section.
(E) Costs allocated to direct medical and surgical services furnished to hospital patients must be apportioned to beneficiaries as provided by paragraph (g) of this section.
(2)
(i) If the hospital makes payment to the medical school for other than direct medical and surgical services furnished to beneficiaries and supervision of interns and residents furnishing care to beneficiaries, these payments are subject to the required cost-finding and apportionment methods applicable to the cost of other hospital services (except for direct medical and surgical services furnished to beneficiaries); or
(ii) If the hospital makes payment to the medical school only for these services furnished to beneficiaries, the cost of these services is not subject to cost-finding and apportionment as otherwise provided by this subpart, and the reasonable cost paid by Medicare must be determined on the basis of the health insurance ratio(s) used in the apportionment of all other provider costs (excluding physician direct medical and surgical services furnished to beneficiaries) applied to the allowable
(d)
(i) These payments represent compensation for contributed medical staff time which, if not contributed, would have to be obtained through employed staff on a payable basis.
(ii) Payments for volunteer services are determined by applying to the regularly scheduled contributed time an hourly rate not to exceed the equivalent of the average direct salary (exclusive of fringe benefits) paid to all full-time, salaried physicians (other than interns and residents) on the hospital staff or, if the number of full-time salaried physicians is minimal in absolute terms or in relation to the number of physicians on the voluntary staff, to physicians at like institutions in the area.
(iii) This “salary equivalent” is a single hourly rate covering all physicians regardless of specialty and is applied to the actual regularly scheduled time contributed by the physicians in furnishing direct medical and surgical services to beneficiaries including supervision of interns and residents in that care.
(iv) A physician who receives any compensation from the hospital or a medical school related to the hospital by common ownership or control (within the meaning of § 413.17 of this chapter) for direct medical and surgical services furnished to any patient in the hospital is not considered an unpaid voluntary physician for purposes of this paragraph.
(v) If, however, a physician receives compensation from the hospital or related medical school or organization only for services that are other than direct medical and surgical services, a salary equivalent payment for the physician's regularly scheduled direct medical and surgical services to beneficiaries in the hospital may be imputed. However, the sum of the imputed value for volunteer services and the physician's actual compensation from the hospital and the related medical school (or organization) may not exceed the amount that would have been imputed if all of the physician's hospital and medical school services (compensated and volunteer) had been volunteer services, or paid at the rate of $30,000 per year, whichever is less.
(2) The following examples illustrate how the allowable imputed value for volunteer services is determined. In each example, it has been assumed that the average salary equivalent hourly rate is equal to the hourly rate for the individual physician's compensated services.
Dr. Jones received $3,000 a year from Hospital X for services other than direct medical services to all patients, for example, utilization review and administrative services. Dr. Jones also voluntarily furnished direct medical services to beneficiaries. The imputed value of the volunteer services amounted to $10,000 for the cost reporting period. The full imputed value of Dr. Jones' volunteer direct medical services would be allowed since the total amount of the imputed value ($10,000) and the compensated services ($3,000) does not exceed $30,000.
Dr. Smith received $25,000 from Hospital X for services as a department head in a teaching hospital. Dr. Smith also voluntarily furnished direct medical services to beneficiaries. The imputed value of the volunteer services amounted to $10,000. Only $5,000 of the imputed value of volunteer services would be allowed since the total amount of the imputed value ($10,000) and the compensated services ($25,000) exceeds the $30,000 maximum amount allowable for all of Dr. Smith's services.
Dr. Brown is not compensated by Hospital X for any services furnished in the hospital. Dr. Brown voluntarily
(3) The amount of the imputed value for volunteer services applicable to beneficiaries and payable to a fund is determined in accordance with the aggregate per diem method described in paragraph (g) of this section.
(4) Medicare payments to a fund must be used by the fund solely for improvement of care of hospital patients or for educational or charitable purposes (which may include but are not limited to medical and other scientific research).
(i) No personal financial gain, either direct or indirect, from benefits of the fund may inure to any of the hospital staff physicians, medical school faculty, or physicians for whom Medicare imputes costs for purposes of payment into the fund.
(ii) Expenses met from contributions made to the hospital from a fund are not included as a reimbursable cost when expended by the hospital, and depreciation expense is not allowed with respect to equipment or facilities donated to the hospital by a fund or purchased by the hospital from monies in a fund.
(e)
(2)
(i) There is a written agreement between the hospital and the medical school or organization, specifying the types and extent of services to be furnished by the medical school and specifying that the hospital must pay to the medical school an amount at least equal to the reasonable cost (as defined in paragraph (c) of this section) of furnishing the services to beneficiaries.
(ii) The costs are paid to the medical school by the hospital no later than the date on which the cost report covering the period in which the services were furnished is due to CMS.
(iii) Payment for the services furnished under an arrangement would have been made to the hospital had the services been furnished directly by the hospital.
(3)
(f)
(g)
(i) Physicians on the hospital staff.
(ii) Physicians on the medical school faculty.
(2)
(h)
(i) Inpatient days (as defined in paragraph (h)(2) of this section); and
(ii) Outpatient visit days (as defined in paragraph (h)(3) of this section).
(2)
(3)
(i)
Computation of cost applicable to program for physicians on the hospital staff:
Average cost per diem for direct medical and surgical services to patients by physicians on the hospital staff: $1,500,000 ÷ 75,000 = $20 per diem.
Computation of cost applicable to program for physicians on the medical school faculty:
Average cost per diem for direct medical and surgical services to patients by physicians on the medical school faculty: $1,650,000 ÷ 75,000 = $22 per diem.
(2) The following illustrates how the imputed value of physician volunteer direct medical and surgical services furnished in a teaching hospital to beneficiaries is determined.
The physicians on the medical staff of Teaching Hospital Y donated a total of 5,000 hours in furnishing direct medical
Computation of total imputed value of physician volunteer services applicable to all patients:
Computation of imputed value of physician volunteer direct medical and surgical services furnished to Medicare beneficiaries:
Average per diem for physician direct medical and surgical services to all patients: $96,150 ÷ 75,000 = $1.28 per diem
(j)
(2) This allocation must be made and must be capable of substantiation on the basis of the proportion of each physician's time spent in furnishing each type of service to the hospital or medical school.
(a)
(1) The hospital (or medical school furnishing the services under arrangement with the hospital) incurs no actual cost in furnishing the services.
(2) The hospital has an agreement with CMS under part 489 of this chapter.
(3) The intermediary, or CMS as appropriate, has received written assurances that—
(i) The payment is used solely for the improvement of care of hospital patients or for educational or charitable purposes; and
(ii) Neither the individuals who are furnished the services nor any other persons are charged for the services (and if charged, provision is made for the return of any monies incorrectly collected).
(b)
(1) The organization has and retains exemption, as a governmental entity or
(2) The organization is an organization of physicians who, under the terms of their employment by an entity that meets the requirements of paragraph (b)(1) of this section, are required to turn over to that entity all income that the physician organization derives from the physician services.
(c)
Services meeting the conditions for payment in § 415.102(a) furnished in teaching settings are payable under the physician fee schedule if—
(a) The services are personally furnished by a physician who is not a resident; or
(b) The services are furnished by a resident in the presence of a teaching physician except as provided in § 415.172 (concerning physician fee schedule payment for services of teaching physicians), § 415.174 (concerning an exception for services furnished in hospital outpatient and certain other ambulatory settings), § 415.176 (concerning renal dialysis services), and § 415.184 (concerning psychiatric services), as applicable.
(a)
(1) In the case of surgical, high-risk, or other complex procedures, the teaching physician must be present during all critical portions of the procedure and immediately available to furnish services during the entire service or procedure.
(i) In the case of surgery, the teaching physician's presence is not required during opening and closing of the surgical field.
(ii) In the case of procedures performed through an endoscope, the teaching physician must be present during the entire viewing.
(2) In the case of evaluation and management services, the teaching physician must be present during the portion of the service that determines the level of service billed. (However, in the case of evaluation and management services furnished in hospital outpatient departments and certain other ambulatory settings, the requirements of § 415.174 apply.)
(b)
(c)
(a) In the case of certain evaluation and management codes of lower and mid-level complexity (as specified by CMS in program instructions), carriers may make physician fee schedule payment for a service furnished by a resident without the presence of a teaching physician. For the exception to apply,
(1) The services must be furnished in a center that is located in an outpatient department of a hospital or another ambulatory care entity in which the time spent by residents in patient care activities is included in determining intermediary payments to a hospital under §§ 413.75 through 413.83.
(2) Any resident furnishing the service without the presence of a teaching physician must have completed more than 6 months of an approved residency program.
(3) The teaching physician must not direct the care of more than four residents at any given time and must direct the care from such proximity as to constitute immediate availability. The teaching physician must—
(i) Have no other responsibilities at the time;
(ii) Assume management responsibility for those beneficiaries seen by the residents;
(iii) Ensure that the services furnished are appropriate;
(iv) Review with each resident during or immediately after each visit, the beneficiary's medical history, physical examination, diagnosis, and record of tests and therapies; and
(v) Document the extent of the teaching physician's participation in the review and direction of the services furnished to each beneficiary.
(4) The range of services furnished by residents in the center includes all of the following:
(i) Acute care for undifferentiated problems or chronic care for ongoing conditions.
(ii) Coordination of care furnished by other physicians and providers.
(iii) Comprehensive care not limited by organ system, or diagnosis.
(5) The patients seen must be an identifiable group of individuals who consider the center to be the continuing source of their health care and in which services are furnished by residents under the medical direction of teaching physicians.
(b) Nothing in paragraph (a) of this section may be construed as providing a basis for the coverage of services not determined to be covered under Medicare, such as routine physical checkups.
In the case of renal dialysis services, physicians who are not paid under the physician monthly capitation payment method (as described in § 414.314 of this chapter) must meet the requirements of §§ 415.170 and 415.172 (concerning physician fee schedule payment for services of teaching physicians).
(a)
(2)
(b)
(a)
(b)
To qualify for physician fee schedule payment for psychiatric services furnished under an approved GME program, the physician must meet the requirements of §§ 415.170 and 415.172, including documentation, except that the requirement for the presence of the teaching physician during the service in which a resident is involved may be met by observation of the service by use of a one-way mirror, video equipment, or similar device.
(a)
(1) A training program relating to the medical specialty required for the surgical procedure; and
(2) A resident in a training program relating to the specialty required for the surgery available to serve as an assistant at surgery.
(b)
(c)
(1) Are required as a result of exceptional medical circumstances.
(2) Are complex medical procedures performed by a team of physicians, each performing a discrete, unique function integral to the performance of a complex medical procedure that requires the special skills of more than one physician.
(3) Constitute concurrent medical care relating to a medical condition that requires the presence of, and active care by, a physician of another specialty during surgery.
(4) Are medically required and are furnished by a physician who is primarily engaged in the field of surgery, and the primary surgeon does not use interns and residents in the surgical procedures that the surgeon performs (including preoperative and postoperative care).
(5) Are not related to a surgical procedure for which CMS determines that assistants are used less than 5 percent of the time.
(a)
(b)
(c)
(a)
(b)
(a)
(1)
(2)
(b)
Patient care activities of residents in approved GME programs that are furnished in nonprovider settings are payable in one of the following two ways:
(a)
(b)
(i) The resident is fully licensed to practice medicine, osteopathy, dentistry, or podiatry in the State in which the service is performed.
(ii) The time spent in patient care activities in the nonprovider setting is not included in a teaching hospital's full-time equivalency resident count for the purpose of direct GME payments.
(2) Payment may be made regardless of whether a resident is functioning within the scope of his or her GME program in the nonprovider setting.
(3) If fee schedule payment is made for the resident's services in a nonprovider setting, payment must not be made for the services of a teaching physician.
(4) The carrier must apply the physician fee schedule payment rules set forth in subpart A of part 414 of this
(a)
(b)
(2) Services of residents that are not related to their approved GME programs and are performed in an outpatient department or emergency department of a hospital in which they have their training program are covered as physician services and payable under the physician fee schedule if all of the following criteria are met:
(i) The services are identifiable physician services and meet the conditions for payment of physician services to beneficiaries in providers in § 415.102(a).
(ii) The resident is fully licensed to practice medicine, osteopathy, dentistry, or podiatry by the State in which the services are performed.
(iii) The services performed can be separately identified from those services that are required as part of the approved GME program.
(3) If the criteria specified in paragraph (b)(2) of this section are met, the services of the moonlighting resident are considered to have been furnished by the individual in his or her capacity as a physician, rather than in the capacity of a resident. The carrier must review the contracts and agreements for these services to ensure compliance with the criteria specified in paragraph (b)(2) of this section.
(4) No payment is made for services of a “teaching physician” associated with moonlighting services, and the time spent furnishing these services is not included in the teaching hospital's full-time equivalency count for the indirect GME payment (§ 412.105 of this chapter) and for the direct GME payment (§§ 413.75 through 413.83 of this chapter).
(c)
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
(a)
(2) Section 1833(i)(1)(A) of the Act requires the Secretary to specify the surgical procedures that can be performed safely on an ambulatory basis in an ambulatory surgical center.
(3) Sections 1833(i)(2)(A) and (D) and 1833(a)(1)(G) of the Act specify the amounts to be paid for facility services furnished in connection with the specified surgical procedures when they are performed in an ASC.
(4) Section 1833(i)(2)(C) of the Act provides that if the Secretary has not updated amounts for ASC facility services furnished during a fiscal year through 2005 or a calendar year beginning with 2006, the amounts shall be increased by the percentage increase in the Consumer Price Index for all urban consumers as estimated by the Secretary for the 12-month period ending with the midpoint of the year involved, except that, in fiscal year 2005, the last quarter of calendar year 2005, and each of the calendar years 2006 through 2009, the increase shall be zero percent.
(5) Section 1833(i)(2)(E) of the Act provides that, with respect to surgical procedures furnished on or after January 1, 2007, and before the effective date of the implementation of a revised payment system, the payment amount shall be the lesser of the ASC payment rate established under section 1833(i)(2)(A) of the Act or the prospective payment rate for hospital outpatient department services established under section 1833(t)(3)(D) of the Act. The lesser payment amount shall be determined prior to application of any geographic adjustment.
(b)
(1) The conditions that an ASC must meet in order to participate in the Medicare program;
(2) The scope of covered services; and
(3) The conditions for Medicare payment for facility services.
As used in this part:
Participation as an ASC is limited to facilities that—
(a) Meet the definition in § 416.2; and
(b) Have in effect an agreement obtained in accordance with this subpart.
(a)
(1) The ASC is accredited by a national accrediting body, or licensed by a State agency, that CMS determines provides reasonable assurance that the conditions are met;
(2) In the case of deemed status through accreditation by a national accrediting body, where State law requires licensure, the ASC complies with State licensure requirements; and
(3) The ASC authorizes the release to CMS, of the findings of the accreditation survey.
(b)
(2) CMS surveys deemed ASCs on a sample basis as part of CMS's validation process.
(c)
(1) Written notice of the determination; and
(2) Two copies of the ASC agreement.
(d)
(1) Have both copies of the ASC agreement signed by its authorized representative; and
(2) File them with CMS.
(e)
(f)
As part of the agreement under § 416.26 the ASC must agree to the following:
(a)
(b)
(1) Is entitled to have payment made on his or her behalf under this part; or
(2) Would have been so entitled if the ASC had filed a request for payment in accordance with § 410.165 of this chapter.
(c)
(2) As used in this section,
(i) The beneficiary is later determined to have been entitled to Medicare benefits; and
(ii) The beneficiary's entitlement period falls within the time the ASC's agreement with CMS is in effect.
(d)
(e)
(f)
(1) The agreement is made effective on the first day of the next Medicare cost reporting period of the hospital that operates the ASC; and
(2) The ASC participates and is paid only as an ASC.
(3) Costs for the ASC are treated as a non-reimbursable cost center on the hopsital's cost report.
(g)
(a)
(2)
(i) If the notice does not specify a date, or the date is not acceptable to CMS, CMS may set a date that will not be more than 6 months from the date on the ASC's notice of intent.
(ii) CMS may accept a termination date that is less than 6 months after the date on the ASC's notice if it determines that to do so would not unduly disrupt services to the community or otherwise interfere with the effective
(3)
(b)
(i) No longer meets the conditions for coverage as specified under § 416.26; or
(ii) Is not in substantial compliance with the provisions of the agreement, the requirements of this subpart, and other applicable regulations of subchapter B of this chapter, or any applicable provisions of title XVIII of the Act.
(2)
(3)
(c)
(d)
(1) The ASC, after CMS has approved or set a termination date; or
(2) CMS, when it has terminated the agreement.
(e)
(1) Finds that the reason for the termination of the prior agreement has been removed; and
(2) Is assured that the reason for the termination will not recur.
The ASC must comply with State licensure requirements.
The ASC must have a governing body that assumes full legal responsibility for determining, implementing, and monitoring policies governing the ASC's total operation. The governing body has oversight and accountability for the quality assessment and performance improvement program, ensures that facility policies and programs are administered so as to provide quality health care in a safe environment, and develops and maintains a disaster preparedness plan.
(a)
(b)
(2) This hospital must be a local, Medicare-participating hospital or a local, nonparticipating hospital that meets the requirements for payment for emergency services under § 482.2 of this chapter.
(3) The ASC must—
(i) Have a written transfer agreement with a hospital that meets the requirements of paragraph (b)(2) of this section; or
(ii) Ensure that all physicians performing surgery in the ASC have admitting privileges at a hospital that meets the requirements of paragraph (b)(2) of this section.
(c)
(2) The ASC coordinates the plan with State and local authorities, as appropriate.
(3) The ASC conducts drills, at least annually, to test the plan's effectiveness. The ASC must complete a written evaluation of each drill and promptly implement any corrections to the plan.
Surgical procedures must be performed in a safe manner by qualified physicians who have been granted clinical privileges by the governing body of the ASC in accordance with approved policies and procedures of the ASC.
(a)
(2) Before discharge from the ASC, each patient must be evaluated by a physician or by an anesthetist as defined at § 410.69(b) of this chapter, in accordance with applicable State health and safety laws, standards of practice, and ASC policy, for proper anesthesia recovery.
(b)
(1) A qualified anesthesiologist; or
(2) A physician qualified to administer anesthesia, a certified registered nurse anesthetist (CRNA) or an anesthesiologist's assistant as defined in § 410.69(b) of this chapter, or a supervised trainee in an approved educational program. In those cases in which a non-physician administers the anesthesia, unless exempted in accordance with paragraph (d) of this section, the anesthetist must be under the supervision of the operating physician, and in the case of an anesthesiologist's assistant, under the supervision of an anesthesiologist.
(c)
(2) The request for exemption and recognition of State laws, and the withdrawal of the request may be submitted at any time, and are effective upon submission.
The ASC must develop, implement and maintain an ongoing, data-driven quality assessment and performance improvement (QAPI) program.
(a)
(2) The ASC must measure, analyze, and track quality indicators, adverse patient events, infection control and other aspects of performance that includes care and services furnished in the ASC.
(b)
(2) The ASC must use the data collected to—
(i) Monitor the effectiveness and safety of its services, and quality of its care.
(ii) Identify opportunities that could lead to improvements and changes in its patient care.
(c)
(i) Focus on high risk, high volume, and problem-prone areas.
(ii) Consider incidence, prevalence, and severity of problems in those areas.
(iii) Affect health outcomes, patient safety, and quality of care.
(2) Performance improvement activities must track adverse patient events, examine their causes, implement improvements, and ensure that improvements are sustained over time.
(3) The ASC must implement preventive strategies throughout the facility targeting adverse patient events and ensure that all staff are familiar with these strategies.
(d)
(2) The ASC must document the projects that are being conducted. The documentation, at a minimum, must include the reason(s) for implementing the project, and a description of the project's results.
(e)
(1) Is defined, implemented, and maintained by the ASC.
(2) Addresses the ASC's priorities and that all improvements are evaluated for effectiveness.
(3) Specifies data collection methods, frequency, and details.
(4) Clearly establishes its expectations for safety.
(5) Adequately allocates sufficient staff, time, information systems and training to implement the QAPI program.
The ASC must have a safe and sanitary environment, properly constructed, equipped, and maintained to protect the health and safety of patients.
(a)
(1) Each operating room must be designed and equipped so that the types of surgery conducted can be performed in a manner that protects the lives and assures the physical safety of all individuals in the area.
(2) The ASC must have a separate recovery room and waiting area.
(3) The ASC must establish a program for identifying and preventing infections, maintaining a sanitary environment, and reporting the results to appropriate authorities.
(b)
(2) In consideration of a recommendation by the State survey agency, CMS may waive, for periods deemed appropriate, specific provisions of the Life Safety Code which, if rigidly applied, would result in unreasonable hardship upon an ASC, but only if
(3) The provisions of the Life Safety Code do not apply in a State if CMS finds that a fire and safety code imposed by State law adequately protects patients in an ASC.
(4) An ASC must be in compliance with Chapter 21.2.9.1, Emergency Lighting, beginning on March 13, 2006.
(5) Notwithstanding any provisions of the 2000 edition of the Life Safety Code to the contrary, an ASC may place alcohol-based hand rub dispensers in its facility if—
(i) Use of alcohol-based hand rub dispensers does not conflict with any State or local codes that prohibit or otherwise restrict the placement of alcohol-based hand rub dispensers in health care facilities;
(ii) The dispensers are installed in a manner that minimizes leaks and spills that could lead to falls;
(iii) The dispensers are installed in a manner that adequately protects against inappropriate access;
(iv) The dispensers are installed in accordance with the following provisions:
(A) Where dispensers are installed in a corridor, the corridor shall have a minimum width of 6 ft (1.8m);
(B) The maximum individual dispenser fluid capacity shall be:
(
(
(C) The dispensers shall have a minimum horizontal spacing of 4 ft (1.2m) from each other;
(D) Not more than an aggregate 10 gallons (37.8 liters) of ABHR solution shall be in use in a single smoke compartment outside of a storage cabinet;
(E) Storage of quantities greater than 5 gallons (18.9 liters) in a single smoke compartment shall meet the requirements of NFPA 30,
(F) The dispensers shall not be installed over or directly adjacent to an ignition source;
(G) In locations with carpeted floor coverings, dispensers installed directly over carpeted surfaces shall be permitted only in sprinklered smoke compartments; and
(v) The dispensers are maintained in accordance with dispenser manufacturer guidelines.
(c)
(1) Emergency call system.
(2) Oxygen.
(3) Mechanical ventilatory assistance equipment including airways, manual breathing bag, and ventilator.
(4) Cardiac defibrillator.
(5) Cardiac monitoring equipment.
(6) Tracheostomy set.
(7) Laryngoscopes and endotracheal tubes.
(8) Suction equipment.
(9) Emergency medical equipment and supplies specified by the medical staff.
(d)
The medical staff of the ASC must be accountable to the governing body.
(a)
(b)
(c)
The nursing services of the ASC must be directed and staffed to assure that the nursing needs of all patients are met.
(a)
(b) [Reserved]
The ASC must maintain complete, comprehensive, and accurate medical records to ensure adequate patient care.
(a)
(b)
(1) Patient identification.
(2) Significant medical history and results of physical examination.
(3) Pre-operative diagnostic studies (entered before surgery), if performed.
(4) Findings and techniques of the operation, including a pathologist's report on all tissues removed during surgery, except those exempted by the governing body.
(5) Any allergies and abnormal drug reactions.
(6) Entries related to anesthesia administration.
(7) Documentation of properly executed informed patient consent.
(8) Discharge diagnosis.
The ASC must provide drugs and biologicals in a safe and effective manner, in accordance with accepted professional practice, and under the direction of an individual designated responsible for pharmaceutical services.
(a)
(1) Adverse reactions must be reported to the physician responsible for the patient and must be documented in the record.
(2) Blood and blood products must be administered by only physicians or registered nurses.
(3) Orders given orally for drugs and biologicals must be followed by a written order, signed by the prescribing physician.
(b) [Reserved]
(a)
(b)
(2) Radiologic services must meet the hospital conditions of participation for radiologic services specified in § 482.26 of this chapter.
The ASC must inform the patient or the patient's representative of the patient's rights, and must protect and promote the exercise of such rights.
(a)
(i) Post the written notice of patient rights in a place or places within the ASC likely to be noticed by patients (or their representative, if applicable) waiting for treatment. The ASC's notice of rights must include the name, address, and telephone number of a representative in the State agency to whom patients can report complaints, as well as the Web site for the Office of the Medicare Beneficiary Ombudsman.
(ii) The ASC must also disclose, where applicable, physician financial interests or ownership in the ASC facility in accordance with the intent of Part 420 of this subchapter. Disclosure of information must be in writing and furnished to the patient in advance of the date of the procedure.
(2)
(i) Provide the patient or, as appropriate, the patient's representative in advance of the date of the procedure, with information concerning its policies on advance directives, including a description of applicable State health and safety laws and, if requested, official State advance directive forms.
(ii) Inform the patient or, as appropriate, the patient's representative of the patient's right to make informed decisions regarding the patient's care.
(iii) Document in a prominent part of the patient's current medical record, whether or not the individual has executed an advance directive.
(3)
(ii) All alleged violations/grievances relating, but not limited to, mistreatment, neglect, verbal, mental, sexual, or physical abuse, must be fully documented.
(iii) All allegations must be immediately reported to a person in authority in the ASC.
(iv) Only substantiated allegations must be reported to the State authority or the local authority, or both.
(v) The grievance process must specify timeframes for review of the grievance and the provisions of a response.
(vi) The ASC, in responding to the grievance, must investigate all grievances made by a patient or the patient's representative regarding treatment or care that is (or fails to be) furnished.
(vii) The ASC must document how the grievance was addressed, as well as provide the patient with written notice of its decision. The decision must contain the name of an ASC contact person, the steps taken to investigate the grievance, the results of the grievance process, and the date the grievance process was completed.
(b)
(i) Exercise his or her rights without being subjected to discrimination or reprisal.
(ii) Voice grievances regarding treatment or care that is (or fails to be) furnished.
(iii) Be fully informed about a treatment or procedure and the expected outcome before it is performed.
(2) If a patient is adjudged incompetent under applicable State health and safety laws by a court of proper jurisdiction, the rights of the patient are exercised by the person appointed under State law to act on the patient's behalf.
(3) If a State court has not adjudged a patient incompetent, any legal representative designated by the patient in accordance with State law may exercise the patient's rights to the extent allowed by State law.
(c)
(1) Personal privacy.
(2) Receive care in a safe setting.
(3) Be free from all forms of abuse or harassment.
(d)
The ASC must maintain an infection control program that seeks to minimize infections and communicable diseases.
(a)
(b)
(1) Under the direction of a designated and qualified professional who has training in infection control;
(2) An integral part of the ASC's quality assessment and performance improvement program; and
(3) Responsible for providing a plan of action for preventing, identifying, and managing infections and communicable diseases and for immediately implementing corrective and preventive measures that result in improvement.
The ASC must ensure each patient has the appropriate pre-surgical and post-surgical assessments completed and that all elements of the discharge requirements are completed.
(a)
(2) Upon admission, each patient must have a pre-surgical assessment completed by a physician or other qualified practitioner in accordance with applicable State health and safety laws, standards of practice, and ASC policy that includes, at a minimum, an updated medical record entry documenting an examination for any changes in the patient's condition since completion of the most recently documented medical history and physical assessment, including documentation of any allergies to drugs and biologicals.
(3) The patient's medical history and physical assessment must be placed in the patient's medical record prior to the surgical procedure.
(b)
(2) Post-surgical needs must be addressed and included in the discharge notes.
(c)
(1) Provide each patient with written discharge instructions and overnight supplies. When appropriate, make a followup appointment with the physician, and ensure that all patients are informed, either in advance of their surgical procedure or prior to leaving the ASC, of their prescriptions, post-operative instructions and physician contact information for followup care.
(2) Ensure each patient has a discharge order, signed by the physician who performed the surgery or procedure in accordance with applicable State health and safety laws, standards of practice, and ASC policy.
(3) Ensure all patients are discharged in the company of a responsible adult, except those patients exempted by the attending physician.
(a) The services payable under this part are facility services furnished to Medicare beneficiaries, by a participating facility, in connection with covered surgical procedures specified in § 416.65.
(b) The surgical procedures, including all preoperative and post-operative services that are performed by a physician, are covered as physician services under part 410 of this chapter.
(a)
(1) Nursing, technician, and related services;
(2) Use of the facilities where the surgical procedures are performed;
(3) Drugs, biologicals, surgical dressings, supplies, splints, casts, and appliances and equipment directly related to the provision of surgical procedures;
(4) Diagnostic or therapeutic services or items directly related to the provision of a surgical procedure;
(5) Administrative, recordkeeping and housekeeping items and services; and
(6) Materials for anesthesia.
(7) Intra-ocular lenses (IOLs).
(8) Supervision of the services of an anesthetist by the operating surgeon.
(b)
Effective for services furnished before January 1, 2008, covered surgical procedures are those procedures that meet the standards described in paragraphs (a) and (b) of this section and are included in the list published in accordance with paragraph (c) of this section.
(a)
(1) Are commonly performed on an inpatient basis in hospitals, but may be safely performed in an ASC;
(2) Are not of a type that are commonly performed, or that may be safely performed, in physicians' offices;
(3) Are limited to those requiring a dedicated operating room (or suite), and generally requiring a post-operative recovery room or short-term (not overnight) convalescent room; and
(4) Are not otherwise excluded under § 411.15 of this chapter.
(b)
(i) A total of 90 minutes operating time; and
(ii) A total of 4 hours recovery or convalescent time.
(2) If the covered surgical procedures require anesthesia, the anesthesia must be—
(i) Local or regional anesthesia; or
(ii) General anesthesia of 90 minutes or less duration.
(3) Covered surgical procedures may not be of a type that—
(i) Generally result in extensive blood loss;
(ii) Require major or prolonged invasion of body cavities;
(iii) Directly involve major blood vessels; or
(iv) Are generally emergency or life-threatening in nature.
(c)
The inclusion of any procedure as a covered surgical procedure under § 416.65 does not preclude its coverage in an inpatient hospital setting under Medicare.
The provisions of this subpart apply to facility services furnished before January 1, 2008.
The basis for payment depends on where the services are furnished.
(a)
(b) [Reserved]
(c)
(2)
(ii) If more than one surgical procedure is furnished in a single operative session, payment is based on—
(A) The full rate for the procedure with the highest prospectively determined rate; and
(B) One half of the prospectively determined rate for each of the other procedures.
(3)
The provisions of this subpart apply to facility services furnished before January 1, 2008.
(a) The payment rate is based on a prospectively determined standard overhead amount per procedure derived from an estimate of the costs incurred by ambulatory surgical centers generally in providing services furnished in connection with the performance of that procedure.
(b) The payment must be substantially less than would have been paid under the program if the procedure had been performed on an inpatient basis in a hospital.
(c) For services furnished on or after January 1, 2007, and before the effective date of implementation of a revised payment system, the ASC payment rate for a surgical procedure is the lesser of the ASC payment rate established under paragraph (a) of this section or the prospective payment rate for the procedure established under § 419.32 of this chapter. The lesser payment amount is determined prior to application of any geographic adjustment.
Whenever CMS proposes to revise the payment rate for ASCs, CMS publishes a notice in the
(a)
(2) CMS notifies the selected ASCs by mail of their selection and of the form and content of the report the ASCs are required to submit within 60 days of the notice.
(3) If the facility does not submit an adequate report in response to CMS's survey request, CMS may terminate the agreement to participate in the Medicare program as an ASC.
(4) CMS may grant a 30-day postponement of the due date for the survey report if it determines that the facility has demonstrated good cause for the delay.
(b)
(1) Maintain adequate financial records, in the form and containing the data required by CMS, to allow determination of the payment rates for covered surgical procedures furnished to Medicare beneficiaries under this subpart.
(2) Within 60 days of a request from CMS submit, in the form and detail as may be required by CMS, a report of—
(i) Their operations, including the allowable costs actually incurred for the period and the actual number and kinds of surgical procedures furnished during the period; and
(ii) Their customary charges for each surgical procedure furnished for the period.
(a)
(2) Section 1833(a)(1)(G) of the Act provides that, beginning with the implementation date of a revised payment system for ASC facility services furnished in connection with a surgical procedure pursuant to section 1833(i)(1)(A) of the Act, the amount paid shall be 80 percent of the lesser of the actual charge for such services or the amount determined by the Secretary under the revised payment system.
(3) Section 1833(i)(1)(A) of the Act requires the Secretary to specify the surgical procedures that can be performed safely on an ambulatory basis in an ASC.
(4) Section 1834(d) of the Act specifies that, when screening colonoscopies or screening flexible sigmoidoscopies are performed in an ASC or hospital outpatient department, payment shall be based on the lesser of the amount under the fee schedule that would apply to such services if they were performed in a hospital outpatient department in an area or the amount under the fee schedule that would apply to such services if they were performed in an ambulatory surgical center in the same area. Section 1834(d) of the Act also specifies that, in the case of
(5) Section 1833(a)(1) of the Act requires 100 percent payment for preventive services described in section 1861(ww)(2) of the Act (excluding electrocardiograms) to which the United States Preventive Services Task Force (USPSTF) has given a grade of A or B for any indication or population. Section 1833(b)(1) of the Act also specifies that the Part B deductible shall not apply with respect to preventive services described in section 1861(ww)(2) of the Act (excluding electrocardiograms) to which the USPSTF has given a grade of A or B for any indication or population.
(b)
(1) The scope of ASC services and the criteria for determining the covered surgical procedures for which Medicare provides payment for the associated facility services and covered ancillary services;
(2) The basis of payment for facility services and for covered ancillary services furnished in an ASC in connection with a covered surgical procedure;
(3) The methodologies by which Medicare determines payment amounts for ASC services.
The provisions of this subpart apply to ASC services furnished on or after January 1, 2008.
(a) Payment is made under this subpart for ASC services specified in §§ 416.164(a) and (b) furnished to Medicare beneficiaries by a participating ASC in connection with covered surgical procedures as determined by the Secretary in accordance with § 416.166.
(b) Payment for physicians' services and payment for anesthetists' services are made in accordance with part 414 of this subchapter.
(c) Payment for items and services other than physicians' and anesthetists' services, as specified in § 416.164(c), is made in accordance with § 410.152 of this subchapter.
(a)
(1) Nursing, technician, and related services;
(2) Use of the facility where the surgical procedures are performed;
(3) Any laboratory testing performed under a Clinical Laboratory Improvement Amendments of 1988 (CLIA) certificate of waiver;
(4) Drugs and biologicals for which separate payment is not allowed under the hospital outpatient prospective payment system (OPPS);
(5) Medical and surgical supplies not on pass-through status under Subpart G of Part 419 of this subchapter;
(6) Equipment;
(7) Surgical dressings;
(8) Implanted prosthetic devices, including intraocular lenses (IOLs), and related accessories and supplies not on pass-through status under subpart G of part 419 of this subchapter;
(9) Implanted DME and related accessories and supplies not on pass-through status under subpart G of part 419 of this subchapter;
(10) Splints and casts and related devices;
(11) Radiology services for which separate payment is not allowed under the OPPS, and other diagnostic tests or interpretive services that are integral to a surgical procedure;
(12) Administrative, recordkeeping and housekeeping items and services;
(13) Materials, including supplies and equipment for the administration and monitoring of anesthesia; and
(14) Supervision of the services of an anesthetist by the operating surgeon.
(b)
(1) Brachytherapy sources;
(2) Certain implantable items that have pass-through status under the OPPS;
(3) Certain items and services that CMS designates as contractor-priced, including, but not limited to, the procurement of corneal tissue;
(4) Certain drugs and biologicals for which separate payment is allowed under the OPPS;
(5) Certain radiology services for which separate payment is allowed under the OPPS.
(c)
(1) Physicians' services (including surgical procedures and all preoperative and postoperative services that are performed by a physician);
(2) Anesthetists' services;
(3) Radiology services (other than those integral to performance of a covered surgical procedure);
(4) Diagnostic procedures (other than those directly related to performance of a covered surgical procedure);
(5) Ambulance services;
(6) Leg, arm, back, and neck braces other than those that serve the function of a cast or splint;
(7) Artificial limbs;
(8) Nonimplantable prosthetic devices and DME.
(a)
(b)
(c)
(1) Generally result in extensive blood loss;
(2) Require major or prolonged invasion of body cavities;
(3) Directly involve major blood vessels;
(4) Are generally emergent or life-threatening in nature;
(5) Commonly require systemic thrombolytic therapy;
(6) Are designated as requiring inpatient care under § 419.22(n) of this subchapter;
(7) Can only be reported using a CPT unlisted surgical procedure code; or
(8) Are otherwise excluded under § 411.15 of this subchapter.
(a)
(b)
(2) For purposes of calculating ASC national payment rates under the methodology described in § 416.171, except as specified in paragraph (b)(3) of this section, an ASC relative payment weight is determined based on the APC relative payment weight for each covered surgical procedure and covered ancillary service that has an applicable APC relative payment weight described in § 419.31 of this subchapter.
(3) Notwithstanding paragraph (b)(2) of this section, the relative payment weights for services paid in accordance with § 416.171(d) are determined so that the national ASC payment rate does not exceed the unadjusted nonfacility practice expense amount paid under the Medicare physician fee schedule for such procedures under subpart B of part 414 of this subchapter.
(a)
(1)
(2)
(i) For CY 2009, the update is equal to zero percent.
(ii) For CY 2010 and subsequent calendar years, the update is the Consumer Price Index for All Urban Consumers (U.S. city average) as estimated by the Secretary for the 12-month period ending with the midpoint of the year involved.
(iii)
(B) The application of the provisions of paragraph (a)(2)(iii)(A) of this section may result in the update being less than 0.0 for a year, and may result in payment rates for a year being less than the payment rates for the preceding year.
(b)
(1) Covered ancillary services specified in § 416.164(b), with the exception of radiology services as provided in § 416.164(b)(5);
(2) Device-intensive procedures assigned to device-dependent APCs under the OPPS with device costs greater than 50 percent of the APC cost;
(3) Procedures using certain separately paid implantable devices that are approved for transitional pass-through payment in accordance with § 419.66 of this subchapter.
(c)
(2) ASC payment rates for CY 2009 are a transitional blend of 50 percent of the CY 2007 ASC payment rate for a covered surgical procedure on the CY 2007 ASC list of surgical procedures and 50 percent of the payment rate for the procedure calculated under the methodology described in paragraph (a) of this section.
(3) ASC payment rates for CY 2010 are a transitional blend of 25 percent of the CY 2007 ASC payment rate for a covered surgical procedure on the CY 2007 ASC list of surgical procedures and 75 percent of the payment rate for the procedure calculated under the methodology described in paragraph (a) of this section.
(4) The national ASC payment rate for CY 2011 and subsequent calendar years for a covered surgical procedure designated in accordance with § 416.166 is the payment rates for the procedure
(5) Covered ancillary services described in § 416.164(b) and surgical procedures identified as covered when performed in an ASC under § 416.166 for the first time beginning on or after January 1, 2008, are not subject to the transitional payment rates applicable in CYs 2008 through 2010 for ASC facility services.
(d)
(e)
(2) For CY 2009 and subsequent calendar years, CMS adjusts the ASC relative payment weights under § 416.167(b)(2) as needed so that any updates and adjustments made under § 419.50(a) of this subchapter are budget neutral as estimated by CMS.
(a)
(b)
(1) The actual charge for the service; or
(2) The geographically adjusted payment rate determined under this subpart.
(c)
(2)
(d)
(e)
(i) 100 percent of the applicable ASC payment amount for the procedure with the highest national unadjusted ASC payment rate; and
(ii) 50 percent of the applicable ASC payment amount for all other covered surgical procedures.
(2)
(f)
(1) The full program and beneficiary coinsurance amounts if the procedure for which anesthesia is planned is discontinued after the induction of anesthesia or after the procedure is started;
(2) One-half of the full program and beneficiary coinsurance amounts if the procedure for which anesthesia is planned is discontinued after the patient is prepared for surgery and taken to the room where the procedure is to be performed but before the anesthesia is induced; or
(3) One-half of the full program and beneficiary coinsurance amounts if a covered surgical procedure or covered ancillary service for which anesthesia is not planned is discontinued after the patient is prepared and taken to the room where the service is to be provided.
(g)
CMS publishes annually, through notice and comment rulemaking in the
There is no administrative or judicial review under section 1869 of the Act, section 1878 of the Act, or otherwise of the following:
(a) The classification system;
(b) Relative weights;
(c) Payment amounts; and
(d) Geographic adjustment factors.
(a)
(1) The device is replaced without cost to the ASC or the beneficiary;
(2) The ASC receives full credit for the cost of a replaced device; or
(3) The ASC receives partial credit for the cost of a replaced device but only where the amount of the device credit is greater than or equal to 50 percent of the cost of the new replacement device being implanted.
(b)
(2) The amount of the reduction to the ASC payment made under paragraph (a)(3) of this section is 50 percent of the payment reduction that would be calculated under paragraph (b)(1) of this section.
(c)
(a)
(b)
(1) The process for interested parties to request that CMS review the appropriateness of the ASC facility fee for insertion of an IOL. This process includes a review of whether that payment is reasonable and related to the cost of acquiring a lens determined by CMS as belonging to a class of new technology IOLs;
(2) Factors that CMS considers for determination of a new class of new technology IOLs; and
(3) Application of the payment adjustment.
(a)
(b)
(c)
(a)
(b)
(c)
(d)
(a)
(1) The IOL is approved by the FDA.
(2) Claims of specific clinical benefits and/or lens characteristics with established clinical relevance in comparison
(3) The IOL is not described by an active or expired class of new technology IOLs; that is, it does not share a predominant, class-defining characteristic associated with improved clinical outcomes with members of an active or expired class.
(4) Evidence demonstrates that use of the IOL results in measurable, clinically meaningful, improved outcomes in comparison with use of currently available IOLs. Superior outcomes include:
(i) Reduced risk of intraoperative or postoperative complication or trauma;
(ii) Accelerated postoperative recovery;
(iii) Reduced induced astigmatism;
(iv) Improved postoperative visual acuity;
(v) More stable postoperative vision;
(vi) Other comparable clinical advantages.
(b)
(1) The IOL is eligible for a payment adjustment as a member of a new class of new technology IOLs.
(2) The IOL is a member of an active class of new technology IOLs and is eligible for a payment adjustment for the remainder of the period established for that class.
(3) The IOL does not meet the criteria for designation as a new technology IOL and a payment adjustment is not appropriate.
(a) CMS establishes the amount of the payment adjustment for classes of new technology IOLs through proposed and final rulemaking in connection with ASC facility services.
(b) CMS adjusts the payment for insertion of an IOL approved as belonging to a class of new technology IOLs for the 5-year period of time established for that class.
(c) Upon expiration of the 5-year period of the payment adjustment, payment reverts to the standard rate for IOL insertion procedures performed in ASCs.
(d) ASCs that furnish an IOL designated by CMS as belonging to a class of new technology IOLs must submit claims using billing codes specified by CMS to receive the new technology IOL payment adjustment.
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh), secs. 1301, 1306, and 1310 of the Public Health Service Act (42 U.S.C. 300e, 300e-5, and 300e-9), and 31 U.S.C. 9701.
As used in this part, unless the context indicates otherwise—
(1) Physician services (§ 417.101(a)(1));
(2) Outpatient services and inpatient hospital services (§ 417.101(a)(2));
(3) Medically necessary emergency health services (§ 417.101(a)(3)); and
(4) Diagnostic laboratory and diagnostic and therapeutic radiologic services (§ 417.101(a)(6)).
(1) That these health professionals will provide their professional services in accordance with a compensation arrangement established by the entity; and
(2) To the extent feasible, for the sharing by these health professionals of health (including medical) and other records, equipment, and professional, technical, and administrative staff.
(1) That is composed of health professionals licensed to practice medicine or osteopathy and of such other licensed health professionals (including dentists, optometrists, and podiatrists) as are necessary for the provision of health services for which the group is responsible;
(2) A majority of the members of which are licensed to practice medicine or osteopathy; and
(3) The members of which:
(i) After the end of the 48 month period beginning after the month in which the HMO for which the group provides health services becomes a qualified HMO, as their principal professional activity (over 50 percent individually) engage in the coordinated practice of their profession and as a group responsibility have substantial responsibility (over 35 percent in the aggregate of their professional activity) for the delivery of health services to enrollees of an HMO;
(ii) Pool their income from practice as members of the group and distribute it among themselves according to a prearranged salary or drawing account or other similar plan unrelated to the provision of specific health services;
(iii) Share health (including medical) records and substantial portions of major equipment and of professional, technical, and administrative staff;
(iv) Establish an arrangement whereby an enrollee's enrollment status is not known to the health professional
(2) Any entity in which a person described in paragraph (1):
(i) Is an officer or director;
(ii) Is a partner (if the entity is organized as a partnership);
(iii) Has directly or indirectly a beneficial interest of more than 5 percent of the equity; or
(iv) Has a mortgage, deed of trust, note, or other interest valuing more than 5 percent of the assets of such entity;
(3) Any spouse, child, or parent of an individual described in paragraph (1).
(1) Provide services to HMO enrollees at an HMO facility subject to the staff policies and operational procedures of the HMO;
(2) Engage in the coordinated practice of their profession and provide to enrollees of the HMO the health services that the HMO has contracted to provide;
(3) Share medical and other records, equipment, and professional, technical, and administrative staff of the HMO; and
(4) Provide their professional services in accordance with a compensation arrangement, other than fee-for-service, established by the HMO. This arrangement may include, but is not limited to, fee-for-time, retainer or salary.
(1) Those health services that are projected to involve fewer than 1 percent of the encounters per year for the entire HMO enrollment, or,
(2) Those health services the provision of which, given the enrollment projection of the HMO and generally accepted staffing patterns, is projected will require less than 0.25 full time equivalent health professionals.
(a) Subparts B through F of this part pertain to the Federal qualification of HMOs under title XIII of the Public Health Service (PHS) Act.
(b) Subparts G through R of this part set forth the rules for Medicare contracts with, and payment to, HMOs and competitive medical plans (CMPs) under section 1876 of the Act.
(c) Subpart U of this part pertains to Medicare payment to health care prepayment plans under section 1833(a)(1)(A) of the Act.
(d) Subpart V of this part applies to the administration of outstanding loans and loan guarantees previously granted under title XIII of the PHS Act.
(a) An HMO must provide or arrange for the provision of basic health services to its enrollees as needed and without limitations as to time and cost other than those prescribed in the PHS Act and these regulations, as follows:
(1) Physician services (including consultant and referral services by a physician), which must be provided by a licensed physician, or if a service of a physician may also be provided under applicable State law by other health professionals, an HMO may provide the service through these other health professionals;
(2)(i) Outpatient services, which must include diagnostic services, treatment services and x-ray services, for patients who are ambulatory and may be provided in a non-hospital based health care facility or at a hospital;
(ii) Inpatient hospital services, which must include but not be limited to, room and board, general nursing care, meals and special diets when medically necessary, use of operating room and related facilities, use of intensive care unit and services, x-ray services, laboratory, and other diagnostic tests, drugs, medications, biologicals, anesthesia and oxygen services, special duty nursing when medically necessary, radiation therapy, inhalation therapy, and administration of whole blood and blood plasma;
(iii) Outpatient services and inpatient hospital services must include short-term rehabilitation services and physical therapy, the provision of which the HMO determines can be expected to result in the significant improvement of a member's condition within a period of two months;
(3) Instructions to its enrollees on procedures to be followed to secure medically necessary emergency health services both in the service area and out of the service area;
(4) Twenty outpatient visits per enrollee per year, as may be necessary and appropriate for short-term evaluative or crisis intervention mental health services, or both;
(5) Diagnosis, medical treatment and referral services (including referral services to appropriate ancillary services) for the abuse of or addiction to alcohol and drugs:
(i) Diagnosis and medical treatment for the abuse of or addiction to alcohol and drugs must include detoxification for alcoholism or drug abuse on either an outpatient or inpatient basis,
(ii) Referral services may be either for medical or for nonmedical ancillary services. Medical services must be a part of basic health services; nonmedical ancillary services (such as vocational rehabilitation and employment counseling) and prolonged rehabilitation services in a specialized inpatient or residential facility need not be a part of basic health services;
(6) Diagnostic laboratory and diagnostic and therapeutic radiologic services in support of basic health services;
(7) Home health services provided at an enrollee's home by health care personnel, as prescribed or directed by the responsible physician or other authority designated by the HMO; and
(8) Preventive health services, which must be made available to members and must include at least the following:
(i) A broad range of voluntary family planning services;
(ii) Services for infertility;
(iii) Well-child care from birth;
(iv) Periodic health evaluations for adults;
(v) Eye and ear examinations for children through age 17, to determine the need for vision and hearing correction; and
(vi) Pediatric and adult immunizations, in accord with accepted medical practice.
(b) In addition, an HMO may include a health service described in § 417.102 as a supplemental health service in the basic health services that it provides or arranges for its enrollees for a basic health services payment.
(c) To the extent that a natural disaster, war, riot, civil insurrection, epidemic or any other emergency or similar event not within the control of an HMO results in the facilities, personnel, or financial resources of an HMO being unavailable to provide or arrange for the provision of a basic or supplemental health service in accordance with the requirements of §§ 417.101 through 417.106 and §§ 417.168 and 417.169, the HMO is required only to make a good-faith effort to provide or arrange for the provision of the service, taking into account the impact of the event. For purposes of this paragraph, an event is not within the control of an HMO if the HMO cannot exercise influence or dominion over its occurrence.
(d) The following are not required to be provided as basic health services:
(1) Corrective appliances and artificial aids;
(2) Mental health services, except as required under section 1302(1)(D) of the PHS Act and paragraph (a)(4) of this section;
(3) Cosmetic surgery, unless medically necessary;
(4) Prescribed drugs and medicines incidental to outpatient care;
(5) Ambulance services, unless medically necessary;
(6) Care for military service connected disabilities for which the enrollee is legally entitled to services and for which facilities are reasonably available to this enrollee;
(7) Care for conditions that State or local law requires be treated in a public facility;
(8) Dental services;
(9) Vision and hearing care except as required by sections 1302(1)(A) and 1302(1)(H)(vi) of the PHS Act and paragraphs (a)(1) and (a)(8) of this section;
(10) Custodial or domiciliary care;
(11) Experimental medical, surgical, or other experimental health care procedures, unless approved as a basic health service by the policymaking body of the HMO;
(12) Personal or comfort items and private rooms, unless medically necessary during inpatient hospitalization;
(13) Whole blood and blood plasma;
(14) Long-term physical therapy and rehabilitation;
(15) Durable medical equipment for home use (such as wheel chairs, surgical beds, respirators, dialysis machines); and
(16) Health services that are unusual and infrequently provided and not necessary for the protection of individual health, as approved by CMS upon application by the HMO.
(e) An HMO may not offer to provide or arrange for the provision of basic health services on a prepayment basis that do not include all the basic health services set forth in paragraph (a) of
(a) An HMO may provide to its enrollees any health service that is not included as a basic health service under § 417.101(a). These health services may be limited as to time and cost.
(b) An HMO must determine the level and scope of supplemental health services included with basic health services provided to its enrollees for a basic health services payment or those services offered to its enrollees as supplemental health services.
(a)(1) The HMO must provide that the services of health professionals that are provided as basic health services will, except as provided in paragraph (c) of this section, be provided or arranged for through (i) health professionals who are staff of the HMO, (ii) a medical group or groups, (iii) an IPA or IPAs, (iv) physicians or other health professionals under direct service contracts with the HMO for the provision of these services, or (v) any combination of staff, medical group or groups, IPA or IPAs, or physicians or other health professionals under direct service contracts with the HMO.
(2) A staff or medical group model HMO may have as providers of basic health services physicians who have also entered into written services arrangements with an IPA or IPAs, but only if either (i) these physicians number less than 50 percent of the physicians who have entered into arrangements with the IPA or IPAs, or (ii) if the sharing is 50 percent or greater, CMS approves the sharing as being consistent with the purposes of section 1310(b) of the PHS Act.
(3) After the 4 year period beginning with the month following the month in that an HMO becomes a qualified HMO, an entity that meets the requirements of the definition of medical group in § 417.100, except for subdivision (3)(i) of that definition, may be considered a medical group if CMS determines that the principal professional activity (over 50 percent individually) of the entity's members is the coordinated practice of their profession, and if the HMO has demonstrated to the satisfaction of CMS that the entity is committed to the delivery of medical services on a prepaid group practice basis by either:
(i) Presenting a reasonable time-phased plan for the entity to achieve compliance with the “substantial responsibility” requirement of subdivision (3)(i) of the definition of “medical group” in § 417.100. The HMO must update the plan annually and must demonstrate to the satisfaction of CMS that the entity is making continuous efforts and progress towards compliance with the requirements of the definition of “medical group,” or
(ii) Demonstrating that compliance by the entity with the “substantial responsibility” requirement is unreasonable or impractical because (A) the HMO serves a non-metropolitan or rural area as defined in § 417.100, or (B) the entity is a multi-speciality group that provides medical consultation upon referral on a regional or national basis, or (C) the majority of the residents of the HMO's service area are not eligible for employer-employee health benefits plans and the HMO has an insufficient number of enrollees to require utilization of at least 35 percent of the entity's services.
(b) HMOs must have effective procedures to monitor utilization and to control cost of basic and supplemental health services and to achieve utilization goals, which may include mechanisms such as risk sharing, financial incentives, or other provisions agreed to by providers.
(c) Paragraph (a) of this section does not apply to the provision of the services of a physician:
(1) Which the HMO determines are unusual or infrequently used services; or
(2) Which, because of an emergency, it was medically necessary to provide
(3) Which are provided as part of the inpatient hospital services by employees or staff of a hospital or provided by staff of other entities such as community mental health centers, home health agencies, visiting nurses' associations, independent laboratories, or family planning agencies.
(d) Supplemental health services must be provided or arranged for by the HMO and need not be provided by providers of basic health services under contract with the HMO.
(e) Each HMO must:
(1) Pay the provider, or reimburse its enrollees for the payment of reasonable charges for basic health services (or supplemental health services that the HMO agreed to provide on a prepayment basis) for which its enrollees have contracted, which were medically necessary and immediately required to be obtained other than through the HMO because of an unforeseen illness, injury, or condition, as determined by the HMO;
(2) Adopt procedures to review promptly all claims from enrollees for reimbursement for the provision of health services described in paragraph (e)(1) of this section, including a procedure for the determination of the medical necessity for obtaining the services other than through the HMO; and
(3) Provide instructions to its enrollees on procedures to be followed to secure these health services.
(a)
(1) Is to be paid on a periodic basis without regard to the dates these services are provided;
(2) Is fixed without regard to the frequency, extent, or kind of basic health services actually furnished;
(3) Except as provided in paragraph (c) of this section, is fixed under a community rating system, as described in paragraph (b) of this section; and
(4) May be supplemented by nominal copayments which may be required for the provision of specific basic health services. Each HMO may establish one or more copayment options calculated on the basis of a community rating system.
(i) An HMO may not impose copayment charges that exceed 50 percent of the total cost of providing any single service to its enrollees, nor in the aggregate more than 20 percent of the total cost of providing all basic health services.
(ii) To insure that copayments are not a barrier to the utilization of health services or enrollment in the HMO, an HMO may not impose copayment charges on any subscriber (or enrollees covered by the subscriber's contract with the HMO) in any calendar year, when the copayments made by the subscriber (or enrollees) in that calendar year total 200 percent of the total annual premium cost which that subscriber (or enrollees) would be required to pay if he (or they) were enrolled under an option with no copayments. This limitation applies only if the subscriber (or enrollees) demonstrates that copayments in that amount have been paid in that year.
(b)
(1) A system of fixing rates of payment for health services may provide that the rates will be fixed on a per person or per family basis and may vary with the number of persons in a family. Except as otherwise authorized
(2) A system of fixing rates of payment for health services may provide that the rates will be fixed for individuals and families by groups. Except as otherwise authorized in this paragraph, such rates must be equivalent for all individuals in the same group and for all families of similar composition in the same group. If an HMO is to fix rates of payment for individuals and families by groups, it must:
(i) Classify all of the enrollees of the organization into classes based on factors that the HMO determines predict the differences in the use of health services by the individuals or families in each class and which have not been disapproved by CMS,
(ii) Determine its revenue requirements for providing services to the enrollees of each class established under paragraph (b)(2)(i) of this section, and
(iii) Fix the rates of payment for the individuals and families of a group on the basis of a composite of the organization's revenue requirements determined under paragraph (b)(2)(ii) of this section for providing services to them as members of the classes established under paragraph (b)(2)(i) of this section. CMS will review the factors used by each HMO to establish classes under paragraph (b)(2)(i) of this section. If CMS determines that any such factor may not reasonably be used to predict the use of the health services by individuals and families, CMS will disapprove the factor for that purpose.
(3)(i) Nominal differentials in rates may be established to reflect differences in marketing costs and the different administrative costs of collecting payments from the following categories of potential subscribers:
(A) Individual (non-group) subscribers (including their families).
(B) Small groups of subscribers (100 subscribers or fewer).
(C) Large groups of subscribers (over 100 subscribers).
(ii) Differentials in rates may be established for subscribers enrolled in an HMO: (A) Under a contract with a governmental authority under section 1079 (“Contracts for Medical Care for Spouses and Children: Plans”) or section 1086 (“Contracts for Health Benefits for Certain Members, Former Members and their Dependents”) of title 10 (“Armed Forces”), United States Code; or (B) under any other governmental program (other than the health benefits program authorized by chapter 89 (“Health Insurance”) of title 5 (“Government Organization and Employees”), United States Code; or (C) under any health benefits program for employees of States, political subdivisions of states, and other public entities.
(4) An HMO may establish a separate community rate for separate regional components of the organization upon satisfactory demonstration to CMS of the following:
(i) Each regional component is geographically distinct and separate from any other regional component; and
(ii) Each regional component provides substantially the full range of basic health services to its enrollees, without extensive referral between components of the organization for these services, and without substantial utilization by any two components of
(c)
(2) The requirement of community rating does not apply to the basic health services payment for basic health services provided an enrollee who is a full-time student at an accredited institution of higher education.
(d)
(e)
(1) An HMO must make a written request to CMS, listing the factors to be used in the community rating by class system under paragraph (b)(2) of this section.
(2) CMS will notify each HMO within 30 days of receipt of the request and application of one of the following:
(i) The application is approved;
(ii) Additional information or data are required and CMS will notify the HMO of its decision within 30 days from the date of receipt of this information or data; or
(iii) CMS needs additional time to review the written request and the HMO will be notified of CMS's decision within 90 days.
(a) An HMO may require supplemental health services payments, in addition to the basic health services payments, for the provision of each health service included in the supplemental health services set forth in § 417.102 for which subscribers have contracted, or it may include supplemental health services in the basic health services provided its enrollees for a basic health services payment.
(b) Supplemental health services payments may be made in any agreed upon manner, such as prepayment or fee-for-service. Supplemental health services payments that are fixed on a prepayment basis, however, must be fixed under a community rating system, unless the supplemental health services payment is for a supplemental health service provided an enrollee who is a full-time student at an accredited institution of higher education. In the case of an HMO that provided comprehensive health services on a prepaid basis before it became a qualifed HMO, the community rating requirement shall not apply to that HMO during the forty-eight month period beginning with the month following the month in which it became a qualifed HMO.
(a)
(1) Stresses health outcomes to the extent consistent with the state of the art.
(2) Provides review by physicians and other health professionals of the process followed in the provision of health services.
(3) Uses systematic data collection of performance and patient results, provides interpretation of these data to its practitioners, and institutes needed change.
(4) Includes written procedures for taking appropriate remedial action whenever, as determined under the quality assurance program, inappropriate or substandard services have been provided or services that ought to have been furnished have not been provided.
(b)
(1) Except as provided in paragraph (b)(2) of this section, the services must be available to each enrollee within the HMO's service area.
(2)
(3) The services must be available and accessible with reasonable promptness to each of the HMO's enrollees as ensured through—
(i) Staffing patterns within generally accepted norms for meeting the projected enrollment needs; and
(ii) Geographic location, hours of operation, and arrangements for after-hours services. (Medically necessary emergency services must be available 24 hours a day, 7 days a week.)
(c)
(1) Use of a health professional who is primarily responsible for coordinating the enrollee's overall health care.
(2) A system of health and medical records that accumulates pertinent information about the enrollee's health care and makes it available to appropriate professionals.
(3) Arrangements made directly or through the HMO's providers to ensure that the HMO or the health professional who coordinates the enrollee's overall health care is kept informed about the services that the referral resources furnish to the enrollee.
(d)
(a)
(i) Total assets greater than total unsubordinated liabilities. In evaluating assets and liabilities, loan funds awarded or guaranteed under section
(ii) Sufficient cash flow and adequate liquidity to meet obligations as they become due.
(iii) A net operating surplus, or a financial plan that meets the requirements of paragraph (a)(2) of this section.
(iv) An insolvency protection plan that meets the requirements of § 417.122(b) for protection of enrollees.
(v) A fidelity bond or bonds, procured and maintained by the HMO, in an amount fixed by its policymaking body but not less than $100,000 per individual, covering each officer and employee entrusted with the handling of its funds. The bond may have reasonable deductibles, based upon the financial strength of the HMO.
(vi) Insurance policies or other arrangements, secured and maintained by the HMO and approved by CMS to insure the HMO against losses arising from professional liability claims, fire, theft, fraud, embezzlement, and other casualty risks.
(2)
(ii) This plan must include—
(A) A detailed marketing plan;
(B) Statements of revenue and expense on an accrual basis;
(C) Sources and uses of funds statements; and
(D) Balance sheets.
(b)
(1) For the cost of providing to any enrollee basic health services with an aggregate value of more than $5,000 in any year.
(2) For the cost of basic health services obtained by its enrollees from sources other than the HMO because medical necessity required that they be furnished before they could be secured through the HMO.
(3) For not more than 90 percent of the amount by which its costs for any of its fiscal years exceed 115 percent of its income for that fiscal year.
(4) For physicians or other health professionals, health care institutions, or any other combination of such individuals or institutions to assume all or part of the financial risk on a prospective basis for their furnishing of basic health services to the HMO's enrollees.
(a)
(i) Contractual arrangements that prohibit health care providers used by the enrollees from holding any enrollee liable for payment of any fees that are the legal obligation of the HMO.
(ii) Insurance, acceptable to CMS.
(iii) Financial reserves, acceptable to CMS, that are held for the HMO and restricted for use only in the event of insolvency.
(iv) Any other arrangements acceptable to CMS.
(2) The requirements of this paragraph do not apply to an HMO if CMS determines that State law protects the HMO enrollees from liability for payment of any fees that are the legal obligation of the HMO.
(b)
(1) For all enrollees, for the duration of the contract period for which payment has been made.
(2) For enrollees who are in an inpatient facility on the date of insolvency, until they are discharged from the facility.
(a)
(1) A policymaking body that exercises oversight and control over the HMO's policies and personnel to ensure that management actions are in the best interest of the HMO and its enrollees.
(2) Personnel and systems sufficient for the HMO to organize, plan, control and evaluate the financial, marketing, health services, quality assurance program, administrative and management aspects of the HMO.
(3) At a minimum, management by an executive whose appointment and removal are under the control of the HMO's policymaking body.
(b)
(i) Benefits (including limitations and exclusions).
(ii) Coverage (including a statement of conditions on eligibility for benefits).
(iii) Procedures to be followed in obtaining benefits and a description of circumstances under which benefits may be denied.
(iv) Rates.
(v) Grievance procedures.
(vi) Service area.
(vii) Participating providers.
(viii) Financial condition including at least the following most recently audited information: Current assets, other assets, total assets; current liabilities, long term liabilities; and net worth.
(2)
(ii) The description of benefits and coverage may be in general terms if reference is made to a detailed statement of benefits and coverage that is available without cost to any person who enrolls in the HMO or to whom the opportunity for enrollment is offered.
(iii) The HMO must provide the description to any enrollee or person who is eligible to elect the HMO option and who requests the material from the HMO or the administrator of a health benefits plan. For purposes of this requirement, “administrator” (of a health benefits plan) has the meaning it is given in the Employment Retirement Income Security Act of 1974 (ERISA) at 29 U.S.C. 1002(16)(A).
(iv) If the HMO provides health services through individual practice associations (IPAs), the HMO must specify the number of member physicians by specialty, and a listing of the hospitals where HMO enrollees will receive basic and supplemental health services.
(v) If the HMO provides health services other than through IPAs, the HMO must specify, for each ambulatory care facility, the facility's address, days and hours of operation, and the number of physicians by specialty, and a listing of the hospitals where HMO enrollees will receive basic and supplemental health services.
(c)
(2) If an HMO has a medically underserved population located in its service area, not more than 75 percent of its enrollees may be from the medically underserved population unless the area in which that population resides is a rural area.
(d)
(i) Expel or refuse to reenroll any enrollee; or
(ii) Refuse to enroll individual members of a group.
(2) For purposes of this paragraph, a “group” is composed of individuals who enroll in the HMO under a contract or other arrangement that covers two or more subscribers. Examples of groups are employees who enroll under a contract between their employer and the HMO, or members of an organization that arranges coverage for its membership.
(3) Nothing in this subpart prohibits an HMO from requiring that, as a condition for continued eligibility for enrollment, enrolled dependent children, upon reaching a specified age, convert to individual enrollment, consistent with paragraph (e) of this section.
(e)
(i) Each enrollee (and his or her enrolled dependents) leaving a group.
(ii) Each enrollee who would otherwise cease to be eligible for HMO enrollment because of his or her age, or the death or divorce of an enrollee.
(2) The individual enrollment offered must meet the conditions of subpart B of this part and this subpart C.
(3) The HMO is not required to offer individual enrollment except to the enrollees specified in this paragraph.
(4) The HMO must offer the enrollment on the same terms and conditions that it makes available to other nongroup enrollees.
(f) [Reserved]
(g)
(1) Grievances and complaints are transmitted in a timely manner to appropriate HMO decisionmaking levels that have authority to take corrective action; and
(2) Appropriate action is taken promptly, including a full investigation if necessary and notification of concerned parties as to the results of the HMO's investigation.
(h)
(1) In the case of hospitals, are either accredited by the Joint Commission on Accreditation of Health Care Organizations, or certified by Medicare.
(2) In the case of laboratories, are either CLIA-exempt, or have in effect a valid certificate of one of the following types, issued by CMS in accordance with section 353 of the PHS Act and part 493 of this chapter:
(i) Registration certificate.
(ii) Certificate.
(iii) Certificate of waiver.
(iv) Certificate of accreditation.
(3) In the case of other affiliated institutional providers, are certified for participation in Medicare and Medicaid in accordance with part 405, 416, 418, 488, or 491 of this chapter, as appropriate.
(a)
(1) The cost of its operations.
(2) The patterns of utilization of its services.
(3) The availability, accessibility, and acceptability of its services.
(4) To the extent practical, developments in the health status of its enrollees.
(5) Information demonstrating that the HMO has a fiscally sound operation.
(6) Other matters that CMS may require.
(b)
(1) A description of significant business transactions (as defined in paragraph (c) of this section) between the HMO and a party in interest.
(2) With respect to those transactions—
(i) A showing that the costs of the transactions listed in paragraph (c) of this section do not exceed the costs that would be incurred if these transactions were with someone who is not a party in interest; or
(ii) If they do exceed, a justification that the higher costs are consistent with prudent management and fiscal soundness requirements.
(3) A combined financial statement for the HMO and a party in interest if either of the following conditions is met:
(i) Thirty-five percent or more of the costs of operation of the HMO go to a party in interest.
(ii) Thirty-five percent or more of the revenue of a party in interest is from the HMO.
(c)
(1) Business transaction means any of the following kinds of transactions:
(i) Sale, exchange or lease of property.
(ii) Loan of money or extension of credit.
(iii) Goods, services, or facilities furnished for a monetary consideration, including management services, but not including—
(A) Salaries paid to employees for services performed in the normal course of their employment; or
(B) Health services furnished to the HMO's enrollees by hospitals and other providers, and by HMO staff, medical groups, or IPAs, or by any combination of those entities.
(2)
(d)
(2) Inter-entity transactions must be eliminated in the consolidated column.
(3) These statements must have been examined by an independent auditor in accordance with generally accepted accounting principles, and must include appropriate opinions and notes.
(4) Upon written request from an HMO showing good cause, CMS may waive the requirement that its combined financial statement include the financial information required in this paragraph (d) with respect to a particular entity.
(e)
(i) The HMO must furnish the information to the employer or the employer's designee, or to the plan administrator, as the term “administrator” is defined in ERISA.
(ii) Loan of money or extension of credit.
(iii) Goods, services, or facilities furnished for a monetary consideration, including management services, but not including—
(A) Salaries paid to employees for services performed in the normal course of their employment; or
(B) Health services furnished to the HMO's enrollees by hospitals and other providers, and by HMO staff, medical groups, or IPAs, or by any combination of those entities.
(2)
(d)
(2) Inter-entity transactions must be eliminated in the consolidated column.
(3) These statements must have been examined by an independent auditor in accordance with generally accepted accounting principles, and must include appropriate opinions and notes.
(4) Upon written request from an HMO showing good cause, CMS may waive the requirement that its combined financial statement include the financial information required in this paragraph (d) with respect to a particular entity.
(e)
(2) The HMO must furnish the information to the employer or the employer's designee, or to the plan administrator, as the term “administrator” is defined in ERISA.
This subpart sets forth—
(a) The requirements for—
(1) Entities that seek qualification as HMOs under title XIII of the PHS Act; and
(2) HMOs that seek—
(i) Qualification for their regional components; or
(ii) Expansion of their service areas;
(b) The procedures that CMS follows to make determinations; and
(c) Other related provisions, including application fees.
(a)
(2) CMS determines whether the entity is an HMO on the basis of the entity's application and any additional information and investigation (including site visits) that CMS may require.
(3) CMS may determine that an entity is any of the following:
(i) An operational qualified HMO.
(ii) A preoperational qualified HMO.
(iii) A transitional qualified HMO.
(b)
(1) CMS finds that the entity meets the requirements of subparts B and C of this part.
(2) The entity, within 30 days of CMS's determination, provides written assurances, satisfactory to CMS, that it—
(i) Provides and will provide basic health services (and any supplemental health services included in any contract) to its enrollees;
(ii) Provides and will provide these services in the manner prescribed in sections 1301(b) and 1301(c) of the PHS Act and subpart B of this part;
(iii) Is organized and operated and will continue to be organized and operated in the manner prescribed in section 1301(c) of the PHS Act and subpart C of this part;
(iv) Under arrangements that safeguard the confidentiality of patient information and records, will provide access to CMS and the Comptroller General or any of their duly authorized representatives for the purpose of audit, examination or evaluation to any books, documents, papers, and records of the entity relating to its operation as an HMO, and to any facilities that it operates; and
(v) Will continue to comply with any other assurances that it has given to CMS.
(c)
(2) Within 30 days after receiving notice that the entity has begun operation, CMS determines whether it is an operational qualified HMO. In the absence of this determination, the entity is not an operational qualified HMO even though it becomes operational.
(d)
(i) Meets the requirements of paragraph (d)(2) through (d)(4) of this section; and
(ii) Provides the assurances specified in paragraphs (d)(5) through (d)(7) of this section within 30 days of CMS's determination.
(2)
(i) Assume full financial risk for the provision of basic health services as required by § 417.120(b); or
(ii) Comply with the limitations that are imposed on insurance by § 417.120(b)(1).
(3)
(i) Physician services.
(ii) Outpatient services and inpatient hospital services. (The entity need not provide or pay for hospital inpatient or outpatient services that it can show are being provided directly, through insurance, or under arrangements, by other entities.)
(iii) Medically necessary emergency services.
(iv) Diagnostic laboratory services and diagnostic and therapeutic radiologic services.
(4)
(ii)
(5)
(i) Continue to provide services in accordance with paragraph (d)(3) of this section.
(ii) Continue to be organized and operated and to pay for basic health services in accordance with paragraphs (d)(2) and (d)(4) of this section, respectively.
(6)
(i) It will implement a time-phased plan acceptable to CMS that—
(A) May not extend for more than 3 years from the date of CMS's determination; and
(B) Specifies definite steps for meeting, at the time of renewal of each group or individual contract, all the requirements of subparts B and C of this part.
(ii) Upon completion of this time-phased plan, it will—
(A) Provide basic and supplemental services to all of its enrollees; and
(B) Be organized and operated, and provide services, in accordance with subparts B and C of this part.
(7)
(i) Be organized and operated in accordance with subpart C of this part; and
(ii) Provide basic health services and any supplemental health services included in the contract, in accordance with subpart B of this part.
(e)
(f)
(g)
(1) The requirements of titles XVIII and XIX of the Act, as appropriate, take precedence over conflicting requirements of sections 1301(b) and 1301(c) of the PHS Act.
(2) The HMO must, with respect to its enrollees entitled to Medicare or Medicaid, comply with the applicable requirement of title XVIII or XIX, including those that pertain to—
(i) Deductibles and coinsurance;
(ii) Enrollment mix and enrollment practices;
(iii) State plan rules on copayment options; and
(iv) Grievance procedures.
(3) An HMO that complies with paragraph (g)(2) of this section may obtain and retain Federal qualification if, for its other enrollees, the HMO meets the requirements of sections 1301(b) and 1301(c) of the PHS Act and implementing regulations in this subpart D and in subparts B and C of this part.
(h)
(a)
(b)
(2) The authorized individual must describe thoroughly how the entity meets, or will meet, the requirements for qualified HMOs described in the PHS Act and in subparts B and C of this part, this subpart D, and 417.168 and 417.169 of subpart F.
(c)
(1) The fee is reasonably related to the Federal government's cost of qualifying an entity and may vary based on the type of application.
(2) Each type of application has one set fee rather than a charge based on the specific cost of each determination. (For example, each Federally qualified HMO applicant seeking Federal qualification of one of its regional components as an HMO is charged the same amount, unless the amount of the fee has been changed under paragraph (f) of this section.)
(d)
(1) $18,400 for an entity seeking qualification as an HMO or qualification of a regional component of an HMO.
(2) $6,900 for an HMO seeking expansion of its service area.
(3) $3,100 for a CMP seeking qualification as an HMO.
(e)
(f)
(g)
(h)
(a)
(2) If the application is incomplete, CMS notifies the entity and allows 60 days from the date of the notice for the entity to furnish the missing information.
(3) After evaluating all relevant information, CMS determines whether the entity meets the applicable requirements of §§ 417.142 and 417.143.
(b)
(c)
(2) Within 60 days from the date of the notice, the entity may respond in writing to the issues or other matters that were the basis for CMS's preliminary finding, and may revise its application to remedy any defects identified by CMS.
(d)
(2) A request for reconsideration must—
(i) Be submitted in writing, within 60 days following the date of the notice of denial;
(ii) Be addressed to the CMS officer or employee who denied the application; and
(iii) Set forth the grounds upon which the entity requests reconsideration, specifying the material issues of fact and of law upon which the entity relies.
(3) CMS bases its reconsideration upon the record compiled during the qualification review proceedings, materials submitted in support of the request for reconsideration, and other relevant materials available to CMS.
(4) CMS gives the entity written notice of the reconsidered determination and the basis for the determination.
(e)
(2)
As used in this subpart, unless the context indicates otherwise—
(1) Includes non-appropriated fund instrumentalities of the United States Government; and
(2) Excludes the following:
(i) The governments of the United States, the District of Columbia and the territories and possessions of the United States, the 50 States and their political subdivisions, and any agencies or instrumentalities of any of the foregoing, including the United States Postal Service and Postal Rate Commission.
(ii) Any church, or convention or association of churches, and any organization operated, supervised, or controlled by a church, or convention or association of churches that meets the following conditions:
(A) Is an organization that is described in section 501(c)(3) of the Internal Revenue Code of 1954.
(B) Does not discriminate, in the employment, compensation, promotion or termination of employment of any personnel, or in the granting of staff and other privileges to physicians or other health personnel, on the grounds that the individuals obtain health care through HMOs, or participate in furnishing health care through HMOs.
(a)
(b)
(c)
(d)
(e)
(a)
(b)
(c)
(i) Must first be presented to the bargaining representative; and
(ii) If the representative accepts the option, must then be offered to each represented employee.
(2) For employees not represented by a bargaining representative, the option must be offered directly to those employees.
(a)
(ii)
(2)
(ii) Access may not be more restrictive or less favorable than the access the employing entity provides to other
(b)
(2) Revisions must be limited to correcting factual errors and misleading or ambiguous statements, unless—
(i) The HMO and the employing entity agree otherwise; or
(ii) Other revisions are required by law.
(3) The employing entity or designee must complete revision of the materials promptly so as not to delay or otherwise interfere with their use during the group enrollment period.
(c)
(2)
(3)
(d)
(2)
(i) Is not integrated or incorporated into a basic health benefits package or major medical plan, and
(ii) Is—
(A) Offered by a carrier other than the one offering the basic health benefits package or major medical plan; or
(B) Subject to a premium separate from the premium for the basic health benefits package or major medical plan.
(3)
(ii) The non-HMO option provides free-standing coverage for optical services (such as refraction and the provision of eyeglasses), and the HMO does not. The employing entity must provide that employees who select the HMO option continue to be eligible for optical coverage.
(iii) The non-HMO option includes dental coverage in its major medical package, with a common deductible applied to dental as well as non-dental benefits. The HMO provides no dental coverage as part of its pre-paid health services. Because the dental coverage is not free-standing, the employing entity is not required to provide that employees who select the HMO option
(e)
(i) Are new employees.
(ii) Have been transferred or have changed their place of residence, resulting in—
(A) Eligibility for enrollment in a qualified HMO for which they were not previously eligible by place of residence; or
(B) Residence outside the service area of a qualified HMO in which they were previously enrolled.
(iii) Are covered by any coverage option that ceases operation.
(2)
(3)
(i) Enrollment in a particular qualified HMO is offered for the first time.
(ii) The eligible employee elects to change from one option to another.
(iii) The eligible employee is one of those specified in paragraph (e)(1) of this section.
(f)
(1) For employees represented by a collective bargaining representative, the selection of copayment levels and supplemental health services is subject to the collective bargaining process.
(2) For employees not represented by a bargaining representative, the selection of copayment levels and supplemental health services is subject to the same decisionmaking process used by the employing entity with respect to the non-HMO option in its health benefits plan.
(3) In all cases, the HMO has the right to include, with the basic benefits package it provides to its enrollees for a basic health services payment, on a non-negotiable basis, those supplemental health services that meet the following conditions:
(i) Are required to be offered under State law.
(ii) Are included uniformly by the HMO in its prepaid benefit package.
(iii) Are available to employees who select the non-HMO option but not available to those who select the HMO option.
(a)
(2) If the HMO's request for inclusion in a health benefits plan is received at a time when existing contracts or agreements do not provide for inclusion, the employing entity must include the HMO option in the health benefits plan at the time that new agreements or contracts are offered or negotiated.
(b)
(1)
(i) When a new agreement is negotiated;
(ii) At the time prescribed, in an agreement with a fixed term of more than 1 year, for discussion of change in health benefits; or
(iii) In accordance with a specific process for review of HMO offers.
(2)
(i) If a contract has no fixed term or has a term in excess of 1 year, the contract must be treated as renewable on its earliest anniversary date.
(ii) If the employing entity or designee is self-insured, the budget year must be treated as the term of the existing contract.
(3)
(i) At the time each contract or arrangement is renewed or reissued; or
(ii) The benefits provided under the contract or arrangement are offered to employees.
(a)
(2)
(3)
(i) The employer contribution to the HMO is the same, per employee, as the contribution to non-HMO alternatives.
(ii) The employer contribution reflects the composition of the HMO's enrollment in terms of enrollee attributes that can reasonably be used to predict utilization, experience, costs, or risk. For each enrollee in a given class established on the basis of those attributes, the employer contributes an equal amount, regardless of the health benefits plan chosen by the employee.
(iii) The employer contribution is a fixed percentage of the premium for each of the alternatives offered.
(iv) The employer contribution is determined under a mutually acceptable arrangement negotiated by the HMO and the employer. In negotiating the arrangement, the employer may not insist on terms that would cause the HMO to violate any of the requirements of this part.
(4)
(b)
(2) However, if the employing entity or designee has special requirements for other than standard solicitation brochures and enrollment literature, it must, in the case of the HMO alternative, determine and distribute any administrative costs attributable to those requirements in a manner consistent with its method of determining
(c)
(1) For which eligible employees and their eligible dependents are covered notwithstanding selection of the HMO alternative; and
(2) That are not offered on a prepayment basis by the HMO to the employing entity's employees.
(d)
(e)
(f)
(1) The data used to compute the level of contribution for each of the plans offered to employees.
(2) Related data about the employees who are eligible to enroll in a plan.
(3) A description of the methodology for computation.
(g)
(2) The purpose of CMS's review is to determine whether the methodology and the level of contribution comply with the requirements of this subpart.
(3) HMOs and employees that request CMS to review must set forth reasonable grounds for making the request.
Each employing entity that provides payroll deductions as a means of paying employees' contributions for health benefits or provides a health benefits plan that does not require an employee contribution must, with the consent of an employee who selects the HMO option, arrange for the employee's contribution, if any, to be paid through payroll deductions.
The decision of an employing entity subject to this subpart to include the HMO alternative in any health benefits plan offered to its eligible employees must be carried out consistently with the obligations imposed on that employing entity under the National Labor Relations Act, the Railway Labor Act, and other laws of similar effect.
This subpart applies to any entity that has been determined to be a qualified HMO under subpart D of this part.
Any entity subject to this subpart must comply with the assurances that it provided to CMS, unless compliance is waived under § 417.166.
Entities subject to this subpart must submit:
(a) The reports that may be required by CMS under § 417.126, and
(b) Any additional reports CMS may reasonably require.
(a)
(1) State the grounds and underlying facts of the complaint;
(2) Give the names of all persons involved; and
(3) Assure that all appropriate grievance and appeals procedures established by the HMO and available to the complainant have been exhausted.
(b)
(2) When CMS initiates an investigation, it gives the HMO written notice that includes a full statement of the pertinent facts and of the matters being investigated and indicates that the HMO may submit, within 30 days of the date of the notice, a written report concerning these matters.
(3) CMS obtains any information it considers necessary to resolve issues related to the assurances, and may use site visits, public hearings, or any other procedures that CMS considers appropriate in seeking this information.
(c)
(ii) CMS publishes in the
(2)
(ii) The notice specifies the manner in which the HMO has not complied with its assurances and directs the HMO to initiate the corrective action that CMS considers necessary to bring the HMO into compliance.
(iii) The HMO must initiate this corrective action within 30 days of the date of the notice from CMS, or within any longer period that CMS determines to be reasonable and specifies in the notice. The HMO must carry out the corrective action within the time period specified by CMS in the notice.
(iv) The notice may provide the HMO an opportunity to submit, for CMS's approval, proposed methods for achieving compliance.
(d)
(2) In the notice, CMS provides the HMO with an opportunity for reconsideration of the revocation, including, at the HMO's election, a fair hearing.
(3) The revocation of qualification is effective on the tenth calendar day after the day of the notice unless CMS receives a request for reconsideration by that date.
(4) If after reconsideration CMS again determines to revoke the HMO's qualification, this revocation is effective on the tenth calendar day after the date of the notice of reconsidered determination.
(5) CMS publishes in the
(6) A revocation under this paragraph (d) has the effect described in § 417.164.
(e)
(1) The HMO's enrollees.
(2) Each employer or public entity that has offered enrollment in the HMO in accordance with subpart E of this part.
(3) Each lawfully recognized collective bargaining representative or other representative of the employees of the employer or public entity.
(f)
(i) Expenses for basic or supplemental health services that the enrollee obtained from other sources because the HMO failed to provide or arrange for them in accordance with its assurances.
(ii) Any amounts the HMO charged the enrollee that are inconsistent with its assurances. (Rules applicable to charges for all enrollees are set forth in §§ 417.104 and 417.105. The additional rules applicable to Medicare enrollees are in § 415.454.)
(2) This paragraph applies regardless of when the HMO failed to comply with the appropriate assurances.
(g)
(2)
When an HMO's qualification is revoked under § 417.163(d), the following rules apply:
(a) The HMO may not seek inclusion in employees health benefits plans under subpart E of this part.
(b) Inclusion of the HMO in an employer's health benefits plan—
(1) Is disregarded in determining whether the employer is subject to the requirements of subpart E of this part; and
(2) Does not constitute compliance with subpart E of this part by the employer.
An entity whose qualification as an HMO has been revoked by CMS for purposes of section 1310 of the PHS Act may, after completing the corrective action required under § 417.163(c)(2), reapply for a determination of qualification in accordance with the procedures specified in subpart D of this part.
(a)
(1) The qualification requirements are changed by Federal law; or
(2) The HMO shows good cause, consistent with the purposes of title XIII of the PHS Act.
(b)
(i) The HMO has filed for reorganization under Federal bankruptcy provisions and the reorganization can only be approved with the waiver of the assurances.
(ii) State laws governing the entity have been changed after it signed the assurances so as to prohibit the HMO from being organized and operated in a manner consistent with the signed assurances.
(2) Changes in State laws do not constitute good cause to the extent that the changes are preempted by Federal law under section 1311 of the PHS Act.
(c)
(a)
(b)
(2) The rules for payment to HMOs and CMPs are set forth in subparts N, O, and P of this part.
(3) The rules for HCPP participation in Medicare under section 1833(a)(1)(A) of the Act are set forth in subpart U of this part.
As used in this subpart and subparts K through R of this part, unless the context indicates otherwise—
(1) The other entity agrees to furnish specified services to the HMO's or CMP's Medicare enrollees;
(2) The HMO or CMP retains responsibility for the services; and
(3) Medicare payment to the HMO or CMP discharges the beneficiary's obligation to pay for the services.
(1) Are needed immediately because of an injury or sudden illness.
(2) Are such that the time required to reach the HMO's or CMP's providers or suppliers (or alternatives authorized by the HMO or CMP) would mean risk of permanent damage to the enrollee's health.
(1) Enrolls with an HMO or CMP after the date on which the HMO or CMP first enters into a risk contract under subpart L of this part; and
(2) Was not enrolled with the HMO or CMP at the time he or she became entitled to benefits under Part A or eligible to enroll in Part B of Medicare.
(1) Are required in order to prevent serious deterioration of the enrollee's health as a result of unforeseen injury or illness; and
(2) Cannot be delayed until the enrollee returns to the HMO's or CMP's geographic area.
(a) The changes made to section 1876 of the Act by section 114 of the Tax Equity and Fiscal Responsibility Act of 1982 became effective on February 1, 1985, the effective date of the initial implementing regulations.
(b) No new cost plan contracts are accepted by CMS. CMS will, however, accept and approve applications to modify cost plan contracts in order to expand service areas, provided they are submitted on or before September 1, 2006, and CMS determines that the organization continues to meet regulatory requirements and the requirements in its cost plan contract. Section 1876 cost plan contracts will not be extended or renewed beyond December 31, 2007, where conditions in paragraph (c) of this section are present.
(c)
(1) There were two or more coordinated care plan-model MA regional plans not offered by the same MA organization in the same service area or portion of a service area for the entire previous calendar year meeting the conditions in paragraph(c)(3) of this section; or
(2) There were two or more coordinated care plan-model MA local plans not offered by the same MA organization in the same service area or portion of a service area for the entire previous calendar year meeting the conditions in paragraph (c)(3) of this section.
(3)
At 76 FR 54633, Sept. 1, 2011, § 417.402 was amended by revising the second sentence of paragraph (c)(3),
(c) * * *
(3) * * *. If the service area includes a portion in more than one MSA with a population of more than 250,000, the minimum enrollment determination is made with respect to each such MSA and counties contiguous to the MSA that are not in another MSA with a population of more than 250,000.
(a) In order to contract with CMS under the Medicare program, an entity must—
(1) Be determined by CMS to be an HMO or CMP (in accordance with §§ 117.142 and 417.407, respectively); and
(2) Comply with the contract requirements set forth in subpart L of this part.
(b) CMS enters into or renews a contract only if it determines that action would be consistent with the effective and efficient implementation of section 1876 of the Act.
(a)
(b)
(2) The requirements of § 417.143 also apply to CMPs except that there are no application fees.
(c)
(d)
(2) If an entity no longer meets those requirements, CMS terminates the contract of that entity in accordance with § 417.494.
(a)
(b)
(i) Physicians' services performed by physicians.
(ii) Laboratory, x-ray, emergency, and preventive services.
(iii) Out-of-area coverage.
(iv) Inpatient hospital services.
(2) Exception for Medicaid prepayment risk contracts. An entity that had, before 1970, a Medicaid prepayment risk contract that did not include provision of inpatient hospital services is not required to provide those services.
(c)
(d)
(1) Physicians who are employees or partners of the entity; or
(2) Physicians or groups of physicians (organized on a group or individual practice basis) under contract with the entity to provide physicians' services.
(e)
(f)
(a)
(b)
(2) If the HMO or CMP is dissatisfied with a determination that it meets the requirements only for a reasonable cost contract, it may request reconsideration in accordance with the procedures specified in subpart R of this part.
(c)
(1) That it does not meet the contract requirements under section 1876 of the Act;
(2) The reasons why the HMO or CMP does not meet the contract requirements; and
(3) The HMO's or CMP's right to request reconsideration in accordance with the procedures specified in subpart R of this part.
(a)
(b)
(c)
(d)
(1) The HMO's or CMP's activities;
(2) The extent to which the HMO or CMP complies with each condition;
(3) The nature and extent of any deficiencies; and
(4) The need for improvement if CMS should enter into a contract with the HMO or CMP.
(e)
(1) Meets all the applicable requirements in the statute and regulations;
(2) Has at least 5,000 enrollees or 1,500 enrollees if it serves a primarily rural area as defined in § 417.413(b)(3);
(3) Has at least 75 Medicare enrollees or has an acceptable plan to achieve this Medicare membership within 2 years;
(4) Satisfies CMS that it can bear the potential losses of a risk contract; and
(5) Has not previously terminated or failed to renew a risk contract within the preceding 5 years, unless CMS determines that circumstances warrant special consideration.
(f)
(1) The HMO or CMP qualifies for a risk contract, but chooses a reasonable cost contract.
(2) The HMO or CMP meets the conditions for entering into a risk contract specified in paragraph (e) of this section except that CMS does not judge the HMO or CMP capable of bearing the potential losses of a risk contract.
(g) Regulations on reasonable cost and risk reimbursement are set forth in subparts O and P of this part.
The HMO or CMP must demonstrate that it—
(a) Has sufficient administrative capability to carry out the requirements of the contract; and
(b) Does not have any agents or management staff or persons with ownership or control interests who have been convicted of criminal offenses related to their involvement in Medicaid, Medicare, or social service programs under title XX of the Act.
(a)
(b)
(1) A nonrural HMO or CMP must currently have the following:
(i) At least 5,000 enrollees; and
(ii) At least 75 Medicare enrollees or a plan acceptable to CMS for achieving a Medicare enrollment of 75 within 2 years from the beginning of its initial contract period.
(2) A rural HMO or CMP must currently have—
(i) At least 1,500 enrollees; and
(ii) At least 75 Medicare enrollees or a plan acceptable to CMS for achieving a Medicare enrollment of 75 within 2 years from the beginning of its initial contract period.
(3) For purposes of this paragraph, an HMO or CMP is considered rural if at least 50 percent of its enrollees reside in nonmetropolitan areas. A nonmetropolitan area is an area—
(i) No part of which is within a metropolitan statistical area (MSA) as designated by the Executive Office of Management and Budget; and
(ii) That does not contain a city whose population exceeds 50,000 individuals.
(4) A subdivision or subsidiary of an HMO or CMP that meets the requirements of paragraph (b)(1) or (b)(2) of this section need not demonstrate that it meets those requirements as an independent unit if the HMO or CMP assumes responsibility for the financial risk, and adequate management and supervision of health care services furnished by its subdivision or subsidiary.
(c)
(1) At least 1,500 enrollees.
(2) At least 75 Medicare enrollees, or a plan acceptable to CMS for achieving—
(i) A Medicare enrollment of 75 within 2 years from the beginning of its initial contract period; and
(ii) At least 250 Medicare enrollees by the beginning of its fourth contract period.
(d)
(2)
(i) The HMO or CMP serves a geographic area in which Medicare beneficiaries and Medicaid recipients constitute more than 50 percent of the population. (CMS does not grant a waiver that would permit the percentage of Medicare and Medicaid enrollees to exceed the percentage of Medicare beneficiaries and Medicaid recipients in the population of the geographic area.)
(ii) The HMO or CMP is owned and operated by a government entity. The waiver may be for a period up to three
(iii) The HMO or CMP requests waiver of the composition rule because it is in the public interest. The organization provides documentation that supports one of the following:
(A) The organization serves a medically underserved rural or urban area.
(B) The organization demonstrates a long-term business and community service commitment to the area.
(C) The organization believes that a waiver is necessary to promote managed care choices in an area with limited or no managed care choices.
(3)
(i) If CMS determines that the HMO or CMP has complied, or made significant progress toward compliance, with the approved schedule, and that an extension is in the best interest of the Medicare program, CMS may extend the waiver of modification.
(ii) If CMS determines that the HMO or CMP has not complied with the approved schedule, CMS may apply the sanctions described in paragraphs (d)(6) and (d)(7) of this section.
(4)
(5)
(6)
(i) Require the HMO or CMP to stop accepting new enrollment applications after a date specified by CMS.
(ii) Deny payment for individuals who are formally added or “accreted” to CMS's records as Medicare enrollees after a date specified by CMS.
(7)
(8)
(e)
(2) CMS may waive the requirement of paragraph (e)(1) of this section if compliance would prevent compliance with the limitation on enrollment of Medicare beneficiaries and Medicaid recipients (paragraph (d) of this section) or result in an enrollment substantially nonrepresentative of the population of the HMO's or CMP's geographic area. The enrollment would be “substantially nonrepresentative” if the proportion of a subgroup to the total enrollment exceeded, by 10 percent or more, its proportion of the population in the HMO's or CMP's geographic area, as shown by census data or other data acceptable to CMS. For
(a)
(b)
(2)
(i) The sources are located within the HMO's or CMP's geographic area; or
(ii) It is common practice to refer patients to sources outside that geographic area.
(3)
(i) A hospice participating in Medicare is located within the HMO's or CMP's geographic area; or
(ii) It is common practice to refer patients to hospices outside the geographic area.
(c)
(2) An HMO or CMP must assume financial responsibility for services that the Medicare enrollee attempted to obtain from the HMO or CMP, but that the HMO or CMP failed to furnish or unreasonably denied, and that are found, upon appeal by the enrollee under subpart Q of this part, to be services that the enrollee was entitled to have furnished to him or her by the HMO or CMP.
(a)
(b)
(2) Suppliers must meet the conditions for coverage or conditions for certification of their services, as set forth elsewhere in this chapter.
(3) If more than one type of practitioner is qualified to furnish a particular service, the HMO or CMP may select the type of practitioner to be used.
(c)
(1) Services furnished by paramedical, ancillary, and other nonphysician personnel are furnished under the direct supervision of a physician;
(2) A physician is present to perform medical (as opposed to administrative) services whenever the clinics or offices are open; and
(3) Each patient is under the care of a physician.
(d)
(1) Services of physician assistants and nurse practitioners (as defined in § 491.2 of this chapter), and the services and supplies incident to their services. The conditions for payment, as set forth in §§ 405.2414 and 405.2415 of this chapter for services furnished by rural health clinics and Federally qualified health centers, respectively, also apply when those services are furnished by an HMO or CMP.
(2) When furnished by an HMO or CMP, services of clinical psychologists who meet the qualifications specified in § 410.71(d) of this chapter, and the services and supplies incident to their professional services.
(3) When an HMO or CMP contracts on—
(i) A risk basis, the services of a clinical social worker (as defined at § 410.73 of this chapter) and the services and supplies incident to their professional services; or
(ii) A cost basis, the services of a clinical social worker (as defined in § 410.73 of this chapter). Services incident to the professional services of a clinical social worker furnished by an HMO or CMP contracting on a cost basis are not covered by Medicare and payment will not be made for these services.
(e)
(2) The HMO or CMP must maintain a health (including medical) recordkeeping system through which pertinent information relating to the health care of its Medicare enrollees is accumulated and is readily available to appropriate professionals.
(a)
(b)
(a)
(b)
(c)
(2) As described in § 417.448, Medicare enrollees of risk HMOs or CMPs are liable for services that they obtain from
(i) Emergency or urgently needed; or
(ii) Determined, on appeal under subpart Q of this part, to be services that should have been furnished by the HMO or CMP.
Except as specified in §§ 417.423 and 417.424, an HMO or CMP must enroll, either for an indefinite period or for a specified period of at least 12 months, any individual who—
(a) Is entitled to Medicare benefits under Parts A and B or under Part B only;
(b) Lives within the geographic area served by the HMO or CMP;
(c) Is not enrolled in any other HMO or CMP that has entered into a contract under subpart L of this part;
(d) During an enrollment period of the HMO or CMP, completes and signs the HMO's or CMP's application form and gives whatever information is required for enrollment;
(e) Agrees to abide by the HMO's or CMP's rules after they are disclosed to him or her in connection with the enrollment process;
(f) Is not denied enrollment by the HMO or CMP under a selection policy, if any, that has been approved by CMS under § 417.424(b); and
(g) Is not denied enrollment by the HMO or CMP on the basis of any of the administrative criteria concerning denial of enrollment in § 417.424(a).
(a)
(2) However, if a beneficiary is already enrolled in an HMO or CMP when he or she is determined to have end-stage renal disease, the HMO or CMP—
(i) Must reenroll the beneficiary as required by § 417.434; and
(ii) May not disenroll the beneficiary except as provided in § 417.460.
(b)
(a)
(1) Cause the number of enrollees who are Medicare or Medicaid beneficiaries to exceed 50 percent of the HMO's or CMP's total enrollment;
(2) Prevent the HMO or CMP from complying with any of the other contract qualifying conditions set forth in subpart J of this part;
(3) Require the HMO or CMP to exceed its enrollment capacity; or
(4) Cause the enrollment to become substantially nonrepresentative of the general population in the HMO's or CMP's geographic area.
(b)
(a)
(2) During open enrollment, the HMO or CMP must enroll eligible Medicare beneficiaries in the order in which their applications are received and until its enrollment capacity is reached.
(3) The HMO or CMP may accept applications from Medicare beneficiaries after it has reached capacity if it places those individuals on a waiting list and enrolls them in chronological order as vacancies occur.
(4) An HMO or CMP with a risk contract must accept applications from eligible Medicare beneficiaries during the month of November 1998.
(b)
(2) CMS evaluates the HMO's or CMP's submittal under paragraph (b)(1) of this section.
(3) The HMO or CMP must promptly notify CMS if there is any change in its enrollment capacity.
(c)
(2) Any set aside vacancies that are not filled within a reasonable time after the beginning of the group contract enrollment period must be made available to Medicare beneficiaries and other nongroup applicants under the requirements of this subpart.
(a) With the exception of § 422.2276 of this chapter, the procedures and requirements relating to marketing requirements set forth in subpart V of part 422 of this chapter also apply to Medicare contracts with HMOs and CMPs under section 1876 of the Act.
(b) In applying those provisions, references to part 422 of this chapter must be read as references to this part, and references to MA organizations as references to HMOs and CMPs.
(a)
(2) The HMO or CMP must file and retain application forms for the period specified in CMS instructions.
(b)
(1) Each application is dated as of the day it is received.
(2) Applications are processed in chronological order by date of receipt.
(3) The HMO or CMP gives the beneficiary prompt notice of acceptance or denial in a format specified by CMS.
(4) The notice of acceptance. If the HMO or CMP is currently enrolled to capacity, explains the procedures that will be followed when vacancies occur.
(5) The notice of denial explains the reason for denial.
(6) The HMO or CMP transmits the information necessary for CMS to add the beneficiary to its records of the HMO's or CMP's Medicare enrollees—
(i) Within 30 days from the date of application or from the date a vacancy occurs for an applicant who was accepted (for future enrollment) while there were no vacancies; or
(ii) Within an additional period of time approved by CMS on a showing by the HMO or CMP that it needs more time.
(7) The HMO or CMP promptly notifies the beneficiary of the effective month of his or her enrollment as a
(8) If the HMO or CMP accepts applications while it is enrolled to capacity, its procedures ensure that vacancies are filled in chronological order by date of application of beneficiaries who are still eligible to enroll, unless that would result in failure to comply with any of the qualifying conditions set forth in § 417.413.
(a)
(b)
(c)
(d)
(e)
(1) At least 30, but no earlier than 90, days before the enrollee—
(i) Attains age 65; or
(ii) Reaches his or her 25th month of entitlement to social security disability benefits under title II of the Act or railroad retirement disability benefits under section 7(d) of the Railroad Retirement Act of 1974.
(2) Within 30 days after the enrollee initiates a course of renal dialysis, or on or before the day he or she enters a hospital in anticipation of a kidney transplant.
If an HMO or CMP requires periodic reenrollment, it must reenroll Medicare enrollees unless there is a basis for disenrollment as set forth in § 417.460.
(a)
(1) All benefits provided under the contract, as described in § 417.440.
(2) How and where to obtain services from or through the HMO or CMP.
(3) The restrictions on coverage for services furnished from sources outside a risk HMO or CMP, other than emergency services and urgently needed services (as defined in § 417.401).
(4) The obligation of the HMO or CMP to assume financial responsibility and provide reasonable reimbursement for emergency services and urgently needed services as required by § 417.414(c).
(5) Any services other than the emergency or urgently needed services that the HMO or CMP chooses to provide as permitted by this part, from sources outside the HMO or CMP. A cost HMO or CMP must disclose that the enrollee may receive services through any Medicare providers and suppliers.
(6) Premium information, including the amount (or if the amount cannot be included, the telephone number of the source from which this information may be obtained) and the procedures for paying premiums and other charges for which enrollees may be liable.
(7) Grievance and appeal procedures.
(8) Disenrollment rights.
(9) The obligation of an enrollee who is leaving the HMO's or CMP's geographic area for more than 90 days to notify the HMO or CMP of the move or extended absence and the HMO's or CMP's policies concerning retention of
(10) The expiration date of the Medicare contract with CMS and notice that both CMS and the HMO or CMP are authorized by law to terminate or refuse to renew the contract, and that termination or nonrenewal of the contract may result in termination of the individual's enrollment in the HMO or CMP.
(11) Advance directives as specified in paragraph (d) of this section.
(12) Any other matters that CMS may prescribe.
(b)
(c)
(d)
(i) Provide written information to those individuals concerning—
(A) Their rights under the law of the State in which the organization furnishes services (whether statutory or recognized by the courts of the State) to make decisions concerning such medical care, including the right to accept or refuse medical or surgical treatment and the right to formulate, at the individual's option, advance directives. Providers are permitted to contract with other entities to furnish this information but are still legally responsible for ensuring that the requirements of this section are met. Such information must reflect changes in State law as soon as possible, but no later than 90 days after the effective date of the State law; and
(B) The HMO's or CMP's written policies respecting the implementation of those rights, including a clear and precise statement of limitation if the HMO or CMP cannot implement an advance directive as a matter of conscience. At a minimum, this statement should:
(
(
(
(ii) Provide the information specified in paragraphs (d)(1)(i) of this section to each enrollee at the time of initial enrollment. If an enrollee is incapacitated at the time of initial enrollment and is unable to receive information (due to the incapacitating condition or a mental disorder) or articulate whether or not he or she has executed an advance directive, the HMO or CMP may give advance directive information to the enrollee's family or surrogate in the same manner that it issues other materials about policies and procedures to the family of the incapacitated enrollee or to a surrogate or other concerned persons in accordance with State law. The HMO or CMP is not relieved of its obligation to provide this information to the enrollee once he or she is no longer incapacitated or unable to receive such information. Follow-up procedures must be in place to ensure that the information is given to the individual directly at the appropriate time.
(iii) Document in the individual's medical record whether or not the individual has executed an advance directive;
(iv) Not condition the provision of care or otherwise discriminate against an individual based on whether or not the individual has executed an advance directive;
(v) Ensure compliance with requirements of State law (whether statutory or recognized by the courts of the State) regarding advance directives;
(vi) Provide for education of staff concerning its policies and procedures on advance directives; and
(vii) Provide for community education regarding advance directives that may include material required in
(2) The HMO or CMP—(i) Is not required to provide care that conflicts with an advance directive.
(ii) Is not required to implement an advance directive if, as a matter of conscience, the HMO or CMP cannot implement an advance directive and State law allows any health care provider or any agent of such provider to conscientiously object.
(3) The HMO or CMP must inform individuals that complaints concerning non-compliance with the advance directive requirements may be filed with the State survey and certification agency.
(a)
(2) A Medicare enrollee is also entitled to receive timely and reasonable payment directly (or have payment made on his or her behalf) for services he or she obtained from a provider or supplier outside the HMO or CMP if those services are—
(i) Emergency services or urgently needed services as defined § 417.401;
(ii) Services denied by the HMO or CMP and found (upon appeal under subpart Q of this part) to be services the enrollee was entitled to have furnished by the HMO or CMP.
(b)
(i) Medicare Part A and Part B services if the enrollee is entitled to benefits under both programs.
(ii) Medicare Part B services if the enrollee is entitled only under that program.
(2)
(ii) An HMO or CMP may elect to provide qualified prescription drug coverage (as defined at § 423.104 of this chapter) as an optional supplemental service in accordance with the applicable requirements under part 423 of this chapter, including § 423.104(f)(4) of this chapter.
(iii) The HMO or CMP may not set health status standards for those enrollees whom it accepts for these optional supplemental services.
(3)
(4)
(i) A reduction in the HMO's or CMP's premium rate or in other charges for services furnished to Medicare enrollees.
(ii) Provision of health benefits or services beyond the required Part A and Part B coverage.
(5)
(c)
(ii)
(A) Is an employee or contractor of the HMO or CMP; and
(B) Is not an employee of the designated hospice and does not receive compensation from the hospice for those services.
(2)
(i) The effective date of the enrollee's revocation of the election of hospice care as described in § 418.28 of this chapter.
(ii) The date the enrollee exhausts his or her hospice benefits.
(3)
(d)
(1) Is not responsible for the provision of any of the inpatient hospital services under Part A during the stay and is not required to pay for those services;
(2) Must assume responsibility for payment for or provision of inpatient hospital services under Part A on the day after the day of discharge from the inpatient stay; and
(3) Is responsible for the full scope of services under paragraph (b) of this section, other than inpatient hospital services under Part A, beginning on the effective date of enrollment.
(e)
(1) Is financially responsible for payment of the inpatient services under Part A through the date the beneficiary is discharged from the inpatient stay; and
(2) Is not responsible for the provision of services, furnished on or after the effective date of disenrollment, other than inpatient hospital services under Part A.
(f)
(2) Before giving notice of noncoverage, the HMO or CMP must obtain the concurrence of its affiliated physician responsible for the hospital care of the enrollee, or other physician as authorized by the HMO or CMP.
(3) The HMO or CMP must give the enrollee written notice that includes the following:
(i) The reason why inpatient hospital care is no longer needed.
(ii) The effective date of the enrollee's liability for continued inpatient care.
(iii) The enrollee's appeal rights.
(4) If the HMO or CMP delegates to the hospital the determination of noncoverage of inpatient care, the hospital obtains the concurrence of the HMO- or CMP-affiliated physician responsible for the hospital care of the enrollee, or other physician as authorized by the HMO or CMP, and sends notice, following the procedures set forth in § 412.42(c)(3) of this chapter.
(a)
(b)
(i) Elects to receive reduced payment so that there is no difference between the average of its per capita rates of payment and its ACR; or
(ii) Elects to receive partially reduced payment and furnish Medicare enrollees with additional benefits described in § 417.440 (b)(4) so that the combined value of benefits and reduced payment is equivalent to the difference between the average of its per capita rates of payment and its ACR.
(2)
(a)
(1) On February 1, 1985, was enrolled—
(i) In an HMO or CMP that had in effect a cost contract entered into under section 1876 of the Act in accordance with regulations in effect before February 1, 1985; or
(ii) In an HCPP that was being reimbursed on a reasonable cost basis under section 1833(a)(1)(A) of the Act.
(2) Has continued enrollment in the same entity without interruption or disenrolled after February 1, 1985, and later reenrolled in the same entity.
(b)
(2) A nonrisk enrollee of a risk HMO or CMP is not entitled to additional benefits under § 417.442.
(c)
(i) CMS notifies each affected enrollee of the decision at least 90 days prior to the effective date.
(ii) The nonrisk Medicare enrollees complete and sign forms stating that
(iii) The HMO or CMP notifies each affected enrollee, in writing, at least 30 days in advance, of the date upon which his or her coverage under the risk portion of the contract takes effect.
(2)
(d)
(a)
(1) Directly by the HMO or CMP; or
(2) Through arrangements made by the HMO or CMP.
(b)
(1) New Medicare enrollees;
(2) Nonrisk Medicare enrollees who convert to risk reimbursement; and
(3) Nonrisk Medicare enrollees who elect special supplemental benefit plans.
(c)
(d)
(a)
(1) CMS's liability for payments to an HMO or CMP on behalf of a Medicare beneficiary begins on the first day of the month in which he or she is—
(i) Entitled to Medicare benefits; and
(ii) Enrolled in an HMO or CMP; and
(2) The effective month of coverage may not be earlier than the first month after, nor later than the third month after the month in which CMS receives the information necessary to include the beneficiary as a Medicare enrollee of the HMO or CMP in CMS records.
(b)
(2) If an individual becomes an HMO or CMP enrollee before becoming entitled to Medicare Part B benefits, the effective month of coverage is the first month for which he or she becomes entitled to Medicare Part B benefits.
(c)
(a)
(2) The deductible and coinsurance amounts may be paid by or on behalf of the enrollee in the form of a premium, membership fee, charge per unit, or other similar charge.
(3) The sum of the amounts the HMO or CMP charges its Medicare enrollees for Medicare deductibles and coinsurance may not exceed, on the average, the actuarial value of the deductible and coinsurance the Medicare enrollees otherwise would have been liable for had they not enrolled in the HMO or CMP or in another HMO or CMP.
(b)
(1) All services that are not covered under Medicare Part A or Part B; or
(2) If entitled only to Medicare Part B benefits, all services that are not covered under Medicare Part B.
(c)
(d)
(2) If a supplemental benefit plan premium includes charges for both noncovered services and the deductible and coinsurance amounts applicable to covered services, the portion of the premium that is for deductibles and coinsurance must be computed separately and must be disclosed to the beneficiary during the enrollment process and before he or she elects coverage options.
(3) The sum of the amounts an HMO or CMP charges its Medicare enrollees for services that are not covered under Part A or Part B may not exceed the ACR for these services.
(e)
(a)
(1) Deductible and coinsurance amounts applicable to furnished covered services;
(2) Charges for noncovered services or services for which the enrollee is liable as described in § 417.452; and
(3) Services for which Medicare is not the primary payor as provided in § 417.528.
(b)
(c)
(d)
(e)
(1) Chemotherapy administration services to include chemotherapy drugs and radiation therapy integral to the treatment regimen.
(2) Renal dialysis services as defined at section 1881(b)(14)(B) of the Act.
(3) Skilled nursing care defined as services provided during a covered stay in a skilled nursing facility during the period for which cost sharing would apply under Original Medicare.
(a)
(1) Emergency services;
(2) Urgently needed services for which the HMO or CMP has assumed financial responsibility; or
(3) On appeal under subpart Q of this part, found to be services the enrollee was entitled to have furnished by the HMO or CMP.
(b)
(c)
(1) Incorrectly collected amounts that were not collected as premiums.
(2) Other amounts due.
(3) All amounts due, if the HMO or CMP is going out of business.
(d)
(e)
(f)
An HMO or CMP agrees not to recoup deductible and coinsurance amounts for which Medicare enrollees were liable in a previous contract period except in the following circumstances:
(a) The HMO or CMP failed to collect the deductible and coinsurance
(1) Underestimation of the actuarial value of the deductible and coinsurance amounts; or
(2) A billing error.
(b) The HMO or CMP has identified the amounts and obtained advance CMS approval of the recoupment and the method and timing of recoupment.
(c) The HMO or CMP collects these amounts no later than the end of the contract period following the contract period during which they were found to be due.
(a)
(1) Disenroll a Medicare beneficiary; or
(2) Orally or in writing, or by any action or inaction, request or encourage a Medicare enrollee to disenroll.
(b)
(i) Fails to pay the required premiums or other charges;
(ii) Commits fraud or permits abuse of his or her enrollment card; or
(iii) Behaves in a manner that seriously impairs the HMO's or CMP's ability to furnish health care services to the particular enrollee or to other enrollees.
(2)
(i) Moves out of the HMO's or CMP's geographic area;
(ii) Fails to convert to the risk provisions of the HMO's or CMP's Medicare contract;
(iii) Loses entitlement to Medicare Part B benefits; or
(iv) Dies.
(3)
(c)
(i) Can demonstrate to CMS that it made reasonable efforts to collect the unpaid amount;
(ii) Gives the enrollee written notice of disenrollment, including an explanation of the enrollee's right to a hearing under the HMO's or CMP's grievance procedures; and
(iii) Sends the notice of disenrollment to the enrollee before it notifies CMS.
(2)
(d)
(i) Knowingly provides, on the application form, fraudulent information that materially affects the beneficiary's eligibility to enroll in the HMO or CMP; or
(ii) Intentionally permits others to use his or her enrollment card to obtain services from the HMO or CMP.
(2)
(i) The notice must be mailed to the enrollee before submission of the disenrollment notice to CMS.
(ii) The notice must include an explanation of the enrollee's right to have the disenrollment heard under the grievance procedures established in accordance with § 417.436.
(3)
(e)
(2)
(3)
(4)
(5)
(ii) CMS makes this decision within 20 working days after receipt of the documentation material, and notifies the HMO or CMP within 5 working days after making its decision.
(6)
(f)
(ii)
(iii)
(2)
(i) An absence for an extended period means an uninterrupted absence from the HMO's or CMP's geographic area for more than 90 days but less than 1 year.
(ii) The HMO or CMP and the enrollee may mutually agree upon restrictions for obtaining services while the enrollee is absent for an extended period from the HMO's or CMP's geographic area. However, restrictions may not be imposed on the scope of services described in § 417.440.
(iii) HMOs and CMPs that choose to exercise this exception must make the option available to all Medicare enrollees who are absent for an extended period from their geographic areas. However, HMOs and CMPs may limit this option to enrollees who go to a geographic area served by an affiliated HMO or CMP.
(iv) As used in this paragraph, “affiliated HMO or CMP” means an HMO or CMP that—
(A) Is under common ownership or control of the HMO or CMP that seeks to retain the absent enrollees; or
(B) Has in effect an agreement to furnish services to enrollees who are on an extended absence from the geographic area of the HMO or CMP that seeks to retain them.
(v) When the enrollee returns to the HMO's or CMP's geographic area (even temporarily), the restrictions of § 417.448(a) (which limit payment for services not provided or arranged for by the HMO or CMP) apply again immediately.
(vi) If the enrollee fails to return to the HMO's or CMP's geographic area within 1 year from the date he or she left that area, the HMO or CMP must disenroll the beneficiary on the first day of the month following the anniversary of the date the enrollee left that area in accordance with paragraph (f)(1) of this section.
(g)
(2)
(h)
(2)
(i)
(a)
(2) The enrollee may request a certain disenrollment date but it may be no earlier than the first day of the month following the month in which the HMO or CMP receives the request.
(b)
(1) Submit a disenrollment notice to CMS promptly;
(2) Provide the enrollee with a copy of the request for disenrollment; and
(3) In the case of a risk HMO or CMP, also provide the enrollee with a statement explaining that he or she—
(i) Remains enrolled until the effective date of disenrollment; and
(ii) Until that date, is subject to the restrictions of § 417.448(a) under which neither the HMO or CMP nor CMS pays for services not provided or arranged for by the HMO or CMP.
(c)
(a)
(2) Disenrollment is effective no earlier than the month immediately after, and no later than the third month after, the month in which CMS receives the disenrollment notice in acceptable form.
(b)
(2)
(3)
(4)
(c)
(2)
(i) Determines the month in which its liability for payments ends; and
(ii) Notifies the HMO or CMP and all affected Medicare enrollees as soon as practicable.
(a)
(b)
(1) Specific contract requirements; and
(2) Procedures for renewal, nonrenewal, or termination of a contract.
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(2) In applying the part 422 rules, references to “M+C organizations” or “M+C plans” must be read as references to “risk HMOs and CMPs”.
(i) The HMO or CMP must comply with the requirements at § 422.152(b)(5).
(j) All coordinated care contracts (including local and regional PPOs, contracts with exclusively SNP benefit packages, private fee-for-service contracts, and MSA contracts), and all cost contracts under section 1876 of the Act, with 600 or more enrollees in July of the prior year, must contract with approved Medicare Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey vendors to conduct the Medicare CAHPS satisfaction survey of Medicare plan enrollees in accordance with CMS specifications and submit the survey data to CMS.
(a)
(b)
(1) For the initial term, at least 12 months, but no more than 23 months.
(2) For any subsequent term, 12 months.
If CMS waives any of the qualifying conditions required under subpart J of this part, the contract must specify the following information for each waived condition:
(a) The specific terms of the waiver.
(b) The expiration date of the waiver.
(c) Any other information required by CMS.
The contract must provide that the HMO or CMP agrees to comply with—
(a) The requirements for QIO review of services furnished to Medicare enrollees as set forth in subchapter D of this chapter;
(b) Sections 1318(a) and (c) of the PHS Act, which pertain to disclosure of certain financial information;
(c) Section 1301(c)(8) of the PHS Act, which relates to liability arrangements to protect enrollees of the HMO or CMP; and
(d) The reporting requirements in § 417.126(a), which pertain to the monitoring of an HMO's or CMP's continued compliance.
(a) The contract must specify that an HMO or CMP may operate a physician incentive plan only if—
(1) No specific payment is made directly or indirectly under the plan to a physician or physician group as an inducement to reduce or limit medically necessary services furnished to an individual enrollee; and
(2) The stop-loss protection, enrollee survey, and disclosure requirements of this section are met.
(b)
(c)
(d)
(e)
(f)
(1) Withholds greater than 25 percent of potential payments.
(2) Withholds less than 25 percent of potential payments if the physician or physician group is potentially liable for amounts exceeding 25 percent of potential payments.
(3) Bonuses that are greater than 33 percent of potential payments minus the bonus.
(4) Withholds plus bonuses if the withholds plus bonuses equal more than 25 percent of potential payments. The threshold bonus percentage for a
(5) Capitation, arrangements, if—
(i) The difference between the maximum potential payments and the minimum potential payments is more than 25 percent of the maximum potential payments; or
(ii) The maximum and minimum potential payments are not clearly explained in the physician's or physician group's contract.
(6) Any other incentive arrangements that have the potential to hold a physician or physician group liable for more than 25 percent of potential payments.
(g)
(1) Conduct enrollee surveys. These surveys must—
(i) Include either all current Medicare/Medicaid enrollees in the HMO or CMP and those who have disenrolled (other than because of loss of eligibility in Medicaid or relocation outside the HMO's or CMP's service area) in the past 12 months, or a sample of these same enrollees and disenrollees;
(ii) Be designed, implemented, and analyzed in accordance with commonly accepted principles of survey design and statistical analysis;
(iii) Address enrollees/disenrollees satisfaction with the quality of the services provided and their degree of access to the services; and
(iv) Be conducted no later than 1 year after the effective date of the Medicare contract and at least annually thereafter.
(2) Ensure that all physicians and physician groups at substantial financial risk have either aggregate or per-patient stop-loss protection in accordance with the following requirements:
(i) If aggregate stop-loss protection is provided, it must cover 90 percent of the costs of referral services (beyond allocated amounts) that exceed 25 percent of potential payments.
(ii) If the stop-loss protection provided is based on a per-patient limit, the stop-loss limit per patient must be determined based on the size of the patient panel and may be a single combined limit or consist of separate limits for professional services and institutional services. In determining patient panel size, the patients may be pooled in accordance with paragraph (h)(2) of this section. Stop-loss protection must cover 90 percent of the costs of referral services that exceed the per patient limit. The per-patient stop-loss limit is as follows:
(h)
(2)
(i) It is otherwise consistent with the relevant contracts governing the compensation arrangements for the physician or physician group;
(ii) The physician or physician group is at risk for referral services with respect to each of the categories of patients being pooled;
(iii) The terms of the compensation arrangements permit the physician or physician group to spread the risk across the categories of patients being pooled;
(iv) The distribution of payments to physicians from the risk pool is not calculated separately by patient category; and
(v) The terms of the risk borne by the physicians or physician group are comparable for all categories of patients being pooled.
(3)
(i) Whether the prepaid plan uses a physician incentive plan that affects the use of referral services.
(ii) The type of incentive arrangement.
(iii) Whether stop-loss protection is provided.
(iv) If the prepaid plan was required to conduct a survey, a summary of the survey results.
(i)
(i) Disclose to CMS any incentive plan between the physician group and its individual physicians that bases compensation to the physician on the use or cost of services furnished to Medicare beneficiaries or Medicaid recipients. The disclosure must include the information specified in paragraphs (h)(1)(i) through (h)(1)(vii) of this section and be made at the times specified in paragraph (h)(2) of this section.
(ii) Provide adequate stop-loss protection to the individual physicians.
(iii) Conduct enrollee surveys as specified in paragraph (g)(1) of this section.
(2)
(i) Disclose to CMS any incentive plan between the entity and a physician or physician group that bases compensation to the physician or physician group on the use or cost of services furnished to Medicare beneficiaries or Medicaid recipients. The disclosure must include the information required to be disclosed under paragraphs (h)(1)(i) through (h)(1)(vii) of this section and be made at the times specified in paragraph (h)(2) of this section.
(ii) If the physician incentive plan puts a physician or physician group at substantial financial risk for the cost of services the physician or physician group does not furnish—
(A) Meet the stop-loss protection requirements of this subpart; and
(B) Conduct enrollee surveys as specified in paragraph (g)(1) of this section.
(3) For purposes of paragraph (i)(2) of this section, an entity includes, but is not limited to, an individual practice association that contracts with one or more physician groups and a physician hospital organization.
(j)
A reasonable cost contract must provide that the HMO or CMP agrees to maintain books, records, documents, and other evidence of accounting procedures and practices that—
(a) Are sufficient to—
(1) Ensure an audit trail; and
(2) Properly reflect all direct and indirect costs claimed to have been incurred under the contract; and
(b) Include at least records of the following:
(1) Ownership, HMO or CMP, and operation of the HMO's or CMP's financial, medical, and other recordkeeping systems.
(2) Financial statements for the current contract period and three prior periods.
(3) Federal income tax or information returns for the current contract period and three prior periods.
(4) Asset acquisition, lease, sale, or other action.
(5) Agreements, contracts, and subcontracts.
(6) Franchise, marketing, and management agreements.
(7) Schedules of charges for the HMO's or CMP's fee-for-service patients.
(8) Matters pertaining to costs of operations.
(9) Amounts of income received by source and payment.
(10) Cash flow statements.
(11) Any financial reports filed with other Federal programs or State authorities.
A risk contract must provide that the HMO or CMP agrees to maintain and make available to CMS upon request, books, records, documents, and other evidence of acounting procedures and practices that—
(a) Are sufficient to—
(1) Establish component rates of the ACR for determining additional and supplementary benefits; and
(2) Determine the rates utilized in setting premiums for State insurance agency purposes; and
(b) Include at least any records or financial reports filed with other Federal agencies or State authorities.
The contract must provide that the HMO or CMP agrees to the following:
(a) HHS may evaluate, through inspection or other means, the quality, appropriateness, and timeliness of services furnished under the contract to its Medicare enrollees.
(b) HHS may evaluate, through inspection or other means, the facilities of the HMO or CMP when there is reasonable evidence of some need for that inspection.
(c) HHS, the Comptroller General, or their designees may audit or inspect any books and records of the HMO or CMP or its transferee that pertain to any aspect of services performed, reconciliation of benefit liabilities, and determination of amounts payable under the contract.
(d) HHS may evaluate, through inspection or other means, the enrollment and disenrollment records for the current contract period and three prior periods, when there is reasonable evidence of some need for that inspection.
(e) In the case of a reasonable cost HMO or CMP to make available for the purposes specified in paragraphs (a), (b), (c), and (d) of this section, its premises, physical facilities, and equipment, its records relating to its Medicare enrollees, the records specified in § 417.480 and any additional relevant information that CMS may require.
(f) That the right to inspect, evaluate, and audit, will extend through three years from the date of the final settlement for any contract period unless—
(1) CMS determines there is a special need to retain a particular record or group of records for a longer period and notifies the HMO or CMP at least 30 days before the normal disposition date;
(2) There has been a termination, dispute, fraud, or similar fault by the HMO or CMP, in which case the retention may be extended to three years from the date of any resulting final settlement; or
(3) CMS determines that there is a reasonable possibility of fraud, in which case it may reopen a final settlement at any time.
(a)
(1) Performs some of the HMO's or CMP's management functions under contract or delegation;
(2) Furnishes services to Medicare enrollees under an oral or written agreement; or
(3) Leases real property or sells materials to the HMO or CMP at a cost of more than $2,500 during a contract period.
(b)
(1) HHS, the Comptroller General, or their designees have the right to inspect, evaluate, and audit any pertinent books, documents, papers, and records of the subcontractor involving transactions related to the subcontract; and
(2) The right under paragraph (b)(1) of this section to information for any particular contract period will exist for a period equivalent to that specified in § 417.482(f).
The contract must provide that the HMO or CMP agrees to the following:
(a) To submit to CMS—
(1) All financial information required under subpart O of this part and for final settlement; and
(2) Any other information necessary for the administration or evaluation of the Medicare program.
(b) To comply with the requirements set forth in part 420, subpart C, of this chapter pertaining to the disclosure of ownership and control information.
(c) To comply with the requirements of the Privacy Act, as implemented by 45 CFR part 5b and subpart B of part 401 of this chapter, with respect to any system of records developed in performing carrier or intermediary functions under §§ 417.532 and 417.533.
(d) To meet the confidentiality requirements of § 482.24(b)(3) of this chapter for medical records and for all other enrollee information that is—
(1) Contained in its records or obtained from CMS or other sources; and
(2) Not covered under paragraph (c) of this section.
A risk contract must provide that the HMO or CMP agrees to give notice as follows if the contract is terminated:
(a) At least 60 days before the effective date of termination, to give its Medicare enrollees a written notice that—
(1) Specifies the termination date; and
(2) Describes the alternatives available for obtaining Medicare services after termination.
(b) To pay the cost of the written notices.
A contract with an HMO or CMP is renewed automatically for the next 12-month period unless CMS or the HMO or CMP decides not to renew, in accordance with § 417.492.
(a)
(i) Give written notice to CMS at least 90 days before the end of the current contract period;
(ii) Notify each Medicare enrollee by mail at least 60 days before the end of the contract period; and
(iii) Notify the general public at least 30 days before the end of the contract period, by publishing a notice in one or more newspapers of general circulation in each community or county located in the HMO's or CMP's geographic area.
(2) CMS may accept a nonrenewal notice submitted less than 90 days before the end of a contract period if—
(i) The HMO or CMP notifies its Medicare enrollees and the public in accordance with paragraph (a)(1) of this section; and
(ii) Acceptance would not otherwise jeopardize the effective and efficient administration of the Medicare program.
(b)
(i) To the HMO or CMP at least 90 days before the end of the contract period.
(ii) To the HMO's or CMP's Medicare enrollees at least 60 days before the end of the contract period.
(iii) To the general public at least 30 days before the end of the contract period.
(2)
(a)
(2) If the contract is modified, the HMO or CMP must notify its Medicare enrollees of any changes that CMS determines are appropriate for notification.
(3) If the contract is terminated, the HMO or CMP must notify its Medicare enrollees, and CMS notifies the general public, at least 30 days before the termination date.
(b)
(i) The HMO or CMP has failed substantially to carry out the terms of the contract.
(ii) The HMO or CMP is carrying out the contract in a manner that is inconsistent with the effective and efficient implementation of section 1876 of the Act.
(iii) The HMO or CMP has failed substantially to comply with the composition of enrollment requirements specified in § 417.413(d).
(iv) CMS determines that the HMO or CMP no longer meets the requirements of section 1876 of the Act and this subpart for being an HMO or CMP.
(2) If CMS decides to terminate a contract, it sends a written notice informing the HMO or CMP of its right to appeal the termination in accordance with part 422 subpart N of this chapter.
(3) An HMO or CMP with a risk contract must notify its Medicare enrollees of the termination as described in § 417.488.
(4) CMS notifies the HMO's or CMP's Medicare enrollees and the general public of the termination at least 30 days before the effective date of termination.
(c)
(1) The HMO or CMP must notify CMS at least 90 days before the effective date of the termination and must include in its notice the reasons for the termination.
(2) The HMO or CMP must notify its Medicare enrollees of the termination at least 60 days before the termination date. Risk HMOs or CMPs must also provide a written description of alternatives available for obtaining Medicare services after termination of the contract. The HMO or CMP is responsible for the cost of these notices.
(3) The HMO or CMP must notify the general public of the termination at least 30 days before the termination date.
(4) The contract is terminated effective 60 days after the HMO or CMP mails the notice to Medicare enrollees as required in paragraph (c)(2) of this section.
(5) CMS's liability for payment ends as of the first day of the month after the last month for which the contract is in effect.
(a) Except as provided in paragraph (c) of this section, the rights, procedures, and requirements related to intermediate sanctions and civil money penalties set forth in part 422 subparts O and T of this chapter also apply to Medicare contracts with HMOs or CMPs under sections 1876 of the Act.
(b) In applying paragraph (a) of this section, references to part 422 of this
(c) In applying paragraph (a) of this section, the amounts of civil money penalties that can be imposed are governed by section 1876(i)(6)(B) and (C) of the Act, not by the provisions in part 422 of this chapter.
(a) The provisions set forth in subpart L of part 422 of this chapter also apply to Medicare contracts with HMOs and CMPs under section 1876 of the Act.
(b) In applying these provisions, references to “M+C organizations” must be read as references to “HMOs and CMPs”.
(c) In § 422.550, reference to “subpart K of this part” must be read as reference to “subpart L of part 417 of this chapter”.
(d) In § 422.553, reference to “subpart K of this part” must be read as reference to “subpart J of part 417 of this chapter”.
(a)
(b)
(2) In certain cases a risk HMO or CMP also receives payments on a reasonable cost basis for certain Medicare enrollees who retain nonrisk status, as provided in § 417.444, after the HMO or CMP enters into a risk contract.
Subpart O of this part set forth the principles that CMS follows in determining Medicare payment to an HMO or CMP that has a reasonable cost contract. Subpart P of this part describes the per capita method of Medicare payment to HMOs or CMPs that contract on a risk basis.
(a)
(2) The circumstances under which an HMO or CMP may charge, or authorize a provider to charge, for covered Medicare services for which Medicare is not the primary payer are stated in paragraphs (b) and (c) of this section.
(b)
(1) The insurance carrier, employer, or other entity that is liable to pay for these services; or
(2) The Medicare enrollee, to the extent that he or she has been paid by the carrier, employer, or other entity.
(c)
(1) The Medicare enrollee is covered under the plan; and
(2) Under section 1862(b) of the Act, CMS is precluded from paying for the covered services .
(d)
(1) Identify payers that are primary to Medicare under section 1862(b) of the Act;
(2) Determine the amounts payable by these payers; and
(3) Coordinate the benefits of its Medicare enrollees with these payers.
This subpart sets forth the principles that CMS follows to determine the amount it pays for services furnished by a cost HMO or CMP to its Medicare enrollees. These principles are based on sections 1861(v) and 1876 of the Act and are, for the most part, the same as those set forth—
(a) In part 412 of this chapter, for paying the costs of inpatient hospital services which, for cost HMOs and CMPs, are considered “reasonable” only if they do not exceed the amounts allowed under the prospective payment system; and
(b) In part 413 of this chapter, for the costs of all other covered services.
(a) If a Medicare enrollee of an HMO or CMP with a reasonable cost contract makes an election under § 418.24 of this chapter to receive hospice care services, payment for these services is made to the hospice that furnishes the services in accordance with part 418 of this chapter.
(b) While the enrollee's hospice election is in effect, CMS pays the HMO or CMP on a reasonable cost basis for only the following covered Medicare services furnished to the Medicare enrollee:
(1) Services of the enrollee's attending physician if the physician is an employee or contractor of the HMO or CMP and is not employed by or under contract to the enrollee's hospice.
(2) Services not related to the treatment of the terminal condition for which hospice care was elected or a condition related to the terminal condition.
(a)
(i) Proper and necessary;
(ii) Reasonable in amount; and
(iii) Except as provided in § 417.550, appropriately apportioned among the HMO's or CMP's Medicare enrollees, other enrollees, and nonenrolled patients.
(2) In determining fair and equitable payment for the HMOs or CMPs, CMS generally applies the cost payment principles set forth in § 413.5 of this chapter.
(3) In judging whether costs are reasonable, CMS applies the weighted average of the AAPCCs of each class of the HMO's or CMP's Medicare enrollees (as defined in § 417.582) for the HMO's or CMP's geographic area as an absolute limitation on the total amount payable.
(b)
(2) CMS adjusts the interim per capita rate as necessary during the contract period and makes final adjustments at the end of the contract period.
(3) In determining the amount due the HMO or CMP, CMS deducts from the reasonable cost actually incurred by the HMO or CMP for covered services furnished to its Medicare enrollees, an amount equal to the actuarial value of the applicable Medicare Part
(c)
(1) Direct payment by CMS.
(2) Direct payment by the HMO or CMP.
(d)
(e)
(1) Determine the eligibility of its Medicare enrollees to receive covered services through the HMO or CMP;
(2) Make proper coverage decisions and appropriate payments, in accordance with §§ 421.100 and 421.200 of this chapter, for the services furnished to its Medicare enrollees;
(3) Ensure that providers maintain and furnish appropriate documentation of physician certification and recertification, to the extent required under subpart B of part 424 of this chapter; and
(4) Carry out any other procedures required by CMS.
(f)
(g)
(2) In computing the Medicare payment to the HMO or CMP, CMS deducts these payments and any other payments made by the Medicare intermediary or carrier on behalf of the HMO or CMP (such as payment for emergency or urgently needed services under § 417.558).
(h)
In paying for Part B services furnished to its enrollees by suppliers, the HMO or CMP must—
(a) Determine the eligibility of individuals to receive those services through the HMO or CMP;
(b) Make proper coverage decisions and appropriate payment as authorized under § 421.200 of this chapter for the services for which its Medicare enrollees are eligible; and
(c) Carry out any other procedures that CMS may require.
(a)
(b)
(2) The allowability of other costs is determined in accordance with principles set forth in §§ 417.538 through 417.550.
(3) Costs for covered services for which Medicare is not the primary payor, as described in § 417.528, are not allowable.
(c)
(a)
(b)
(c)
(d)
(e)
(f)
(i) They are attributable to Medicare deductible and coinsurance amounts for which the Medicare enrollee is liable; and
(ii) The HMO or CMP has made a reasonable, but unsuccessful, effort to collect those amounts.
(2) If all or part of the deductible and coinsurance amounts is payable through a monthly premium or other periodic payment, the amount allowed as a bad debt may not exceed three times the monthly rate for the actuarial value of the deductible and coinsurance amounts, or its equivalent, if the periodic payment is on other than a monthly basis.
(3) Any bad debt related to a service furnished to a Medicare enrollee of the HMO or CMP, and claimed on a cost report submitted for payment by a provider or other facility reimbursed on a cost basis, may not be claimed as a bad debt by the HMO or CMP.
(g)
(h)
(i)
(j)
(k)
(2) An entity is not considered related to the HMO or CMP merely because—
(i) It has a risk or incentive agreement under which the HMO or CMP reimburses or compensates the entity for
(ii) Substantially all the services the entity furnishes are furnished to the HMO's or CMP's enrollees.
(3) However, an entity described in paragraph (k)(2) of this section and an HMO or CMP are considered related if either of them is in a position to exercise significant management or ownership influence or control over the other.
(l)
(m)
(1) For ESRD treatment, the limitations authorized under § 413.170 of this chapter.
(2) For services of physical, occupational, and speech therapists and other therapists and nonphysician health specialists, the limitations set forth in § 413.106 of this chapter.
(3) For drugs, the allowable cost as determined under §§ 405.517 and 410.29 of this chapter.
(4) The overall cost limits established in accordance with § 413.30 of this chapter.
(5) The limitation to the lesser of reasonable cost or customary charges, as set forth in § 413.13 of this chapter.
(a)
(b)
(c)
(d)
(a)
(b)
Reinsurance costs are not allowable.
(a)
(2) Physician compensation may take various forms, but the aggregate compensation allowable must be reasonable in relation to the services personally furnished.
(3) If aggregate physician compensation costs exceed what is normally incurred, the excess is not a reasonable cost.
(b)
(2) To be allowable, compensation must be reasonable in relation to the personal services furnished.
(a) Do not exceed those that a prudent and cost-conscious buyer would incur to purchase those services; and
(b) Are comparable to costs incurred for similar services furnished by similar physicians or other suppliers in the same or a similar geographic area.
(a)
(b)
(c)
(1) The provider furnishes services to the HMO's or CMP's enrollees infrequently;
(2) The charges represent an insignificant portion of total Medicare reimbursement to the HMO or CMP; and
(3) The charges do not exceed the customary charges by the provider to its other patients for similar services.
(a)
(b)
(1) Reporting increases and decreases in the number of Medicare enrollees.
(2) Obtaining independent certification of the HMO's or CMP's cost report to the extent that it is for Medicare purposes.
(3) Reporting special data that CMS requires solely for program planning and evaluation.
(c)
(d)
(a)
(1) In accordance with this subpart; and
(2) Using methods approved by CMS.
(b)
(1) The cost of services furnished to Medicare enrollees is not borne by other enrollees and nonenrolled patients; and
(2) The cost of the services furnished to other enrollees and nonenrolled patients is not borne by Medicare.
The Medicare share of the cost of covered services furnished to Medicare enrollees by providers that are owned or operated by the HMO or CMP or are related to the HMO or CMP by common ownership or control must be determined in accordance with the apportionment methods set forth in part 412, §§ 413.24, 413.55, and 415.55 of this chapter.
The Medicare share of the cost of covered services furnished to Medicare enrollees through arrangements with providers other than those specified in § 417.554 must be determined as follows:
(a) The Medicare share must be based on the cost the HMO or CMP pays the provider under their arrangement, to the extent that cost is reasonable and within the limits established by §§ 417.534 through 417.548.
(b) Except as specified in paragraph (c) of this section, apportionment must be on the same approved basis that is used by the provider for Medicare beneficiaries who are not Medicare enrollees of the HMO or CMP, subject to the conditions and limitations set forth in § 417.548.
(c) If, because of the special nature or terms of the HMO's or CMP's arrangement with the provider, apportionment on the basis specified in paragraph (b) of this section would result in Medicare's bearing the costs of furnishing services to individuals other than the HMO's or CMP's Medicare enrollees, apportionment must be on another basis that is approved by CMS and that will ensure that Medicare does not pay any of the cost of furnishing services to individuals who are not Medicare enrollees of the HMO or CMP.
(d) If the HMO or CMP elects to have providers reimbursed by the HMO's or CMP's Medicare intermediary, the Medicare share is the amount the intermediary paid the provider.
(a)
(b)
(c)
(a)
(1) Results in an accurate and equitable allocation of allowable costs; and
(2) Is justifiable from an administrative and cost efficiency standpoint.
(b)
(c)
(d)
(a)
(b)
(i) Facility costs.
(ii) Interest expense.
(iii) Medical record costs.
(iv) Centralized purchasing costs.
(v) Accounting and data processing costs.
(vi) Other administrative and general costs that are not included in paragraph (a) of this section.
(2) The allocation or distribution process must be as follows:
(i) If a separate entity or department of an HMO or CMP performs administrative functions the benefit of which can be quantitatively measured (such as centralized purchasing and data processing), the total allowable costs of this entity or department must be allocated or distributed to the components of the HMO or CMP in reasonable proportion to the benefits received by these components.
(ii) If a separate entity or department of an HMO or CMP performs administrative functions the benefit of which cannot be quantitatively measured (such as facility costs), the total allowable costs of this entity or department must be allocated or distributed to the components of the HMO or CMP on the basis of a ratio of total incurred and distributed costs per component to the total incurred and distributed costs for all components.
(iii) For the costs incurred under paragraphs (b)(1)(i) through (iv) of this section that include personnel costs, the organization must be able to identify the person hours expended for each administrative task and the rate of pay for those persons performing the tasks. Administrative tasks performed and rate of pay for the persons performing those tasks must match in terms of the skill level needed to accomplish those tasks. This information must be made available to CMS upon request.
(c)
(1) Donations.
(2) Fines and penalties.
(3) Political and lobbying activities.
(4) Charity or courtesy allowances.
(5) Spousal education.
(6) Entertainment.
(7) Return on equity.
(a)
(b)
(2) If CMS approves use of a different method, the HMO or CMP may not revert to another method without first obtaining CMS's approval.
(a)
(2) Unless otherwise provided for in this subpart, the HMO or CMP must follow standardized definitions and accounting, statistics, and reporting practices that are widely accepted in the health care industry.
(b)
(2) The cost data must be based on an approved method of cost finding and, except as provided in paragraph (b)(3) of this section, on the accrual method of accounting.
(3) For governmental institutions that use a cash basis of accounting, cost data developed on this basis is acceptable. However, only depreciation on capital assets, rather than the expenditure for the capital asset, is allowable.
(c)
(d)
(e)
(a)
(2) Additional lump-sum payments may be made at other times during the contract period, at CMS's discretion, to adjust the total amounts paid during the contract period to the level of incurred costs.
(b)
(c)
(1) A change in the number of Medicare enrollees that affects the per capita rate;
(2) A material variation from the costs estimated when the annual operating budget was prepared; or
(3) A significant change in the use of covered services by the HMO's or CMP's Medicare enrollees.
(d)
(a)
(b)
(1) Establish an interim per capita rate of payment on the basis of the best available data and adjust payments on the basis of that rate until the required reports are submitted and a new interim per capita rate can be established; or
(2) If there is not enough data on which to base an interim per capita
(c)
(2) CMS may reduce the frequency of the reports required under paragraph (c)(1) of this section if CMS determines that, on the basis of the HMO's or CMP's reporting experience, there is good cause to do so.
(a)
(b)
(a)
(b)
(2)
(i) The per capita costs incurred in furnishing covered services to its Medicare enrollees, determined in accordance with subpart O of this part and including—
(A) The costs incurred by entities related to the HMO or CMP by common ownership or control; and
(B) For reports for cost-reporting periods that begin on or after January 1, 1996, the costs of hospital and SNF services paid by Medicare's intermediaries under the option provided by § 417.532(d).
(ii) The HMO's or CMP's methods of apportioning cost among Medicare enrollees, and nonenrolled patients, in accordance with the payment procedures specified in this subpart (as, applicable, in parts 412 and 413 of this chapter); and
(iii) Any other information required by CMS.
(3)
(i) Consider the failure to report as evidence of likely overpayment; and
(ii) Initiate recovery of amounts previously paid, or reduce interim payments, or both.
(c)
(2) A final settlement may be made with the HMO or CMP even though a provider that is not owned or operated by the HMO or CMP or related to the HMO or CMP by common ownership or control and that provides services to the HMO's or CMP's Medicare enrollees has not had a final settlement with CMS under parts 412 and 413 of this chapter for services furnished by the provider to Medicare beneficiaries who are not enrolled in the HMO or CMP. In this situation—
(i) CMS must be satisfied that the costs of covered services furnished to the HMO's or CMP's Medicare enrollees, as shown in the reports specified in paragraph (b) of this section, are reasonable and that the interest of the Medicare program would best be served by not delaying final settlement with the HMO or CMP until there is a final settlement with the provider for services furnished to Medicare beneficiaries not enrolled in the HMO or CMP; and
(ii) Prompt settlement with the HMO or CMP would be in the best interest of the Medicare program if, for instance, the provider's costs represent an insignificant portion of total payment due to the HMO or CMP; or if CMS is satisfied that the provider's costs, as shown in the reports specified in paragraph (b) of this section, will not be modified, to any significant extent, by the final settlement with the provider under parts 412 and 413 of this chapter.
(d)
(1) Explains CMS's determination regarding total Medicare payment due the HMO or CMP for the contract period covered by the financial information specified in paragraph (b) of this section;
(2) Relates this determination to the HMO's or CMP's claimed total payable cost for that period;
(3) Explains the amounts and reasons, by appropriate reference to law, regulations, and Medicare program policy and procedures, if the determined amounts differ from the HMO's or CMP's claim; and
(4) Informs the HMO or CMP of its right to a hearing in accordance with the requirements specified in § 405.1801(b)(2) of this chapter
(e)
(2) Further payments to the HMO or CMP may be withheld or offset in order to recover, or to aid in the recovery of, any overpayment identified in the determination as having been made to the HMO or CMP, even if the HMO or CMP requests a hearing in accordance with the requirements specified in § 405.1801(b)(2) of this chapter.
(3) Any withholding continues until the earliest of the following occurs:
(i) The overpayment is liquidated.
(ii) The HMO or CMP enters into an agreement with CMS to refund the overpaid amount.
(iii) CMS, on the basis of subsequently acquired information, determines that there was no overpayment.
(iv) The decision of a hearing specified in paragraph (d)(4) of this section is that there was no overpayment.
(a)
(b)
(1) Method of payment;
(2) Procedures for determining the HMO's or CMP's payment rate; and
(3) Procedures for determining the additional benefits (and their value)
As used in this subpart—
Except in the circumstances specified in § 417.440(d) for inpatient hospital care, and as provided in § 417.585 for hospice care, CMS makes payment for covered services only to the HMO or CMP.
(a)
(b)
(2) CMS furnishes each HMO or CMP with its per capita rate of payment for each class of Medicare enrollees not later than 90 days before the beginning of the HMO's or CMP's contract period.
(c)
(d)
(e)
(a) No payment is made to an HMO or CMP on behalf of a Medicare enrollee who has elected hospice care under § 418.24 of this chapter except for the portion of the payment applicable to the additional benefits described in § 417.592. This no-payment rule is effective from the first day of the month following the month of election to receive hospice care, until the first day of the month following the month in which the enrollee resumes normal Medicare coverage.
(b) During the time the election is in effect, the HMO or CMP may bill CMS on a fee-for-service basis (subject to the usual Medicare rules of payment) but only for the following covered Medicare services:
(1) Services of the enrollee's attending physician if the physician is an employee or contractor of the HMO or CMP and is not employed by or under contract to the enrollee's hospice.
(2) Services not related to the treatment of the terminal condition for which the enrollee elected hospice care or a condition related to the terminal condition.
(3) Services furnished after the revocation or expiration of the enrollee's hospice election until the full monthly capitation payments begin again.
(c) Payment for hospice care services furnished to Medicare enrollees of an HMO or CMP is made to the Medicare-participating hospice elected by the enrollee.
(a)
(b)
(c)
(2)
(3)
(4)
(a)
(b)
(a)
(2) The dollar value of the elected option must, over the course of a contract period, be at least equal to the difference between the APCRP and the proposed ACR.
(b)
(2)
(3)
(4)
(c)
(2) The HMO or CMP may elect to provide additional benefits in any of the following forms—
(i) A reduction in the HMO's or CMP's premium or in other charges it imposes in the form of deductibles or coinsurance.
(ii) Health benefits in addition to the required Part A and Part B covered services.
(iii) A combination of reduced charges and additional benefits.
(d)
(2) An HMO or CMP that elects the option of providing additional benefits must include in its submittal—
(i) A description of the additional benefits it will provide to its Medicare enrollees; and
(ii) Supporting evidence to show that the selected benefits meet the requirements of paragraph (a)(2) of this section with respect to dollar value equivalence.
(a)
(1) Compute an initial rate in accordance with paragraph (b) of this section.
(2) Adjust and reduce the initial rate in accordance with paragraphs (c) and (d) of this section.
(b)
(i) A community rating system as defined in § 417.104(b); or
(ii) A system, approved by CMS, under which the HMO or CMP develops an aggregate premium for all its enrollees and weights the aggregate by the size of the various enrolled groups that compose its enrollment.
(2) Regardless of which method the HMO or CMP uses—
(i) The initial rate must be equal to the premium it would charge its non-Medicare enrollees for the Medicare-covered services;
(ii) The HMO or CMP must compute the rates separately for enrollees entitled to Medicare Part A and Part B and for those entitled only to Part B; and
(iii) The HMO or CMP must identify and take into account anticipated revenue from health insurance payers for those services for which Medicare is not the primary payer as provided in § 417.528.
(3) Except as provided in paragraph (b)(4) of this section, the HMO or CMP must identify in its initial rate calculation, the following components whose rates must be consistent with rates used by the HMO or CMP in calculating premiums for non-Medicare enrollees:
(i) Hospital services (services covered under Medicare Part A and Part B shown separately).
(ii) Physicians' services.
(iii) Other medical services (for example, X-ray and laboratory services).
(iv) Home health services.
(v) Out-of-plan claims for emergency services.
(vi) Skilled nursing care services.
(vii) Ambulance services.
(viii) Other Medicare covered services.
(ix) General and administrative.
(x) Noncovered Medicare services (for example, eyeglasses).
(xi) Services for which Medicare is the secondary payer.
(xii) Enrollee liabilities (for example, deductibles, coinsurance, or copayments) for covered services.
(4) An HMO or CMP that does not usually separate its premium components as described in paragraph (b)(3) of this section may calculate its initial rate with the methods it uses for its other enrolled groups if the HMO or CMP provides CMS with the documentation necessary to support any adjustments the HMO or CMP makes to the initial rate in accordance with paragraph (e) of this section.
(5) The initial rate calculation must not carry forward any losses experienced by the HMO or CMP during prior contract periods. The HMO or CMP must submit supporting documentation to assure CMS that rates do not include past losses but only premiums for the price of additional benefits and services of the upcoming contract period.
(c)
(2)
(i)
(ii)
(3)
(4)
(i) Medicare and non-Medicare enrollees in other HMOs or CMPs; or
(ii) Medicare beneficiaries (in the HMO's or CMP's area, or State, or the United States) who are eligible to enroll in an HMO or CMP and other individuals in that same area, or State, or the United States.
(d)
(e)
(2)
(ii) The request must state why the HMO or CMP believes the determination is incorrect, and include any supporting evidence the HMO or CMP considers pertinent.
(iii) A hearing officer designated by CMS conducts the hearing in accordance with the hearing procedures set forth in §§ 405.1819 through 405.1833 of this chapter.
(a)
(b)
(c)
(2)
(3)
(d)
(2) The amounts withheld in a benefit stabilization fund are accounted for by CMS in accounts in which interest does not accrue to the HMO or CMP.
(a)
(1) Indicate how it intends to use the withdrawn amounts;
(2) Justify the need for the withdrawal in terms of stabilizing the additional benefits it provides to Medicare enrollees;
(3) Document the HMO's or CMP's experience with fluctuations of revenue requirements relative to the additional benefits it provides to Medicare enrollees; and
(4) Document its experience during the contract period previous to the one for which it requests withdrawal to ensure that the HMO or CMP will not be using the withdrawn amounts to refinance losses suffered during that previous contract period.
(b)
(1) The HMO's or CMP's average of its per capita rates of payment for the next contract period is less than that of the previous contract period;
(2) The HMO's or CMP's ACR for the next contract period is significantly higher than that of the previous contract period; or
(3) The HMO's or CMP's revenue requirements for the next contract period for providing the additional benefits it provided during the previous contract period is significantly higher than the requirements for that previous period and the ACR for the next contract period results in an additional benefits package that is less in total value than that of the previous contract period.
(c)
(1) Offer without charge the supplemental services it provides to its Medicare enrollees under the provisions of § 417.440 (b)(2) or (b)(3); or
(2) Refinance prior contract period losses or to avoid losses in the upcoming contract period.
(d)
CMS's payment to an HMO or CMP may be subject to an enrollment reconciliation at least annually. CMS conducts this reconciliation as necessary to ensure that the payments made do not exceed or fall short of the appropriate per capita rate of payment for each Medicare enrollee of the HMO or CMP during the contract period. The HMO or CMP must submit any information or reports required by CMS to conduct the reconciliation.
(a)
(2) Section 1876 of the Act provides for Medicare payments to HMOs and CMPs that contract with CMS to enroll Medicare beneficiaries and furnish Medicare-covered health care services to them.
(3) Section 234 of the MMA requires section 1876 contractors to operate under the same provisions as MA plans where two plans of the same type enter the cost plan contract's service area.
(b)
(2) In applying those provisions, references to section 1852 of the Act must be read as references to section 1876 of the Act, and references to MA organizations as references to HMOs and CMPs.
(a) The rights, procedures, and requirements relating to contract determinations and appeals set forth in part 422 subpart N of this chapter also apply to Medicare contracts with HMOs or CMPs under section 1876 of the Act.
(b) In applying paragraph (a) of this section, references to part 422 of this chapter must be read as references to this part and references to MA organizations must be read as references to HMOs or CMPs.
(a)
(1) Effective January 1, 1999, (or on the effective date of the HCPP agreement in the case of a 1998 applicant) either—
(A) Is union or employer sponsored; or
(B) Does not provide, or arrange for the provision of, any inpatient hospital services.
(2) Is responsible for the organization, financing, and delivery of covered Part B services to a defined population on a prepayment basis.
(3) Meets the conditions specified in paragraph (b) of this section.
(4) Elects to be reimbursed on a reasonable cost basis.
(b)
(i) Enter into a written agreement with CMS as specified in § 417.801;
(ii) Furnish physicians' services through its employees or under a formal arrangement with a medical group, independent practice association or individual physicians; and
(iii) Furnish covered Part B services to its Medicare enrollees through institutions, entities, and persons that have qualified under the applicable requirements of title XVIII of the Social Security Act and section 353 of the PHS Act.
(2) An organization that, as of January 31, 1983, was being reimbursed on a reasonable cost basis under section 1833(a)(1)(A) of the Act, and that would not otherwise meet the conditions specified in paragraph (b)(1) of this section, may receive reimbursement on a reasonable cost basis as an HCPP, provided it files an agreement with CMS as required by § 417.801.
(c)
(2)
(ii)
(A) The actuarial value of the Part B deductible.
(B) An amount equal to 20 percent of the cost incurred for any service that is subject to the Medicare coinsurance.
(d)
(2) Covered Part B services furnished by a provider of services to an HCPP's Medicare enrollees are not payable to the HCPP. CMS makes payment for these services to the provider on behalf of the Medicare enrollee through the provider's Medicare fiscal intermediary. This requirement does not affect Medicare payment to the HCPP for physicians' services furnished to its Medicare enrollees for which the physicians are compensated by the HCPP.
(e)
(a)
(2) An existing group practice prepayment plan (GPPP) that continues as an HCPP under this subpart U must have entered into a written agreement with CMS within 60 days of January 31, 1983.
(b)
(1) Maintain compliance with the requirements for participation and reimbursement on a reasonable cost basis of HCPPs as specified in § 417.800;
(2) Not charge the Medicare enrollee or any other person for items or services for which that enrollee is entitled to have payment made under the provisions of this part, except for any deductible or coinsurance amounts for which the enrollee is liable;
(3) Refund, as promptly as possible, any money incorrectly collected as charges or premiums, or in any other way from Medicare enrollees in the HCPP in accordance with the requirements specified in § 417.456;
(4) Not impose any limitations on the acceptance of Medicare enrollees or beneficiaries for care and treatment that it does not impose on all other individuals;
(5) Meet the advance directives requirements specified in § 417.436(d) of this part;
(6) Establish administrative review procedures in accordance with §§ 417.830 through 417.840 for Medicare enrollees who are dissatisfied with denied services or claims; and
(7) Consider any additional requirements that CMS finds necessary or desirable for efficient and effective program administration.
(c)
(d)
(i) The HCPP no longer meets the requirements for participation and reimbursement as an HCPP as specified in § 417.800;
(ii) The HCPP is not in substantial compliance with the provisions of the agreement, applicable CMS regulations, or applicable provisions of the Medicare law; or
(iii) The HCPP undergoes a change in ownership as specified in subpart M of this part.
(2) CMS will give notice of termination or nonrenewal to the HCPP at least 90 days before the effective date stated in the notice.
(e)
(2) CMS may approve the termination date proposed by the HCPP, or set a different date no later than 6 months after that date. CMS makes this decision based on a finding that termination on a specific date would not—
(i) Unduly disrupt the furnishing of services to the community serviced by the HCPP; or
(ii) Otherwise interfere with the efficient administration of the Medicare program.
(a)
(b)
(2)
(i) Except as specified in paragraph (b)(2)(ii) of this section, the costs incurred by the HCPP may be considered reasonable if they—
(A) Do not exceed those that a prudent and cost-conscious buyer would incur to purchase those services; and
(B) Are comparable to costs incurred for similar services furnished by similar physicians and other suppliers in the same or a similar locality.
(ii)(A) If a physician group to whom the HCPP makes payment compensates its physicians on a fee-for-service basis, the HCPP's payment to the group may not exceed the reasonable charges for those services, as defined in subpart E of part 405 of this chapter.
(B) Payment in excess of the limits specified in paragraph (b)(2)(ii)(A) of this section is allowable if the group has procedures under which members of the group accept effective incentives, such as risk-sharing, designed to avoid unnecessary or unduly costly utilization of health services. In such cases, the amount paid by the HCPP is considered reasonable if it meets the conditions specified in paragraph (b)(2)(i) of this section.
(3)
(i) Except as specified in paragraph (b)(3)(ii) of this section, the costs incurred by the HCPP are considered reasonable if they do not exceed—
(A) The reasonable charges for those services, as defined in subpart E of part 405 of this chapter; and
(B) The amount that CMS would pay for those services if they were furnished to beneficiaries who are not enrolled in the HCPP and who receive the services from sources other than providers of services or other entities that are reimbursed on a reasonable cost basis.
(ii) Payment to a physician group organized on an individual-practice basis is not subject to the paragraph (b)(3)(i) of this section if the group pays its physicians on a fee-for-service basis and has procedures under which the members of the group accept effective incentives, such as risk-sharing, designed to avoid unnecessary or unduly costly utilization of health services. In these cases, the amount paid by an HCPP is considered reasonable if it meets the conditions specified in paragraph (b)(2)(i) of this section.
(a) The HCPP follows the cost apportionment principles specified in §§ 417.552 through 417.566, except for provisions on provider costs and provisions on departmental apportionment.
(b) The HCPP may use a method for reporting costs that is approved by CMS. CMS bases its approval on a finding that the method—
(1) Results in an accurate and equitable allocation of allowable costs; and
(2) Is justifiable from an administrative and cost efficiency standpoint.
(a) The principles specified in § 417.568 apply to HCPPs, except those in paragraph (c) of that section.
(b) The HCPP may use a method for reporting costs that is approved by CMS. CMS bases its approval on a finding that the method—
(1) Results in an accurate and equitable allocation of allowable costs; and
(2) Is justifiable from an administrative and cost efficiency standpoint.
(c) An HCPP must permit the Department and the Comptroller General to audit or inspect any books and records of the HCPP and of any related organization that pertain to the determination of amounts payable for covered Part B services furnished its Medicare enrollees. For purposes of this requirement, the principles specified in § 417.486 apply to HCPPs.
The HCPP follows the principles specified in §§ 417.570 and 417.572 on interim per capita payments, except for the following:
(a) When applying these principles to HCPPs, the term “reporting period” should be used instead of the term “contract period” contained in that section.
(b) An HCPP must submit to CMS an annual operating budget and enrollment forecast, in the form and detail specified by CMS, at least 60 days before the beginning of each reporting period. A reporting period must be 12 consecutive months, except that the HCPP's initial reporting period for participating in Medicare may be as short as 6 months or as long as 18 months.
(c) An HCPP must submit to CMS an interim cost report and enrollment data applicable to the first 6-month period of the HCPP's reporting period in the form and detail specified by CMS. The interim cost report must be submitted not later than 45 days after the close of the first 6-month period of the HCPP's reporting period.
(d) In lieu of an interim payment based on the actual monthly enrollment in an HCPP, CMS and the HCPP may agree to a uniform monthly interim reimbursement rate for a reporting period. This interim rate is based on the HCPP's budget and enrollment forecast, if CMS is satisfied that the rate is consistent with efficiency and economy, and will not result in excessive adjustment at the end of the reporting period.
(a)
(b)
(2)
(i) The HCPP's per capita incurred costs of providing covered Part B services to its Medicare enrollees during the reporting period, including any costs incurred by another organization related to the HCPP by common ownership or control;
(ii) The HCPP's methods of apportioning costs among its Medicare enrollees, enrollees who are not Medicare beneficiaries, and other nonenrollees, including Medicare beneficiaries receiving health care services on a fee-for-service or other basis; and
(iii) Information on enrollment and other data as specified by CMS.
(3)
(4)
(i) Regard the failure to report this information as evidence of likely overpayment and reduce or suspend interim payments to the HCPP; and
(ii) Determine that amounts previously paid are overpayments, and make appropriate recovery.
(c)
(1) Explains CMS's determination of total reimbursement due the HCPP for the reporting period; and
(2) Informs the HCPP of its right to have the determination reviewed at a hearing in accordance with the requirements specified in § 405.1801(b)(2) of this chapter.
(d)
(2) If the HCPP does not pay CMS within 30 days of CMS's determination of any amounts the HCPP owes CMS, CMS may offset further payments to the HCPP to recover, or to aid in the recovery of, any overpayment identified in its determination.
(3) Any offset of payments CMS makes under paragraph (d)(2) of this section will remain in effect even if the HCPP has requested a hearing in accordance with the requirements specified in § 405.1801(b)(2) of this chapter.
(e)
(2) CMS or the HCPP will make payment within 30 days of CMS's determination under the tentative settlement of any estimated amounts due.
(3) The tentative settlement is subject to adjustment at the time of a final settlement.
Sections 417.832 through 417.840 establish procedures for the presentation and resolution of organization determinations, reconsiderations, hearings, Departmental Appeals Board review, court reviews, and finality of decisions that are applicable to Medicare enrollees of an HCPP.
(a) The administrative review rights and procedures specified in §§ 417.834 through 417.840 pertain to disputes involving an organization determination, as defined in § 417.838, with which the enrollee is dissatisfied.
(b) Physicians and other individuals who furnish items or services under arrangements with an HCPP have no right of administrative review under §§ 417.834 through 417.840.
(c) The provisions of part 405 dealing with the representation of parties apply to organization determinations and appeals.
(d) The provisions of part 405 dealing with administrative law judge hearings, Medicare Appeals Council review, and judicial review are applicable, unless otherwise provided.
The HCPP is responsible for establishing and maintaining the administrative review procedures that are specified in §§ 417.830 through 417.840.
Each HCPP is responsible for ensuring that all Medicare enrollees are informed in writing of the administrative review procedures that are available to them.
(a)
(b)
(1) A determination regarding services that were furnished by the HCPP, either directly or under arrangement, for which the enrollee has no further obligation for payment.
(2) A determination regarding services that are not covered under the HCPP's agreement with CMS.
The HCPP must apply § 422.568 through § 422.626 of this chapter to—
(a) Organization determinations and fast-track appeals that affect its Medicare enrollees; and
(b) Reconsiderations, hearings, Medicare Appeals Council review, and judicial review of the organization determinations and fast-track appeals specified in paragraph (a) of this section.
The regulations in this subpart apply, as appropriate, to public and private entities that have loans or loan guarantees that—
(a) Were awarded to them before October 1986 under section 1304 or section 1305 of the PHS Act; and
(b) Are still outstanding.
As used in this subpart—
(1) The addition of any health service not previously provided by or through the HMO, that requires an increase in the facilities, equipment, or health professionals of the HMO; or
(2) The improvement or upgrading of existing facilities or equipment, or an increase in the number of categories of health professionals, of the HMO so that the HMO could provide directly services that it previously provided through contract or referral or which it could not previously provide with its existing facilities or equipment.
(1) Under generally accepted accounting principles or under accounting practices prescribed or permitted by State regulatory authority, was not a capital cost.
(2) Was required by State regulatory authority to meet reserves or tangible net equity requirements.
(3) Was for a payment made to reduce balance sheet liabilities existing at the beginning of the 60-month period, but only if—
(i) The payment had been approved in writing by the Secretary; and
(ii) The total of these payments did not exceed 20 percent of the amount of the loan.
(4) Was for a small capital expenditure, but only if—
(i) The cost had been approved in writing by the Secretary; and
(ii) The total of these costs did not exceed $200,000 in any 12-month period, and $400,000 during the first 60 months of operation or expansion.
(1) A planned substantial increase in the enrollment of the HMO, that requires an increase in the number of health professionals serving enrollees of the HMO or an expansion of the physical capacity of the HMO's total health facilities; or
(2) A planned expansion of the service area beyond the current service area, that would be made possible by the addition of health service delivery facilities and health professionals to serve enrollees at a new site or sites in areas previously without service sites.
(1) Equipment as defined in 45 CFR 74.132; or
(2) Alterations and renovations required to change the interior arrangements or other physical characteristics of an existing facility or installed equipment, so that it may be more effectively used for its currently designated purpose, or adapted to a changed use.
(a) Under section 1304 of the PHS Act, grants and loan guarantees were awarded for projects for planning and initial development of HMOs.
(b) Planning projects included projects for any of the following:
(1) Establishment of an HMO.
(2) Significant expansion of the HMO's enrollment or geographic area.
(c) Initial development projects included projects for any of the following:
(1) Establishment of an HMO.
(2) Significant expansion of the HMO's enrollment or geographic area.
(3) Expansion of the range or amount of services furnished by the HMO.
Under section 1305 of the PHS, loans and loan guarantees were awarded for initial costs of operation of HMOs.
(a)
(1) When the HMO's revenues and costs of operation reached the break-even point.
(2) At the end of the 60-month period following the Secretary's endorsement of the loan or loan guarantee.
(b)
(a)
(b)
(c)
The provisions of § 417.163(g) apply to entities that have outstanding loans or loan guarantees administered under this subpart.
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
This part implements section 1861(dd) of the Social Security Act (the Act). Section 1861(dd) of the Act specifies services covered as hospice care and the conditions that a hospice program must meet in order to participate in the Medicare program. Section 1861(dd) also specifies limitations on coverage of, and payment for, inpatient hospice care. The following sections of the Act are also pertinent:
(a) Sections 1812(a) (4) and (d) of the Act specify eligibility requirements for the individual and the benefit periods.
(b) Section 1813(a)(4) of the Act specifies coinsurance amounts.
(c) Sections 1814(a)(7) and 1814(i) of the Act contain conditions and limitations on coverage of, and payment for, hospice care.
(d) Sections 1862(a) (1), (6) and (9) of the Act establish limits on hospice coverage.
Subpart A of this part sets forth the statutory basis and scope and defines terms used in this part. Subpart B specifies the eligibility and election requirements and the benefit periods. Subparts C and D specify the conditions of participation for hospices. Subpart E is reserved for future use. Subparts F and G specify coverage and payment policy. Subpart H specifies coinsurance amounts applicable to hospice care.
For purposes of this part—
(1)(i) Doctor of medicine or osteopathy legally authorized to practice medicine and surgery by the State in which he or she performs that function or action; or
(ii) Nurse practitioner who meets the training, education, and experience requirements as described in § 410.75 (b) of this chapter.
(2) Is identified by the individual, at the time he or she elects to receive hospice care, as having the most significant role in the determination and delivery of the individual's medical care.
(2) A drug or medication when it is used as a restriction to manage the patient's behavior or restrict the patient's freedom of movement and is not a standard treatment or dosage for the patient's condition.
In order to be eligible to elect hospice care under Medicare, an individual must be—
(a) Entitled to Part A of Medicare; and
(b) Certified as being terminally ill in accordance with § 418.22.
(a) Subject to the conditions set forth in this part, an individual may elect to receive hospice care during one or more of the following election periods:
(1) An initial 90-day period;
(2) A subsequent 90-day period; or
(3) An unlimited number of subsequent 60-day periods.
(b) The periods of care are available in the order listed and may be elected separately at different times.
(a)
(2)
(3)
(ii) Certifications may be completed no more than 15 calendar days prior to the effective date of election.
(iii) Recertifications may be completed no more than 15 calendar days prior to the start of the subsequent benefit period.
(4)
(b)
(1) The certification must specify that the individual's prognosis is for a life expectancy of 6 months or less if the terminal illness runs its normal course.
(2) Clinical information and other documentation that support the medical prognosis must accompany the certification and must be filed in the medical record with the written certification as set forth in paragraph (d)(2) of this section. Initially, the clinical information may be provided verbally, and must be documented in the medical record and included as part of the hospice's eligibility assessment.
(3) The physician must include a brief narrative explanation of the clinical findings that supports a life expectancy of 6 months or less as part of the certification and recertification forms, or as an addendum to the certification and recertification forms.
(i) If the narrative is part of the certification or recertification form, then the narrative must be located immediately prior to the physician's signature.
(ii) If the narrative exists as an addendum to the certification or recertification form, in addition to the physician's signature on the certification or recertification form, the physician must also sign immediately following the narrative in the addendum.
(iii) The narrative shall include a statement directly above the physician signature attesting that by signing, the physician confirms that he/she composed the narrative based on his/her review of the patient's medical record or, if applicable, his/her examination of the patient.
(iv) The narrative must reflect the patient's individual clinical circumstances and cannot contain check boxes or standard language used for all patients.
(v) The narrative associated with the 3rd benefit period recertification and
(4) The physician or nurse practitioner who performs the face-to-face encounter with the patient described in paragraph (a)(4) of this section must attest in writing that he or she had a face-to-face encounter with the patient, including the date of that visit. The attestation of the nurse practitioner or a non-certifying hospice physician shall state that the clinical findings of that visit were provided to the certifying physician for use in determining continued eligibility for hospice care.
(5) All certifications and recertifications must be signed and dated by the physician(s), and must include the benefit period dates to which the certification or recertification applies.
(c)
(i) The medical director of the hospice or the physician member of the hospice interdisciplinary group; and
(ii) The individual's attending physician, if the individual has an attending physician. The attending physician must meet the definition of physician specified in § 410.20 of this subchapter.
(2) For subsequent periods, the only requirement is certification by one of the physicians listed in paragraph (c)(1)(i) of this section.
(d)
(1) Make an appropriate entry in the patient's medical record as soon as they receive an oral certification; and
(2) File written certifications in the medical record.
(a)
(b)
(1) Identification of the particular hospice that will provide care to the individual.
(2) The individual's or representative's acknowledgement that he or she has been given a full understanding of the palliative rather than curative nature of hospice care, as it relates to the individual's terminal illness.
(3) Acknowledgement that certain Medicare services, as set forth in paragraph (d) of this section, are waived by the election.
(4) The effective date of the election, which may be the first day of hospice care or a later date, but may be no earlier than the date of the election statement.
(5) The signature of the individual or representative.
(c)
(1) Remains in the care of a hospice;
(2) Does not revoke the election; and
(3) Is not discharged from the hospice under the provisions of § 418.26.
(d)
(1) Hospice care provided by a hospice other than the hospice designated by the individual (unless provided under arrangements made by the designated hospice).
(2) Any Medicare services that are related to the treatment of the terminal condition for which hospice care was elected or a related condition or that are equivalent to hospice care except for services—
(i) Provided by the designated hospice:
(ii) Provided by another hospice under arrangements made by the designated hospice; and
(iii) Provided by the individual's attending physician if that physician is not an employee of the designated hospice or receiving compensation from the hospice for those services.
(e)
(a) The hospice admits a patient only on the recommendation of the medical director in consultation with, or with input from, the patient's attending physician (if any).
(b) In reaching a decision to certify that the patient is terminally ill, the hospice medical director must consider at least the following information:
(1) Diagnosis of the terminal condition of the patient.
(2) Other health conditions, whether related or unrelated to the terminal condition.
(3) Current clinically relevant information supporting all diagnoses.
(a)
(1) The patient moves out of the hospice's service area or transfers to another hospice;
(2) The hospice determines that the patient is no longer terminally ill; or
(3) The hospice determines, under a policy set by the hospice for the purpose of addressing discharge for cause that meets the requirements of paragraphs (a)(3)(i) through (a)(3)(iv) of this section, that the patient's (or other persons in the patient's home) behavior is disruptive, abusive, or uncooperative to the extent that delivery of care to the patient or the ability of the hospice to operate effectively is seriously impaired. The hospice must do the following before it seeks to discharge a patient for cause:
(i) Advise the patient that a discharge for cause is being considered;
(ii) Make a serious effort to resolve the problem(s) presented by the patient's behavior or situation;
(iii) Ascertain that the patient's proposed discharge is not due to the patient's use of necessary hospice services; and
(iv) Document the problem(s) and efforts made to resolve the problem(s) and enter this documentation into its medical records.
(b)
(c)
(1) Is no longer covered under Medicare for hospice care;
(2) Resumes Medicare coverage of the benefits waived under § 418.24(d); and
(3) May at any time elect to receive hospice care if he or she is again eligible to receive the benefit.
(d)
(2) The discharge planning process must include planning for any necessary family counseling, patient education, or other services before the patient is discharged because he or she is no longer terminally ill.
(a) An individual or representative may revoke the individual's election of hospice care at any time during an election period.
(b) To revoke the election of hospice care, the individual or representative
(1) A signed statement that the individual or representative revokes the individual's election for Medicare coverage of hospice care for the remainder of that election period.
(2) The date that the revocation is to be effective. (An individual or representative may not designate an effective date earlier than the date that the revocation is made).
(c) An individual, upon revocation of the election of Medicare coverage of hospice care for a particular election period—
(1) Is no longer covered under Medicare for hospice care;
(2) Resumes Medicare coverage of the benefits waived under § 418.24(e)(2); and
(3) May at any time elect to receive hospice coverage for any other hospice election periods that he or she is eligible to receive.
(a) An individual or representative may change, once in each election period, the designation of the particular hospice from which hospice care will be received.
(b) The change of the designated hospice is not a revocation of the election for the period in which it is made.
(c) To change the designation of hospice programs, the individual or representative must file, with the hospice from which care has been received and with the newly designated hospice, a statement that includes the following information:
(1) The name of the hospice from which the individual has received care and the name of the hospice from which he or she plans to receive care.
(2) The date the change is to be effective.
The patient has the right to be informed of his or her rights, and the hospice must protect and promote the exercise of these rights.
(a)
(2) The hospice must comply with the requirements of subpart I of part 489 of this chapter regarding advance directives. The hospice must inform and distribute written information to the patient concerning its policies on advance directives, including a description of applicable State law.
(3) The hospice must obtain the patient's or representative's signature confirming that he or she has received a copy of the notice of rights and responsibilities.
(b)
(i) To exercise his or her rights as a patient of the hospice;
(ii) To have his or her property and person treated with respect;
(iii) To voice grievances regarding treatment or care that is (or fails to be) furnished and the lack of respect for property by anyone who is furnishing services on behalf of the hospice; and
(iv) To not be subjected to discrimination or reprisal for exercising his or her rights.
(2) If a patient has been adjudged incompetent under state law by a court of proper jurisdiction, the rights of the patient are exercised by the person appointed pursuant to state law to act on the patient's behalf.
(3) If a state court has not adjudged a patient incompetent, any legal representative designated by the patient in accordance with state law may exercise the patient's rights to the extent allowed by state law.
(4) The hospice must:
(i) Ensure that all alleged violations involving mistreatment, neglect, or
(ii) Immediately investigate all alleged violations involving anyone furnishing services on behalf of the hospice and immediately take action to prevent further potential violations while the alleged violation is being verified. Investigations and/or documentation of all alleged violations must be conducted in accordance with established procedures;
(iii) Take appropriate corrective action in accordance with state law if the alleged violation is verified by the hospice administration or an outside body having jurisdiction, such as the State survey agency or local law enforcement agency; and
(iv) Ensure that verified violations are reported to State and local bodies having jurisdiction (including to the State survey and certification agency) within 5 working days of becoming aware of the violation.
(c)
(1) Receive effective pain management and symptom control from the hospice for conditions related to the terminal illness;
(2) Be involved in developing his or her hospice plan of care;
(3) Refuse care or treatment;
(4) Choose his or her attending physician;
(5) Have a confidential clinical record. Access to or release of patient information and clinical records is permitted in accordance with 45 CFR parts 160 and 164.
(6) Be free from mistreatment, neglect, or verbal, mental, sexual, and physical abuse, including injuries of unknown source, and misappropriation of patient property;
(7) Receive information about the services covered under the hospice benefit;
(8) Receive information about the scope of services that the hospice will provide and specific limitations on those services.
The hospice must conduct and document in writing a patient-specific comprehensive assessment that identifies the patient's need for hospice care and services, and the patient's need for physical, psychosocial, emotional, and spiritual care. This assessment includes all areas of hospice care related to the palliation and management of the terminal illness and related conditions.
(a)
(b)
(c)
(1) The nature and condition causing admission (including the presence or lack of objective data and subjective complaints).
(2) Complications and risk factors that affect care planning.
(3) Functional status, including the patient's ability to understand and participate in his or her own care.
(4) Imminence of death.
(5) Severity of symptoms.
(6)
(i) Effectiveness of drug therapy.
(ii) Drug side effects.
(iii) Actual or potential drug interactions.
(iv) Duplicate drug therapy.
(v) Drug therapy currently associated with laboratory monitoring.
(7)
(8) The need for referrals and further evaluation by appropriate health professionals.
(d)
(e)
(2) The data elements must be an integral part of the comprehensive assessment and must be documented in a systematic and retrievable way for each patient. The data elements for each patient must be used in individual patient care planning and in the coordination of services, and must be used in the aggregate for the hospice's quality assessment and performance improvement program.
The hospice must designate an interdisciplinary group or groups as specified in paragraph (a) of this section which, in consultation with the patient's attending physician, must prepare a written plan of care for each patient. The plan of care must specify the hospice care and services necessary to meet the patient and family-specific needs identified in the comprehensive assessment as such needs relate to the terminal illness and related conditions.
(a)
(i) A doctor of medicine or osteopathy (who is an employee or under contract with the hospice).
(ii) A registered nurse.
(iii) A social worker.
(iv) A pastoral or other counselor.
(2) If the hospice has more than one interdisciplinary group, it must identify a specifically designated interdisciplinary group to establish policies governing the day-to-day provision of hospice care and services.
(b)
(c)
(1) Interventions to manage pain and symptoms.
(2) A detailed statement of the scope and frequency of services necessary to meet the specific patient and family needs.
(3) Measurable outcomes anticipated from implementing and coordinating the plan of care.
(4) Drugs and treatment necessary to meet the needs of the patient.
(5) Medical supplies and appliances necessary to meet the needs of the patient.
(6) The interdisciplinary group's documentation of the patient's or representative's level of understanding, involvement, and agreement with the plan of care, in accordance with the hospice's own policies, in the clinical record.
(d)
(e)
(1) Ensure that the interdisciplinary group maintains responsibility for directing, coordinating, and supervising the care and services provided.
(2) Ensure that the care and services are provided in accordance with the plan of care.
(3) Ensure that the care and services provided are based on all assessments of the patient and family needs.
(4) Provide for and ensure the ongoing sharing of information between all disciplines providing care and services in all settings, whether the care and services are provided directly or under arrangement.
(5) Provide for an ongoing sharing of information with other non-hospice healthcare providers furnishing services unrelated to the terminal illness and related conditions.
The hospice must develop, implement, and maintain an effective, ongoing, hospice-wide data-driven quality assessment and performance improvement program. The hospice's governing body must ensure that the program: Reflects the complexity of its organization and services; involves all hospice services (including those services furnished under contract or arrangement); focuses on indicators related to improved palliative outcomes; and takes actions to demonstrate improvement in hospice performance. The hospice must maintain documentary evidence of its quality assessment and performance improvement program and be able to demonstrate its operation to CMS.
(a)
(2) The hospice must measure, analyze, and track quality indicators, including adverse patient events, and other aspects of performance that enable the hospice to assess processes of care, hospice services, and operations.
(b)
(2) The hospice must use the data collected to do the following:
(i) Monitor the effectiveness and safety of services and quality of care.
(ii) Identify opportunities and priorities for improvement.
(3) The frequency and detail of the data collection must be approved by the hospice's governing body.
(c)
(i) Focus on high risk, high volume, or problem-prone areas.
(ii) Consider incidence, prevalence, and severity of problems in those areas.
(iii) Affect palliative outcomes, patient safety, and quality of care.
(2) Performance improvement activities must track adverse patient events, analyze their causes, and implement preventive actions and mechanisms that include feedback and learning throughout the hospice.
(3) The hospice must take actions aimed at performance improvement and, after implementing those actions, the hospice must measure its success and track performance to ensure that improvements are sustained.
(d)
(1) The number and scope of distinct performance improvement projects conducted annually, based on the needs of the hospice's population and internal organizational needs, must reflect the scope, complexity, and past performance of the hospice's services and operations.
(2) The hospice must document what performance improvement projects are being conducted, the reasons for conducting these projects, and the measurable progress achieved on these projects.
(e)
(1) That an ongoing program for quality improvement and patient safety is defined, implemented, and maintained, and is evaluated annually.
(2) That the hospice-wide quality assessment and performance improvement efforts address priorities for improved quality of care and patient safety, and that all improvement actions are evaluated for effectiveness.
(3) That one or more individual(s) who are responsible for operating the quality assessment and performance improvement program are designated.
The hospice must maintain and document an effective infection control program that protects patients, families, visitors, and hospice personnel by preventing and controlling infections and communicable diseases.
(a)
(b)
(1) Is an integral part of the hospice's quality assessment and performance improvement program; and
(2) Includes the following:
(i) A method of identifying infectious and communicable disease problems; and
(ii) A plan for implementing the appropriate actions that are expected to result in improvement and disease prevention.
(c)
(a) Licensed professional services provided directly or under arrangement must be authorized, delivered, and supervised only by health care professionals who meet the appropriate
(b) Licensed professionals must actively participate in the coordination of all aspects of the patient's hospice care, in accordance with current professional standards and practice, including participating in ongoing interdisciplinary comprehensive assessments, developing and evaluating the plan of care, and contributing to patient and family counseling and education; and
(c) Licensed professionals must participate in the hospice's quality assessment and performance improvement program and hospice sponsored in-service training.
A hospice must routinely provide substantially all core services directly by hospice employees. These services must be provided in a manner consistent with acceptable standards of practice. These services include nursing services, medical social services, and counseling. The hospice may contract for physician services as specified in paragraph (a) of this section. A hospice may use contracted staff, if necessary, to supplement hospice employees in order to meet the needs of patients under extraordinary or other non-routine circumstances. A hospice may also enter into a written arrangement with another Medicare certified hospice program for the provision of core services to supplement hospice employee/staff to meet the needs of patients. Circumstances under which a hospice may enter into a written arrangement for the provision of core services include: Unanticipated periods of high patient loads, staffing shortages due to illness or other short-term temporary situations that interrupt patient care; and temporary travel of a patient outside of the hospice's service area.
(a)
(1) All physician employees and those under contract, must function under the supervision of the hospice medical director.
(2) All physician employees and those under contract shall meet this requirement by either providing the services directly or through coordinating patient care with the attending physician.
(3) If the attending physician is unavailable, the medical director, contracted physician, and/or hospice physician employee is responsible for meeting the medical needs of the patient.
(b)
(2) If State law permits registered nurses to see, treat, and write orders for patients, then registered nurses may provide services to beneficiaries receiving hospice care.
(3) Highly specialized nursing services that are provided so infrequently that the provision of such services by direct hospice employees would be impracticable and prohibitively expensive, may be provided under contract.
(c)
(d)
(1)
(i) Have an organized program for the provision of bereavement services furnished under the supervision of a qualified professional with experience or education in grief or loss counseling.
(ii) Make bereavement services available to the family and other individuals in the bereavement plan of care up to 1 year following the death of the patient. Bereavement counseling also extends to residents of a SNF/NF or ICF/MR when appropriate and identified in the bereavement plan of care.
(iii) Ensure that bereavement services reflect the needs of the bereaved.
(iv) Develop a bereavement plan of care that notes the kind of bereavement services to be offered and the frequency of service delivery. A special coverage provision for bereavement counseling is specified in § 418.204(c).
(2)
(3)
(i) Provide an assessment of the patient's and family's spiritual needs.
(ii) Provide spiritual counseling to meet these needs in accordance with the patient's and family's acceptance of this service, and in a manner consistent with patient and family beliefs and desires.
(iii) Make all reasonable efforts to facilitate visits by local clergy, pastoral counselors, or other individuals who can support the patient's spiritual needs to the best of its ability.
(iv) Advise the patient and family of this service.
(a) CMS may waive the requirement in § 418.64(b) that a hospice provide nursing services directly, if the hospice is located in a non-urbanized area. The location of a hospice that operates in several areas is considered to be the location of its central office. The hospice must provide evidence to CMS that it has made a good faith effort to hire a sufficient number of nurses to provide services. CMS may waive the requirement that nursing services be furnished by employees based on the following criteria:
(1) The location of the hospice's central office is in a non-urbanized area as determined by the Bureau of the Census.
(2) There is evidence that a hospice was operational on or before January 1, 1983 including the following:
(i) Proof that the organization was established to provide hospice services on or before January 1, 1983.
(ii) Evidence that hospice-type services were furnished to patients on or before January 1, 1983.
(iii) Evidence that hospice care was a discrete activity rather than an aspect of another type of provider's patient care program on or before January 1, 1983.
(3) By virtue of the following evidence that a hospice made a good faith effort to hire nurses:
(i) Copies of advertisements in local newspapers that demonstrate recruitment efforts.
(ii) Job descriptions for nurse employees.
(iii) Evidence that salary and benefits are competitive for the area.
(iv) Evidence of any other recruiting activities (for example, recruiting efforts at health fairs and contacts with nurses at other providers in the area).
(b) Any waiver request is deemed to be granted unless it is denied within 60 days after it is received.
(c) Waivers will remain effective for 1 year at a time from the date of the request.
(d) If a hospice wishes to receive a 1-year extension, it must submit a request to CMS before the expiration of the waiver period, and certify that the conditions under which it originally requested the initial waiver have not changed since the initial waiver was granted.
A hospice must ensure that the services described in § 418.72 through § 418.78 are provided directly by the hospice or
Physical therapy services, occupational therapy services, and speech-language pathology services must be available, and when provided, offered in a manner consistent with accepted standards of practice.
(a) A hospice located in a non-urbanized area may submit a written request for a waiver of the requirement for providing physical therapy, occupational therapy, speech-language pathology, and dietary counseling services. The hospice may seek a waiver of the requirement that it make physical therapy, occupational therapy, speech-language pathology, and dietary counseling services (as needed) available on a 24-hour basis. The hospice may also seek a waiver of the requirement that it provide dietary counseling directly. The hospice must provide evidence that it has made a good faith effort to meet the requirements for these services before it seeks a waiver. CMS may approve a waiver application on the basis of the following criteria:
(1) The hospice is located in a non-urbanized area as determined by the Bureau of the Census.
(2) The hospice provides evidence that it had made a good faith effort to make available physical therapy, occupational therapy, speech-language pathology, and dietary counseling services on a 24-hour basis and/or to hire a dietary counselor to furnish services directly. This evidence must include the following:
(i) Copies of advertisements in local newspapers that demonstrate recruitment efforts.
(ii) Physical therapy, occupational therapy, speech-language pathology, and dietary counselor job descriptions.
(iii) Evidence that salary and benefits are competitive for the area.
(iv) Evidence of any other recruiting activities (for example, recruiting efforts at health fairs and contact discussions with physical therapy, occupational therapy, speech-language pathology, and dietary counseling service providers in the area).
(b) Any waiver request is deemed to be granted unless it is denied within 60 days after it is received.
(c) An initial waiver will remain effective for 1 year at a time from the date of the request.
(d) If a hospice wishes to receive a 1-year extension, it must submit a request to CMS before the expiration of the waiver period and certify that conditions under which it originally requested the waiver have not changed since the initial waiver was granted.
All hospice aide services must be provided by individuals who meet the personnel requirements specified in paragraph (a) of this section. Homemaker services must be provided by individuals who meet the personnel requirements specified in paragraph (j) of this section.
(a)
(i) A training program and competency evaluation as specified in paragraphs (b) and (c) of this section respectively.
(ii) A competency evaluation program that meets the requirements of paragraph (c) of this section.
(iii) A nurse aide training and competency evaluation program approved by the State as meeting the requirements of § 483.151 through § 483.154 of this chapter, and is currently listed in good standing on the State nurse aide registry.
(iv) A State licensure program that meets the requirements of paragraphs (b) and (c) of this section.
(2) A hospice aide is not considered to have completed a program, as specified in paragraph (a)(1) of this section, if,
(b)
(2) A minimum of 16 hours of classroom training must precede a minimum of l6 hours of supervised practical training as part of the 75 hours.
(3) A hospice aide training program must address each of the following subject areas:
(i) Communication skills, including the ability to read, write, and verbally report clinical information to patients, care givers, and other hospice staff.
(ii) Observation, reporting, and documentation of patient status and the care or service furnished.
(iii) Reading and recording temperature, pulse, and respiration.
(iv) Basic infection control procedures.
(v) Basic elements of body functioning and changes in body function that must be reported to an aide's supervisor.
(vi) Maintenance of a clean, safe, and healthy environment.
(vii) Recognizing emergencies and the knowledge of emergency procedures and their application.
(viii) The physical, emotional, and developmental needs of and ways to work with the populations served by the hospice, including the need for respect for the patient, his or her privacy, and his or her property.
(ix) Appropriate and safe techniques in performing personal hygiene and grooming tasks, including items on the following basic checklist:
(A) Bed bath.
(B) Sponge, tub, and shower bath.
(C) Hair shampoo (sink, tub, and bed).
(D) Nail and skin care.
(E) Oral hygiene.
(F) Toileting and elimination.
(x) Safe transfer techniques and ambulation.
(xi) Normal range of motion and positioning.
(xii) Adequate nutrition and fluid intake.
(xiii) Any other task that the hospice may choose to have an aide perform. The hospice is responsible for training hospice aides, as needed, for skills not covered in the basic checklist, as described in paragraph (b)(3)(ix) of this section.
(4) The hospice must maintain documentation that demonstrates that the requirements of this standard are met.
(c)
(1) The competency evaluation must address each of the subjects listed in paragraph (b)(3) of this section. Subject areas specified under paragraphs (b)(3)(i), (b)(3)(iii), (b)(3)(ix), (b)(3)(x) and (b)(3)(xi) of this section must be evaluated by observing an aide's performance of the task with a patient. The remaining subject areas may be evaluated through written examination, oral examination, or after observation of a hospice aide with a patient.
(2) A hospice aide competency evaluation program may be offered by any organization, except as described in paragraph (f) of this section.
(3) The competency evaluation must be performed by a registered nurse in consultation with other skilled professionals, as appropriate.
(4) A hospice aide is not considered competent in any task for which he or she is evaluated as unsatisfactory. An aide must not perform that task without direct supervision by a registered nurse until after he or she has received
(5) The hospice must maintain documentation that demonstrates the requirements of this standard are being met.
(d)
(1) In-service training may be offered by any organization, and must be supervised by a registered nurse.
(2) The hospice must maintain documentation that demonstrates the requirements of this standard are met.
(e)
(f)
(1) Had been out of compliance with the requirements of § 484.36(a) and § 484.36 (b) of this chapter.
(2) Permitted an individual that does not meet the definition of a “qualified home health aide” as specified in § 484.36(a) of this chapter to furnish home health aide services (with the exception of licensed health professionals and volunteers).
(3) Had been subjected to an extended (or partial extended) survey as a result of having been found to have furnished substandard care (or for other reasons at the discretion of CMS or the State).
(4) Had been assessed a civil monetary penalty of $5,000 or more as an intermediate sanction.
(5) Had been found by CMS to have compliance deficiencies that endangered the health and safety of the home health agency's patients and had temporary management appointed to oversee the management of the home health agency.
(6) Had all or part of its Medicare payments suspended.
(7) Had been found by CMS or the State under any Federal or State law to have:
(i) Had its participation in the Medicare program terminated.
(ii) Been assessed a penalty of $5,000 or more for deficiencies in Federal or State standards for home health agencies.
(iii) Been subjected to a suspension of Medicare payments to which it otherwise would have been entitled.
(iv) Operated under temporary management that was appointed by a governmental authority to oversee the operation of the home health agency and to ensure the health and safety of the home health agency's patients.
(v) Been closed by CMS or the State, or had its patients transferred by the State.
(g)
(2) A hospice aide provides services that are:
(i) Ordered by the interdisciplinary group.
(ii) Included in the plan of care.
(iii) Permitted to be performed under State law by such hospice aide.
(iv) Consistent with the hospice aide training.
(3) The duties of a hospice aide include the following:
(i) The provision of hands-on personal care.
(ii) The performance of simple procedures as an extension of therapy or nursing services.
(iii) Assistance in ambulation or exercises.
(iv) Assistance in administering medications that are ordinarily self-administered.
(4) Hospice aides must report changes in the patient's medical, nursing, rehabilitative, and social needs to a registered nurse, as the changes relate to the plan of care and quality assessment and improvement activities. Hospice aides must also complete appropriate records in compliance with the hospice's policies and procedures.
(h)
(i) No less frequently than every 14 days to assess the quality of care and services provided by the hospice aide and to ensure that services ordered by the hospice interdisciplinary group meet the patient's needs. The hospice aide does not have to be present during this visit.
(ii) If an area of concern is noted by the supervising nurse, then the hospice must make an on-site visit to the location where the patient is receiving care in order to observe and assess the aide while he or she is performing care.
(iii) If an area of concern is verified by the hospice during the on-site visit, then the hospice must conduct, and the hospice aide must complete a competency evaluation in accordance with § 418.76(c).
(2) A registered nurse must make an annual on-site visit to the location where a patient is receiving care in order to observe and assess each aide while he or she is performing care.
(3) The supervising nurse must assess an aide's ability to demonstrate initial and continued satisfactory performance in meeting outcome criteria that include, but is not limited to—
(i) Following the patient's plan of care for completion of tasks assigned to the hospice aide by the registered nurse.
(ii) Creating successful interpersonal relationships with the patient and family.
(iii) Demonstrating competency with assigned tasks.
(iv) Complying with infection control policies and procedures.
(v) Reporting changes in the patient's condition.
(i)
(1) Before the individual may furnish personal care services, the individual must be found competent by the State (if regulated by the State) to furnish those services. The individual only needs to demonstrate competency in the services the individual is required to furnish.
(2) Services under the Medicaid personal care benefit may be used to the extent that the hospice would routinely use the services of a hospice patient's family in implementing a patient's plan of care.
(3) The hospice must coordinate its hospice aide and homemaker services with the Medicaid personal care benefit to ensure the patient receives the hospice aide and homemaker services he or she needs.
(j)
(1) An individual who meets the standards in § 418.202(g) and has successfully completed hospice orientation addressing the needs and concerns of patients and families coping with a terminal illness; or
(2) A hospice aide as described in § 418.76.
(k)
(2) Instructions for homemaker duties must be prepared by a member of the interdisciplinary group.
(3) Homemakers must report all concerns about the patient or family to the member of the interdisciplinary group who is coordinating homemaker services.
The hospice must use volunteers to the extent specified in paragraph (e) of this section. These volunteers must be
(a)
(b)
(c)
(d)
(1) The identification of each position that is occupied by a volunteer.
(2) The work time spent by volunteers occupying those positions.
(3) Estimates of the dollar costs that the hospice would have incurred if paid employees occupied the positions identified in paragraph (d)(1) of this section for the amount of time specified in paragraph (d)(2) of this section.
(e)
The hospice must organize, manage, and administer its resources to provide the hospice care and services to patients, caregivers and families necessary for the palliation and management of the terminal illness and related conditions.
(a)
(1) Optimizes comfort and dignity; and
(2) Is consistent with patient and family needs and goals, with patient needs and goals as priority.
(b)
(c)
(i) Nursing services.
(ii) Medical social services.
(iii) Physician services.
(iv) Counseling services, including spiritual counseling, dietary counseling, and bereavement counseling.
(v) Hospice aide, volunteer, and homemaker services.
(vi) Physical therapy, occupational therapy, and speech-language pathology services.
(vii) Short-term inpatient care.
(viii) Medical supplies (including drugs and biologicals) and medical appliances.
(2) Nursing services, physician services, and drugs and biologicals (as specified in § 418.106) must be made routinely available on a 24-hour basis 7 days a week. Other covered services must be available on a 24-hour basis when reasonable and necessary to meet the needs of the patient and family.
(d)
(e)
(1) Authorized by the hospice;
(2) Furnished in a safe and effective manner by qualified personnel; and
(3) Delivered in accordance with the patient's plan of care.
(f)
(1) Medicare approval.
(i) All hospice multiple locations must be approved by Medicare before providing hospice care and services to Medicare patients.
(ii) The multiple location must be part of the hospice and must share administration, supervision, and services with the hospice issued the certification number.
(iii) The lines of authority and professional and administrative control must be clearly delineated in the hospice's organizational structure and in practice, and must be traced to the location which was issued the certification number.
(iv) The determination that a multiple location does or does not meet the definition of a multiple location, as set forth in this part, is an initial determination, as set forth in § 498.3.
(2) The hospice must continually monitor and manage all services provided at all of its locations to ensure that services are delivered in a safe and effective manner and to ensure that each patient and family receives the necessary care and services outlined in the plan of care, in accordance with the requirements of this subpart and subparts A and C of this section.
(g)
(2) A hospice must provide an initial orientation for each employee that addresses the employee's specific job duties.
(3) A hospice must assess the skills and competence of all individuals furnishing care, including volunteers furnishing services, and, as necessary, provide in-service training and education programs where required. The hospice must have written policies and procedures describing its method(s) of assessment of competency and maintain a written description of the in-service training provided during the previous 12 months.
The hospice must designate a physician to serve as medical director. The medical director must be a doctor of medicine or osteopathy who is an employee, or is under contract with the hospice. When the medical director is not available, a physician designated by the hospice assumes the same responsibilities and obligations as the medical director.
(a)
(i) A self-employed physician; or
(ii) A physician employed by a professional entity or physicians group. When contracting for medical director services, the contract must specify the physician who assumes the medical director responsibilities and obligations.
(b)
(1) The primary terminal condition;
(2) Related diagnosis(es), if any;
(3) Current subjective and objective medical findings;
(4) Current medication and treatment orders; and
(5) Information about the medical management of any of the patient's
(c)
(d)
A clinical record containing past and current findings is maintained for each hospice patient. The clinical record must contain correct clinical information that is available to the patient's attending physician and hospice staff. The clinical record may be maintained electronically.
(a)
(1) The initial plan of care, updated plans of care, initial assessment, comprehensive assessment, updated comprehensive assessments, and clinical notes.
(2) Signed copies of the notice of patient rights in accordance with § 418.52 and election statement in accordance with § 418.24.
(3) Responses to medications, symptom management, treatments, and services.
(4) Outcome measure data elements, as described in § 418.54(e) of this subpart.
(5) Physician certification and recertification of terminal illness as required in §§ 418.22 and 418.25 and described in §§ 418.102(b) and 418.102(c) respectively, if appropriate.
(6) Any advance directives as described in § 418.52(a)(2).
(7) Physician orders.
(b)
(c)
(d)
(e)
(i) The hospice discharge summary; and
(ii) The patient's clinical record, if requested.
(2) If a patient revokes the election of hospice care, or is discharged from hospice in accordance with § 418.26, the hospice must forward to the patient's attending physician, a copy of—
(i) The hospice discharge summary; and
(ii) The patient's clinical record, if requested.
(3) The hospice discharge summary as required in paragraph (e)(1) and (e)(2) of this section must include—
(i) A summary of the patient's stay including treatments, symptoms and pain management.
(ii) The patient's current plan of care.
(iii) The patient's latest physician orders. and
(iv) Any other documentation that will assist in post-discharge continuity of care or that is requested by the attending physician or receiving facility.
(f)
Medical supplies and appliances, as described in § 410.36 of this chapter; durable medical equipment, as described in § 410.38 of this chapter; and drugs and biologicals related to the palliation and management of the terminal illness and related conditions, as identified in the hospice plan of care, must be provided by the hospice while the patient is under hospice care.
(a)
(2) A hospice that provides inpatient care directly in its own facility must provide pharmacy services under the direction of a qualified licensed pharmacist who is an employee of or under contract with the hospice. The provided pharmacist services must include evaluation of a patient's response to medication therapy, identification of potential adverse drug reactions, and recommended appropriate corrective action.
(b)
(2) If the drug order is verbal or given by or through electronic transmission—
(i) It must be given only to a licensed nurse, nurse practitioner (where appropriate), pharmacist, or physician; and
(ii) The individual receiving the order must record and sign it immediately and have the prescribing person sign it in accordance with State and Federal regulations.
(c)
(1) Obtain drugs and biologicals from community or institutional pharmacists or stock drugs and biologicals itself.
(2) The hospice that provides inpatient care directly in its own facility must:
(i) Have a written policy in place that promotes dispensing accuracy; and
(ii) Maintain current and accurate records of the receipt and disposition of all controlled drugs.
(d)
(2) Patients receiving care in a hospice that provides inpatient care directly in its own facility may only be administered medications by the following individuals:
(i) A licensed nurse, physician, or other health care professional in accordance with their scope of practice and State law;
(ii) An employee who has completed a State-approved training program in medication administration; and
(iii) The patient, upon approval by the interdisciplinary group.
(e)
(2)
(A) Provide a copy of the hospice written policies and procedures on the management and disposal of controlled drugs to the patient or patient representative and family;
(B) Discuss the hospice policies and procedures for managing the safe use and disposal of controlled drugs with the patient or representative and the family in a language and manner that they understand to ensure that these parties are educated regarding the safe
(C) Document in the patient's clinical record that the written policies and procedures for managing controlled drugs was provided and discussed.
(ii) Disposal of controlled drugs in hospices that provide inpatient care directly. The hospice that provides inpatient care directly in its own facility must dispose of controlled drugs in compliance with the hospice policy and in accordance with State and Federal requirements. The hospice must maintain current and accurate records of the receipt and disposition of all controlled drugs.
(3)
(i) All drugs and biologicals must be stored in secure areas. All controlled drugs listed in Schedules II, III, IV, and V of the Comprehensive Drug Abuse Prevention and Control Act of 1976 must be stored in locked compartments within such secure storage areas. Only personnel authorized to administer controlled drugs as noted in paragraph (d)(2) of this section may have access to the locked compartments; and
(ii) Discrepancies in the acquisition, storage, dispensing, administration, disposal, or return of controlled drugs must be investigated immediately by the pharmacist and hospice administrator and where required reported to the appropriate State authority. A written account of the investigation must be made available to State and Federal officials if required by law or regulation.
(f)
(2) The hospice must ensure that the patient, where appropriate, as well as the family and/or other caregiver(s), receive instruction in the safe use of durable medical equipment and supplies. The hospice may use persons under contract to ensure patient and family instruction. The patient, family, and/or caregiver must be able to demonstrate the appropriate use of durable medical equipment to the satisfaction of the hospice staff.
(3) Hospices may only contract for durable medical equipment services with a durable medical equipment supplier that meets the Medicare DMEPOS Supplier Quality and Accreditation Standards at 42 CFR 424.57.
Inpatient care must be available for pain control, symptom management, and respite purposes, and must be provided in a participating Medicare or Medicaid facility.
(a)
(1) A Medicare-certified hospice that meets the conditions of participation for providing inpatient care directly as specified in § 418.110.
(2) A Medicare-certified hospital or a skilled nursing facility that also meets the standards specified in § 418.110(b) and (e) regarding 24-hour nursing services and patient areas.
(b)
(i) A provider specified in paragraph (a) of this section.
(ii) A Medicare or Medicaid-certified nursing facility that also meets the standards specified in § 418.110(e).
(2) The facility providing respite care must provide 24-hour nursing services that meet the nursing needs of all patients and are furnished in accordance with each patient's plan of care. Each patient must receive all nursing services as prescribed and must be kept comfortable, clean, well-groomed, and
(c)
(1) That the hospice supplies the inpatient provider a copy of the patient's plan of care and specifies the inpatient services to be furnished;
(2) That the inpatient provider has established patient care policies consistent with those of the hospice and agrees to abide by the palliative care protocols and plan of care established by the hospice for its patients;
(3) That the hospice patient's inpatient clinical record includes a record of all inpatient services furnished and events regarding care that occurred at the facility; that a copy of the discharge summary be provided to the hospice at the time of discharge; and that a copy of the inpatient clinical record is available to the hospice at the time of discharge;
(4) That the inpatient facility has identified an individual within the facility who is responsible for the implementation of the provisions of the agreement;
(5) That the hospice retains responsibility for ensuring that the training of personnel who will be providing the patient's care in the inpatient facility has been provided and that a description of the training and the names of those giving the training are documented; and
(6) A method for verifying that the requirements in paragraphs (c)(1) through (c)(5) of this section are met.
(d)
(e)
A hospice that provides inpatient care directly in its own facility must demonstrate compliance with all of the following standards:
(a)
(b)
(2) If at least one patient in the hospice facility is receiving general inpatient care, then each shift must include a registered nurse who provides direct patient care.
(c)
(1)
(ii) The hospice must have a written disaster preparedness plan in effect for managing the consequences of power failures, natural disasters, and other emergencies that would affect the hospice's ability to provide care. The plan must be periodically reviewed and rehearsed with staff (including non-employee staff) with special emphasis placed on carrying out the procedures necessary to protect patients and others.
(2)
(i) The routine storage and prompt disposal of trash and medical waste;
(ii) Light, temperature, and ventilation/air exchanges throughout the hospice;
(iii) Emergency gas and water supply; and
(iv) The scheduled and emergency maintenance and repair of all equipment.
(d)
(i) The hospice must meet the provisions applicable to nursing homes of the 2000 edition of the Life Safety Code (LSC) of the National Fire Protection Association (NFPA). The Director of the Office of the Federal Register has approved the NFPA 101
(ii) Chapter 19.3.6.3.2, exception number 2 of the adopted edition of the LSC does not apply to hospices.
(2) In consideration of a recommendation by the State survey agency, CMS may waive, for periods deemed appropriate, specific provisions of the Life Safety Code which, if rigidly applied would result in unreasonable hardship for the hospice, but only if the waiver would not adversely affect the health and safety of patients.
(3) The provisions of the adopted edition of the Life Safety Code do not apply in a State if CMS finds that a fire and safety code imposed by State law adequately protects patients in hospices.
(4) Notwithstanding any provisions of the 2000 edition of the Life Safety Code to the contrary, a hospice may place alcohol-based hand rub dispensers in its facility if—
(i) Use of alcohol-based hand rub dispensers does not conflict with any State or local codes that prohibit or otherwise restrict the placement of alcohol-based hand rub dispensers in health care facilities;
(ii) The dispensers are installed in a manner that minimizes leaks and spills that could lead to falls;
(iii) The dispensers are installed in a manner that adequately protects against access by vulnerable populations; and
(iv) The dispensers are installed in accordance with chapter 18.3.2.7 or chapter 19.3.2.7 of the 2000 edition of the Life Safety Code, as amended by NFPA Temporary Interim Amendment 00-1(101), issued by the Standards Council of the National Fire Protection Association on April 15, 2004. The Director of the Office of the Federal Register has approved NFPA Temporary Interim Amendment 00-1(101) for incorporation by reference in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. A copy of the code is available for inspection at the CMS Information Resource Center, 7500 Security Boulevard, Baltimore, MD or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
(e)
(1) The hospice must provide—
(i) Physical space for private patient and family visiting;
(ii) Accommodations for family members to remain with the patient throughout the night; and
(iii) Physical space for family privacy after a patient's death.
(2) The hospice must provide the opportunity for patients to receive visitors at any hour, including infants and small children.
(f)
(2) The hospice must accommodate a patient and family request for a single room whenever possible.
(3) Each patient's room must—
(i) Be at or above grade level;
(ii) Contain a suitable bed and other appropriate furniture for each patient;
(iii) Have closet space that provides security and privacy for clothing and personal belongings;
(iv) Accommodate no more than two patients and their family members;
(v) Provide at least 80 square feet for each residing patient in a double room and at least 100 square feet for each patient residing in a single room; and
(vi) Be equipped with an easily-activated, functioning device accessible to the patient, that is used for calling for assistance.
(4) For a facility occupied by a Medicare-participating hospice on December 2, 2008, CMS may waive the space and occupancy requirements of paragraphs (f)(2)(iv) and (f)(2)(v) of this section if it determines that—
(i) Imposition of the requirements would result in unreasonable hardship on the hospice if strictly enforced; or jeopardize its ability to continue to participate in the Medicare program; and
(ii) The waiver serves the needs of the patient and does not adversely affect their health and safety.
(g)
(h)
(1) Have an adequate supply of hot water at all times; and
(2) Have plumbing fixtures with control valves that automatically regulate the temperature of the hot water used by patients.
(i)
(j)
(k)
(l)
(1) Consistent with the patient's plan of care, nutritional needs, and therapeutic diet;
(2) Palatable, attractive, and served at the proper temperature; and
(3) Obtained, stored, prepared, distributed, and served under sanitary conditions.
(m)
(1) Restraint or seclusion may only be used when less restrictive interventions have been determined to be ineffective to protect the patient, a staff member, or others from harm.
(2) The type or technique of restraint or seclusion used must be the least restrictive intervention that will be effective to protect the patient, a staff member, or others from harm.
(3) The use of restraint or seclusion must be—
(i) In accordance with a written modification to the patient's plan of care; and
(ii) Implemented in accordance with safe and appropriate restraint and seclusion techniques as determined by hospice policy in accordance with State law.
(4) The use of restraint or seclusion must be in accordance with the order of a physician authorized to order restraint or seclusion by hospice policy in accordance with State law.
(5) Orders for the use of restraint or seclusion must never be written as a standing order or on an as needed basis (PRN).
(6) The medical director or physician designee must be consulted as soon as possible if the attending physician did not order the restraint or seclusion.
(7) Unless superseded by State law that is more restrictive—
(i) Each order for restraint or seclusion used for the management of violent or self-destructive behavior that jeopardizes the immediate physical safety of the patient, a staff member, or others may only be renewed in accordance with the following limits for up to a total of 24 hours:
(A) 4 hours for adults 18 years of age or older;
(B) 2 hours for children and adolescents 9 to 17 years of age; or
(C) 1 hour for children under 9 years of age; and
After 24 hours, before writing a new order for the use of restraint or seclusion for the management of violent or self-destructive behavior, a physician authorized to order restraint or seclusion by hospice policy in accordance with State law must see and assess the patient.
(ii) Each order for restraint used to ensure the physical safety of the non-violent or non-self-destructive patient may be renewed as authorized by hospice policy.
(8) Restraint or seclusion must be discontinued at the earliest possible time, regardless of the length of time identified in the order.
(9) The condition of the patient who is restrained or secluded must be monitored by a physician or trained staff that have completed the training criteria specified in paragraph (n) of this section at an interval determined by hospice policy.
(10) Physician, including attending physician, training requirements must be specified in hospice policy. At a minimum, physicians and attending physicians authorized to order restraint or seclusion by hospice policy in accordance with State law must have a working knowledge of hospice policy regarding the use of restraint or seclusion.
(11) When restraint or seclusion is used for the management of violent or self-destructive behavior that jeopardizes the immediate physical safety of the patient, a staff member, or others, the patient must be seen face-to-face within 1 hour after the initiation of the intervention—
(i) By a—
(A) Physician; or
(B) Registered nurse who has been trained in accordance with the requirements specified in paragraph (n) of this section.
(ii) To evaluate—
(A) The patient's immediate situation;
(B) The patient's reaction to the intervention;
(C) The patient's medical and behavioral condition; and
(D) The need to continue or terminate the restraint or seclusion.
(12) States are free to have requirements by statute or regulation that are more restrictive than those contained in paragraph (m)(11)(i) of this section.
(13) If the face-to-face evaluation specified in § 418.110(m)(11) is conducted by a trained registered nurse, the trained registered nurse must consult the medical director or physician designee as soon as possible after the completion of the 1-hour face-to-face evaluation.
(14) All requirements specified under this paragraph are applicable to the simultaneous use of restraint and seclusion. Simultaneous restraint and seclusion use is only permitted if the patient is continually monitored—
(i) Face-to-face by an assigned, trained staff member; or
(ii) By trained staff using both video and audio equipment. This monitoring must be in close proximity to the patient.
(15) When restraint or seclusion is used, there must be documentation in the patient's clinical record of the following:
(i) The 1-hour face-to-face medical and behavioral evaluation if restraint or seclusion is used to manage violent or self-destructive behavior;
(ii) A description of the patient's behavior and the intervention used;
(iii) Alternatives or other less restrictive interventions attempted (as applicable);
(iv) The patient's condition or symptom(s) that warranted the use of the restraint or seclusion; and the patient's response to the intervention(s) used, including the rationale for continued use of the intervention.
(n)
(1)
(i) Before performing any of the actions specified in this paragraph;
(ii) As part of orientation; and
(iii) Subsequently on a periodic basis consistent with hospice policy.
(2)
(i) Techniques to identify staff and patient behaviors, events, and environmental factors that may trigger circumstances that require the use of a restraint or seclusion.
(ii) The use of nonphysical intervention skills.
(iii) Choosing the least restrictive intervention based on an individualized assessment of the patient's medical, or behavioral status or condition.
(iv) The safe application and use of all types of restraint or seclusion used in the hospice, including training in how to recognize and respond to signs of physical and psychological distress (for example, positional asphyxia).
(v) Clinical identification of specific behavioral changes that indicate that restraint or seclusion is no longer necessary.
(vi) Monitoring the physical and psychological well-being of the patient who is restrained or secluded, including but not limited to, respiratory and circulatory status, skin integrity, vital signs, and any special requirements specified by hospice policy associated with the 1-hour face-to-face evaluation.
(vii) The use of first aid techniques and certification in the use of cardiopulmonary resuscitation, including required periodic recertification.
(3)
(4)
(o)
(1) The hospice must report the following information to CMS:
(i) Each unexpected death that occurs while a patient is in restraint or seclusion.
(ii) Each unexpected death that occurs within 24 hours after the patient has been removed from restraint or seclusion.
(iii) Each death known to the hospice that occurs within 1 week after restraint or seclusion where it is reasonable to assume that use of restraint or placement in seclusion contributed directly or indirectly to a patient's death. “Reasonable to assume” in this context includes, but is not limited to, deaths related to restrictions of movement for prolonged periods of time, or death related to chest compression, restriction of breathing or asphyxiation.
(2) Each death referenced in this paragraph must be reported to CMS by telephone no later than the close of business the next business day following knowledge of the patient's death.
(3) Staff must document in the patient's clinical record the date and time the death was reported to CMS.
In addition to meeting the conditions of participation at § 418.10 through § 418.116, a hospice that provides hospice care to residents of a SNF/NF or ICF/MR must abide by the following additional standards.
(a)
(b)
(c)
(1) The manner in which the SNF/NF or ICF/MR and the hospice are to communicate with each other and document such communications to ensure that the needs of patients are addressed and met 24 hours a day.
(2) A provision that the SNF/NF or ICF/MR immediately notifies the hospice if—
(i) A significant change in a patient's physical, mental, social, or emotional status occurs;
(ii) Clinical complications appear that suggest a need to alter the plan of care;
(iii) A need to transfer a patient from the SNF/NF or ICF/MR, and the hospice makes arrangements for, and remains responsible for, any necessary continuous care or inpatient care necessary related to the terminal illness and related conditions; or
(iv) A patient dies.
(3) A provision stating that the hospice assumes responsibility for determining the appropriate course of hospice care, including the determination to change the level of services provided.
(4) An agreement that it is the SNF/NF or ICF/MR responsibility to continue to furnish 24 hour room and board care, meeting the personal care and nursing needs that would have been provided by the primary caregiver at home at the same level of care provided before hospice care was elected.
(5) An agreement that it is the hospice's responsibility to provide services at the same level and to the same extent as those services would be provided if the SNF/NF or ICF/MR resident were in his or her own home.
(6) A delineation of the hospice's responsibilities, which include, but are not limited to the following: Providing medical direction and management of the patient; nursing; counseling (including spiritual, dietary and bereavement); social work; provision of medical supplies, durable medical equipment and drugs necessary for the palliation of pain and symptoms associated with the terminal illness and related conditions; and all other hospice services that are necessary for the care of the resident's terminal illness and related conditions.
(7) A provision that the hospice may use the SNF/NF or ICF/MR nursing personnel where permitted by State law and as specified by the SNF/NF or ICF/MR to assist in the administration of prescribed therapies included in the plan of care only to the extent that the hospice would routinely use the services of a hospice patient's family in implementing the plan of care.
(8) A provision stating that the hospice must report all alleged violations involving mistreatment, neglect, or verbal, mental, sexual, and physical abuse, including injuries of unknown source, and misappropriation of patient property by anyone unrelated to the
(9) A delineation of the responsibilities of the hospice and the SNF/NF or ICF/MR to provide bereavement services to SNF/NF or ICF/MR staff.
(d)
(1) The hospice plan of care must identify the care and services that are needed and specifically identify which provider is responsible for performing the respective functions that have been agreed upon and included in the hospice plan of care.
(2) The hospice plan of care reflects the participation of the hospice, the SNF/NF or ICF/MR, and the patient and family to the extent possible.
(3) Any changes in the hospice plan of care must be discussed with the patient or representative, and SNF/NF or ICF/MR representatives, and must be approved by the hospice before implementation.
(e)
(1) Designate a member of each interdisciplinary group that is responsible for a patient who is a resident of a SNF/NF or ICF/MR. The designated interdisciplinary group member is responsible for:
(i) Providing overall coordination of the hospice care of the SNF/NF or ICF/MR resident with SNF/NF or ICF/MR representatives; and
(ii) Communicating with SNF/NF or ICF/MR representatives and other health care providers participating in the provision of care for the terminal illness and related conditions and other conditions to ensure quality of care for the patient and family.
(2) Ensure that the hospice IDG communicates with the SNF/NF or ICF/MR medical director, the patient's attending physician, and other physicians participating in the provision of care to the patient as needed to coordinate the hospice care of the hospice patient with the medical care provided by other physicians.
(3) Provide the SNF/NF or ICF/MR with the following information:
(i) The most recent hospice plan of care specific to each patient;
(ii) Hospice election form and any advance directives specific to each patient;
(iii) Physician certification and recertification of the terminal illness specific to each patient;
(iv) Names and contact information for hospice personnel involved in hospice care of each patient;
(v) Instructions on how to access the hospice's 24-hour on-call system;
(vi) Hospice medication information specific to each patient; and
(vii) Hospice physician and attending physician (if any) orders specific to each patient.
(f)
(a)
(b)
(1)
(2)
(3)
(i)(A) Has a Master of Social Work (MSW) degree from a school of social work accredited by the Council on Social Work Education; or
(B) Has a baccalaureate degree in social work from an institution accredited by the Council on Social Work Education; or a baccalaureate degree in psychology, sociology, or other field related to social work and is supervised by an MSW as described in paragraph (b)(3)(i)(A) of this section; and
(ii) Has 1 year of social work experience in a healthcare setting; or
(iii) Has a baccalaureate degree from a school of social work accredited by the Council on Social Work Education, is employed by the hospice before December 2, 2008, and is not required to be supervised by an MSW.
(4)
(i) The education and experience requirements for a Certificate of Clinical Competence in speech-language pathology granted by the American Speech-Language-Hearing Association.
(ii) The educational requirements for certification and is in the process of accumulating the supervised experience required for certification.
(5)
(i)(A) Is licensed or otherwise regulated, if applicable, as an occupational therapist by the State in which practicing, unless licensure does not apply;
(B) Graduated after successful completion of an occupational therapist education program accredited by the Accreditation Council for Occupational Therapy Education (ACOTE) of the American Occupational Therapy Association, Inc. (AOTA), or successor organizations of ACOTE; and
(C) Is eligible to take, or has successfully completed the entry-level certification examination for occupational therapists developed and administered by the National Board for Certification in Occupational Therapy, Inc. (NBCOT).
(ii) On or before December 31, 2009—
(A) Is licensed or otherwise regulated, if applicable, as an occupational therapist by the State in which practicing; or
(B) When licensure or other regulation does not apply—
(
(
(iii) On or before January 1, 2008—
(A) Graduated after successful completion of an occupational therapy program accredited jointly by the committee on Allied Health Education and Accreditation of the American Medical Association and the American Occupational Therapy Association; or
(B) Is eligible for the National Registration Examination of the American Occupational Therapy Association or the National Board for Certification in Occupational Therapy.
(iv) On or before December 31, 1977—
(A) Had 2 years of appropriate experience as an occupational therapist; and
(B) Had achieved a satisfactory grade on an occupational therapist proficiency examination conducted, approved, or sponsored by the U.S. Public Health Service.
(v) If educated outside the United States—
(A) Must meet both of the following:
(
(
(
(
(
(
(
(6)
(i) Meets all of the following:
(A) Is licensed or otherwise regulated, if applicable, as an occupational therapy assistant by the State in which practicing, unless licensure does apply.
(B) Graduated after successful completion of an occupational therapy assistant education program accredited by the Accreditation Council for Occupational Therapy Education (ACOTE) of the American Occupational Therapy Association, Inc. (AOTA) or its successor organizations.
(C) Is eligible to take or successfully completed the entry-level certification examination for occupational therapy assistants developed and administered by the National Board for Certification in Occupational Therapy, Inc. (NBCOT).
(ii) On or before December 31, 2009—
(A) Is licensed or otherwise regulated as an occupational therapy assistant, if applicable, by the State in which practicing; or any qualifications defined by the State in which practicing, unless licensure does not apply; or
(B) Must meet both of the following:
(
(
(iii) After December 31, 1977 and on or before December 31, 2007—
(A) Completed certification requirements to practice as an occupational therapy assistant established by a credentialing organization approved by the American Occupational Therapy Association; or
(B) Completed the requirements to practice as an occupational therapy assistant applicable in the State in which practicing.
(iv) On or before December 31, 1977—
(A) Had 2 years of appropriate experience as an occupational therapy assistant; and
(B) Had achieved a satisfactory grade on an occupational therapy assistant proficiency examination conducted, approved, or sponsored by the U.S. Public Health Service.
(v) If educated outside the United States, on or after January 1, 2008—
(A) Graduated after successful completion of an occupational therapy assistant education program that is accredited as substantially equivalent to occupational therapist assistant entry level education in the United States by—
(
(
(
(
(
(7)
(i) Graduated after successful completion of a physical therapist education program approved by one of the following:
(A) The Commission on Accreditation in Physical Therapy Education (CAPTE).
(B) Successor organizations of CAPTE.
(C) An education program outside the United States determined to be substantially equivalent to physical therapist entry level education in the United States by a credentials evaluation organization approved by the American
(D) Passed an examination for physical therapists approved by the State in which physical therapy services are provided.
(ii) On or before December 31, 2009—
(A) Graduated after successful completion of a physical therapy curriculum approved by the Commission on Accreditation in Physical Therapy Education (CAPTE); or
(B) Meets both of the following:
(
(
(iii) Before January 1, 2008—
(A) Graduated from a physical therapy curriculum approved by one of the following:
(
(
(
(iv) On or before December 31, 1977 was licensed or qualified as a physical therapist and meets both of the following:
(A) Has 2 years of appropriate experience as a physical therapist.
(B) Has achieved a satisfactory grade on a proficiency examination conducted, approved, or sponsored by the U.S. Public Health Service.
(v) Before January 1, 1966—
(A) Was admitted to membership by the American Physical Therapy Association;
(B) Was admitted to registration by the American Registry of Physical Therapists; and
(C) Graduated from a physical therapy curriculum in a 4-year college or university approved by a State department of education.
(vi) Before January 1, 1966 was licensed or registered, and before January 1, 1970, had 15 years of fulltime experience in the treatment of illness or injury through the practice of physical therapy in which services were rendered under the order and direction of attending and referring doctors of medicine or osteopathy.
(vii) If trained outside the United States before January 1, 2008, meets the following requirements:
(A) Was graduated since 1928 from a physical therapy curriculum approved in the country in which the curriculum was located and in which there is a member organization of the World Confederation for Physical Therapy.
(B) Meets the requirements for membership in a member organization of the World Confederation for Physical Therapy.
(8)
(i) Graduated from a physical therapist assistant curriculum approved by the Commission on Accreditation in Physical Therapy Education of the American Physical Therapy Association; or if educated outside the United States or trained in the United States military, graduated from an education program determined to be substantially equivalent to physical therapist assistant entry level education in the United States by a credentials evaluation organization approved by the American Physical Therapy Association or identified at 8 CFR 212.15(e); and
(ii) Passed a national examination for physical therapist assistants.
(A) On or before December 31, 2009, meets one of the following:
(
(
(
(
(c)
(1)
(2)
(d)
(2) Criminal background checks must be obtained in accordance with State requirements. In the absence of State requirements, criminal background checks must be obtained within three months of the date of employment for all states that the individual has lived or worked in the past 3 years.
The hospice and its staff must operate and furnish services in compliance with all applicable Federal, State, and local laws and regulations related to the health and safety of patients. If State or local law provides for licensing of hospices, the hospice must be licensed.
(a)
(b)
(2) If the hospice chooses to refer specimens for laboratory testing to a reference laboratory, the reference laboratory must be certified in the appropriate specialties and subspecialties of services in accordance with the applicable requirements of part 493 of this chapter.
To be covered, hospice services must meet the following requirements. They must be reasonable and necessary for the palliation and management of the terminal illness as well as related conditions. The individual must elect hospice care in accordance with § 418.24. A plan of care must be established and periodically reviewed by the attending physician, the medical director, and the interdisciplinary group of the hospice program as set forth in § 418.56. That plan of care must be established before hospice care is provided. The services provided must be consistent with the plan of care. A certification that the individual is terminally ill must be completed as set forth in section § 418.22.
All services must be performed by appropriately qualified personnel, but it is the nature of the service, rather than the qualification of the person
(a) Nursing care provided by or under the supervision of a registered nurse.
(b) Medical social services provided by a social worker under the direction of a physician.
(c) Physicians' services performed by a physician as defined in § 410.20 of this chapter except that the services of the hospice medical director or the physician member of the interdisciplinary group must be performed by a doctor of medicine or osteopathy.
(d) Counseling services provided to the terminally ill individual and the family members or other persons caring for the individual at home. Counseling, including dietary counseling, may be provided both for the purpose of training the individual's family or other caregiver to provide care, and for the purpose of helping the individual and those caring for him or her to adjust to the individual's approaching death.
(e) Short-term inpatient care provided in a participating hospice inpatient unit, or a participating hospital or SNF, that additionally meets the standards in § 418.202 (a) and (e) regarding staffing and patient areas. Services provided in an inpatient setting must conform to the written plan of care. Inpatient care may be required for procedures necessary for pain control or acute or chronic symptom management.
(f)
(g)
(h) Physical therapy, occupational therapy and speech-language pathology services in addition to the services described in § 409.33 (b) and (c) of this chapter provided for purposes of symptom control or to enable the patient to maintain activities of daily living and basic functional skills.
(i) Effective April 1, 1998, any other service that is specified in the patient's plan of care as reasonable and necessary for the palliation and management of the patient's terminal illness and related conditions and for which payment may otherwise be made under Medicare.
(a)
(b)
(2) Respite care may be provided only on an occasional basis and may not be reimbursed for more than five consecutive days at a time.
(c)
(a)
(b)
(1)
(i) Has been diagnosed as having a terminal illness as defined in § 418.3.
(ii) Has not made a hospice election.
(iii) Has not previously received hospice pre-election evaluation and consultation services specified under this section.
(2)
(3)
(ii) The physician furnishing these services must be an employee or medical director of the hospice billing for this service.
(iii) The services cannot be furnished by hospice personnel other than employed physicians, such as but not limited to nurse practitioners, nurses, or social workers, physicians under contractual arrangements with the hospice or by the beneficiary's physician, if that physician is not an employee of the hospice.
(iv) If the beneficiary's attending physician is also the medical director or a physician employee of the hospice, the attending physician may not provide nor may the hospice bill for this service because that physician already possesses the expertise necessary to furnish end-of-life evaluation and management, and counseling services.
(4)
(ii) The request or referral must be in writing, and the hospice medical director or physician employee is expected to provide a written note on the patient's medical record.
(iii) The hospice agency employing the physician providing these services is required to maintain a written record of the services furnished.
(iv) If the services are initiated by the beneficiary, the hospice agency is required to maintain a record of the services and documentation that communication between the hospice medical director or physician and the beneficiary's physician occurs, with the beneficiary's permission, to the extent necessary to ensure continuity of care.
(a) Medicare payment for covered hospice care is made in accordance with the method set forth in § 418.302.
(b) Medicare reimbursement to a hospice in a cap period is limited to a cap amount specified in § 418.309.
(c) The hospice may not charge a patient for services for which the patient is entitled to have payment made under Medicare or for services for which the patient would be entitled to payment, as described in § 489.21 of this chapter.
(a) CMS establishes payment amounts for specific categories of covered hospice care.
(b) Payment amounts are determined within each of the following categories:
(1)
(2)
(3)
(4)
(c) The payment amounts for the categories of hospice care are fixed payment rates that are established by CMS in accordance with the procedures described in § 418.306. Payment rates are determined for the following categories:
(1) Routine home care.
(2) Continuous home care.
(3) Inpatient respite care.
(4) General inpatient care.
(d)(1) The intermediary reimburses the hospice its appropriate payment amount for each day for which an eligible Medicare beneficiary is under the hospice's care.
(2) Effective December 8, 2003, if a hospice makes arrangements with another hospice to provide services under the circumstances specified in section 1861(dd)(5)(D) of the Act, the intermediary reimburses the hospice for which the beneficiary has made an election as described in paragraph (d)(1) of this section.
(e) The intermediary makes payment according to the following procedures:
(1) Payment is made to the hospice for each day during which the beneficiary is eligible and under the care of the hospice, regardless of the amount of services furnished on any given day.
(2) Payment is made for only one of the categories of hospice care described in § 418.302(b) for any particular day.
(3) On any day on which the beneficiary is not an inpatient, the hospice is paid the routine home care rate, unless the patient receives continuous care as defined in paragraph (b)(2) of this section for a period of at least 8 hours. In that case, a portion of the continuous care day rate is paid in accordance with paragraph (e)(4) of this section.
(4) The hospice payment on a continuous care day varies depending on the number of hours of continuous services provided. The continuous home care rate is divided by 24 to yield an hourly rate. The number of hours of continuous care provided during a continuous home care day is then multiplied by the hourly rate to yield the continuous home care payment for that day. A minimum of 8 hours of care must be furnished on a particular day to qualify for the continuous home care rate.
(5) Subject to the limitations described in paragraph (f) of this section, on any day on which the beneficiary is an inpatient in an approved facility for inpatient care, the appropriate inpatient rate (general or respite) is paid depending on the category of care furnished. The inpatient rate (general or
(f) Payment for inpatient care is limited as follows:
(1) The total payment to the hospice for inpatient care (general or respite) is subject to a limitation that total inpatient care days for Medicare patients not exceed 20 percent of the total days for which these patients had elected hospice care.
(2) At the end of a cap period, the intermediary calculates a limitation on payment for inpatient care to ensure that Medicare payment is not made for days of inpatient care in excess of 20 percent of the total number of days of hospice care furnished to Medicare patients. Only inpatient days that were provided and billed as general inpatient or respite days are counted as inpatient days when computing the inpatient cap.
(3) If the number of days of inpatient care furnished to Medicare patients is equal to or less than 20 percent of the total days of hospice care to Medicare patients, no adjustment is necessary. Overall payments to a hospice are subject to the cap amount specified in § 418.309.
(4) If the number of days of inpatient care furnished to Medicare patients exceeds 20 percent of the total days of hospice care to Medicare patients, the total payment for inpatient care is determined in accordance with the procedures specified in paragraph (f)(5) of this section. That amount is compared to actual payments for inpatient care, and any excess reimbursement must be refunded by the hospice. Overall payments to the hospice are subject to the cap amount specified in § 418.309.
(5) If a hospice exceeds the number of inpatient care days described in paragraph (f)(4), the total payment for inpatient care is determined as follows:
(i) Calculate the ratio of the maximum number of allowable inpatient days to the actual number of inpatient care days furnished by the hospice to Medicare patients.
(ii) Multiply this ratio by the total reimbursement for inpatient care made by the intermediary.
(iii) Multiply the number of actual inpatient days in excess of the limitation by the routine home care rate.
(iv) Add the amounts calculated in paragraphs (f)(5)(ii) and (iii) of this section.
(g) Payment for routine home care, continuous home care, general inpatient care and inpatient respite care is made on the basis of the geographic location where the services are provided.
(a) The following services performed by hospice physicians and nurse practitioners are included in the rates described in § 418.302:
(1) General supervisory services of the medical director.
(2) Participation in the establishment of plans of care, supervision of care and services, periodic review and updating of plans of care, and establishment of governing policies by the physician member of the interdisciplinary group.
(b) For services not described in paragraph (a) of this section, a specified Medicare contractor pays the hospice an amount equivalent to 100 percent of the physician fee schedule for those physician services furnished by hospice employees or under arrangements with the hospice. Reimbursement for these physician services is included in the amount subject to the hospice payment limit described in § 418.309. Services furnished voluntarily by physicians are not reimbursable.
(c) Services of the patient's attending physician, if he or she is not an employee of the hospice or providing services under arrangements with the hospice, are not considered hospice services and are not included in the amount subject to the hospice payment limit described in § 418.309. These services are paid by the carrier under the procedures in subpart B, part 414 of this chapter.
(d)
(e)(1) Effective December 8, 2003, Medicare pays for attending physician services provided by nurse practitioners to Medicare beneficiaries who have elected the hospice benefit and who have selected a nurse practitioner as their attending physician. This applies to nurse practitioners without regard to whether they are hospice employees.
(2) Nurse practitioners may bill and receive payment for services only if the—
(i) Nurse practitioner is the beneficiary's attending physician as defined in § 418.3;
(ii) Services are medically reasonable and necessary;
(iii) Services are performed by a physician in the absence of the nurse practitioner; and
(iv) Services are not related to the certification of terminal illness specified in § 418.22.
(3) Payment for nurse practitioner services are made at 85 percent of the physician fee schedule amount.
(a)
(b)
(1) The following rates, which are 120 percent of the rates in effect on September 30, 1989, are effective January 1, 1990 through September 30, 1990 and October 21, 1990 through December 31, 1990:
(2) Except for the period beginning October 21, 1990, through December 31, 1990, the payment rates for routine home care and other services included in hospice care for Federal fiscal years 1991, 1992, and 1993 and those that begin on or after October 1, 1997, are the payment rates in effect under this paragraph during the previous fiscal year increased by the market basket percentage increase as defined in section 1886(b)(3)(B)(iii) of the Act, otherwise applicable to discharges occurring in the fiscal year. The payment rates for the period beginning October 21, 1990, through December 31, 1990, are the same as those shown in paragraph (b)(1) of this section.
(3) For Federal fiscal years 1994 through 2002, the payment rate is the payment rate in effect during the previous fiscal year increased by a factor equal to the market basket percentage increase minus—
(i) 2 percentage points in FY 1994;
(ii) 1.5 percentage points in FYs 1995 and 1996;
(iii) 0.5 percentage points in FY 1997; and
(iv) 1 percentage point in FY 1998 through FY 2002.
(4) For Federal fiscal year 2001, the payment rate is the payment rate in effect during the previous fiscal year increased by a factor equal to the market
(5) The payment rate for hospice services furnished during fiscal years 2001 and 2002 is increased by an additional 0.5 percent and 0.75 percent, respectively. This additional amount is not included in updating the payment rate as described in paragraph (b)(3) of this section.
(c)
(d)
Subject to the provisions of § 413.64(h) of this chapter, a hospice may elect to receive periodic interim payments (PIP) effective with claims received on or after July 1, 1987. Payment is made biweekly under the PIP method unless the hospice requests a longer fixed interval (not to exceed one month) between payments. The biweekly interim payment amount is based on the total estimated Medicare payments for the reporting period (as described in §§ 418.302-418.306). Each payment is made 2 weeks after the end of a biweekly period of service as described in § 413.64(h)(5) of this chapter. Under certain circumstances that are described in § 413.64(g) of this chapter, a hospice that is not receiving PIP may request an accelerated payment.
(a) Except as specified in paragraph (b) of this section, the total Medicare payment to a hospice for care furnished during a cap period is limited by the hospice cap amount specified in § 418.309.
(b) Until October 1, 1986, payment to a hospice that began operation before January 1, 1975 is not limited by the amount of the hospice cap specified in § 418.309.
(c) The intermediary notifies the hospice of the determination of program reimbursement at the end of the cap year in accordance with procedures similar to those described in § 405.1803 of this chapter.
(d) Payments made to a hospice during a cap period that exceed the cap amount are overpayments and must be refunded.
A hospice's aggregate cap is calculated by multiplying the adjusted cap amount (determined in paragraph (a) of this section) by the number of Medicare beneficiaries, as determined by one of two methodologies for determining the number of Medicare beneficiaries for a given cap year described in paragraphs (b) and (c) of this section:
(a) The cap amount is $6,500 per year and is adjusted for inflation or deflation for cap years that end after October 1, 1984, by using the percentage change in the medical care expenditure category of the Consumer Price Index (CPI) for urban consumers that is published by the Bureau of Labor Statistics. This adjustment is made using the change in the CPI from March 1984 to
(b)
(1) In the case in which a beneficiary received care from only one hospice, the hospice includes in its number of Medicare beneficiaries those Medicare beneficiaries who have not previously been included in the calculation of any hospice cap, and who have filed an election to receive hospice care in accordance with § 418.24 during the period beginning on September 28 (34 days before the beginning of the cap year) and ending on September 27 (35 days before the end of the cap year), using the best data available at the time of the calculation.
(2) In the case in which a beneficiary received care from more than one hospice, each hospice includes in its number of Medicare beneficiaries only that fraction which represents the portion of a patient's total days of care in all hospices and all years that was spent in that hospice in that cap year, using the best data available at the time of the calculation. The aggregate cap calculation for a given cap year may be adjusted after the calculation for that year based on updated data.
(c)
(1) A hospice includes in its number of Medicare beneficiaries only that fraction which represents the portion of a patient's total days of care in all hospices and all years that was spent in that hospice in that cap year, using the best data available at the time of the calculation. The total number of Medicare beneficiaries for a given hospice's cap year is determined by summing the whole or fractional share of each Medicare beneficiary that received hospice care during the cap year, from that hospice.
(2) The aggregate cap calculation for a given cap year may be adjusted after the calculation for that year based on updated data.
(d)
(i) A hospice that has not received a cap determination for a cap year ending on or before October 31, 2011 as of October 1, 2011, may elect to have its final cap determination for such cap years calculated using the patient-by-patient proportional methodology described in paragraph (c) of this section; or
(ii) A hospice that has filed a timely appeal regarding the methodology used for determining the number of Medicare beneficiaries in its cap calculation for any cap year is deemed to have elected that its cap determination for the challenged year, and all subsequent cap years, be calculated using the patient-by-patient proportional methodology described in paragraph (c) of this section.
(2) For cap years ending October 31, 2012, and all subsequent cap years, a hospice's aggregate cap is calculated using the patient-by-patient proportional methodology described in paragraph (c) of this section, subject to the following:
(i) A hospice that has had its cap calculated using the patient-by-patient proportional methodology for any cap year(s) prior to the 2012 cap year is not eligible to elect the streamlined methodology, and must continue to have the patient-by-patient proportional methodology used to determine the number of Medicare beneficiaries in a given cap year.
(ii) A hospice that is eligible to make a one-time election to have its cap calculated using the streamlined methodology must make that election no later than 60 days after receipt of its 2012 cap
(A) The hospice subsequently submits a written election to change the methodology used in its cap determination to the patient-by-patient proportional methodology; or
(B) The hospice appeals the streamlined methodology used to determine the number of Medicare beneficiaries used in the aggregate cap calculation.
(3) If a hospice that elected to have its aggregate cap calculated using the streamlined methodology under paragraph (d)(2)(ii) of this section subsequently elects the patient-by-patient proportional methodology or appeals the streamlined methodology, under paragraph (d)(2)(ii)(A) or (B) of this section, the hospice's aggregate cap determination for that cap year and all subsequent cap years is to be calculated using the patient-by-patient proportional methodology. As such, past cap year determinations may be adjusted to prevent the over-counting of beneficiaries, subject to existing reopening regulations.
Hospices must provide reports and keep records as the Secretary determines necessary to administer the program.
A hospice that believes its payments have not been properly determined in accordance with these regulations may request a review from the intermediary or the Provider Reimbursement Review Board (PRRB) if the amount in controversy is at least $1,000 or $10,000, respectively. In such a case, the procedure in 42 CFR part 405, subpart R, will be followed to the extent that it is applicable. The PRRB, subject to review by the Secretary under § 405.1874 of this chapter, shall have the authority to determine the issues raised. The methods and standards for the calculation of the statutorily defined payment rates by CMS are not subject to appeal.
An individual who has filed an election for hospice care in accordance with § 418.24 is liable for the following coinsurance payments. Hospices may charge individuals the applicable coinsurance amounts.
(a)
(b)
(2) The amount of the individual's coinsurance liability for respite care during a hospice coinsurance period may not exceed the inpatient hospital deductible applicable for the year in which the hospice coinsurance period began.
(3) The individual hospice coinsurance period—
(i) Begins on the first day an election filed in accordance with § 418.24 is in effect for the beneficiary; and
(ii) Ends with the close of the first period of 14 consecutive days on each of which an election is not in effect for the beneficiary.
Medicare payment to the hospice discharges an individual's liability for payment for all services, other than the hospice coinsurance amounts described in § 418.400, that are considered covered hospice care (as described in § 418.202). The individual is liable for the Medicare deductibles and coinsurance payments and for the difference between the reasonable and actual charge on unassigned claims on other covered services that are not considered hospice care. Examples of services not considered hospice care include: Services furnished before or after a hospice election period; services of the individual's attending physician, if the attending physician is not an employee of or working under an arrangement with the hospice; or Medicare services received for the treatment of an illness or injury not related to the individual's terminal condition.
The Medicare payment rates established by CMS in accordance with § 418.306 are not reduced when the individual is liable for coinsurance payments. Instead, when establishing the payment rates, CMS offsets the estimated cost of services by an estimate of average coinsurance amounts hospices collect.
Secs. 1102, 1833(t), and 1871 of the Social Security Act (42 U.S.C. 1302, 1395l(t), and 1395hh).
(a)
(b)
(a)
(b)
(1) Use of an operating suite, procedure room, or treatment room;
(2) Use of recovery room;
(3) Use of an observation bed;
(4) Anesthesia, certain drugs, biologicals, and other pharmaceuticals; medical and surgical supplies and equipment; surgical dressings; and devices used for external reduction of fractures and dislocations;
(5) Supplies and equipment for administering and monitoring anesthesia or sedation;
(6) Intraocular lenses (IOLs);
(7) Incidental services such as venipuncture;
(8) Capital-related costs;
(9) Implantable items used in connection with diagnostic X-ray tests, diagnostic laboratory tests, and other diagnostic tests;
(10) Durable medical equipment that is implantable;
(11) Implantable prosthetic devices (other than dental) which replace all or part of an internal body organ (including colostomy bags and supplies directly related to colostomy care), including replacement of these devices; and
(12) Costs incurred to procure donor tissue other than corneal tissue.
(c)
(1) The costs of direct graduate medical education activities as described in §§ 413.75 through 413.83 of this chapter.
(2) The costs of nursing and allied health programs as described in § 413.85 of this chapter.
(3) The costs associated with interns and residents not in approved teaching programs as described in § 415.202 of this chapter.
(4) The costs of teaching physicians attributable to Part B services for hospitals that elect cost-based reimbursement for teaching physicians under § 415.160.
(5) The reasonable costs of anesthesia services furnished to hospital outpatients by qualified nonphysician anesthetists (certified registered nurse anesthetists and anesthesiologists' assistants) employed by the hospital or obtained under arrangements, for hospitals that meet the requirements under § 412.113(c) of this chapter.
(6) Bad debts for uncollectible deductibles and coinsurances as described in § 413.89(b) of this chapter.
(7) Organ acquisition costs paid under Part B.
(8) Corneal tissue acquisition costs.
(a)
(b)
(2) Critical access hospitals (CAHs) are excluded from the hospital outpatient prospective payment system.
(3) A hospital located outside one of the 50 States, the District of Columbia, and Puerto Rico is excluded from the hospital outpatient prospective payment system.
(4) A hospital of the Indian Health Service.
Except for services described in § 419.22, effective for services furnished on or after July 1, 2000, payment is made under the hospital outpatient prospective payment system for the following:
(a) Medicare Part B services furnished to hospital outpatients designated by the Secretary under this part.
(b) Services designated by the Secretary that are covered under Medicare Part B when furnished to hospital inpatients who are either not entitled to benefits under Part A or who have exhausted their Part A benefits but are entitled to benefits under Part B of the program.
(c) Partial hospitalization services furnished by community mental health centers (CMHCs).
(d) The following medical and other health services furnished by a home health agency (HHA) to patients who are not under an HHA plan or treatment or by a hospice program furnishing services to patients outside the hospice benefit:
(1) Antigens.
(2) Splints and casts.
(3) Hepatitis B vaccine.
(e)(1) Effective January 1, 2005 through December 31, 2008, an initial preventive physical examination, as defined in § 410.16 of this chapter, if the examination is performed no later than 6 months after the individual's initial Part B coverage date that begins on or after January 1, 2005.
(2) Effective January 1, 2009, an initial preventive physical examination, as defined in § 410.16 of this chapter, if the examination is performed no later than 12 months after the date of the individual's initial enrollment in Part B.
The following services are not paid for under the hospital outpatient prospective payment system:
(a) Physician services that meet the requirements of § 415.102(a) of this chapter for payment on a fee schedule basis.
(b) Nurse practitioner and clinical nurse specialist services, as defined in section 1861(s)(2)(K)(ii) of the Act.
(c) Physician assistant services, as defined in section 1861(s)(2)(K)(i) of the Act.
(d) Certified nurse-midwife services, as defined in section 1861(gg) of the Act.
(e) Services of qualified psychologists, as defined in section 1861(ii) of the Act.
(f) Services of an anesthetist as defined in § 410.69 of this chapter.
(g) Clinical social worker services as defined in section 1861(hh)(2) of the Act.
(h) Outpatient therapy services described in section 1833(a)(8) of the Act.
(i) Ambulance services, as described in section 1861(v)(1)(U) of the Act, or, if applicable, the fee schedule established under section 1834(l).
(j) Except as provided in § 419.22(b)(11), prosthetic devices, prosthetics, prosthetic supplies, and orthotic devices.
(k) Except as provided in § 419.2(b)(10), durable medical equipment supplied by the hospital for the patient to take home.
(l) Clinical diagnostic laboratory services.
(m)(1) Services provided on or before December 31, 2010, for patients with ESRD that are paid under the ESRD composite rate and drugs and supplies furnished during dialysis but not included in the composite rate.
(2) Renal dialysis services provided on or after January 1, 2011, for patients with ESRD that are paid under the ESRD benefit, as described in subpart H of part 413 of this chapter.
(n) Services and procedures that the Secretary designates as requiring inpatient care.
(o) Hospital outpatient services furnished to SNF residents (as defined in § 411.15(p) of this chapter) as part of the patient's resident assessment or comprehensive care plan (and thus included under the SNF PPS) that are furnished by the hospital “under arrangements” but billable only by the SNF, regardless of whether or not the patient is in a Part A SNF stay.
(p) Services that are not covered by Medicare by statute.
(q) Services that are not reasonable or necessary for the diagnosis or treatment of an illness or disease.
(r) Services defined in § 419.21(b) that are furnished to inpatients of hospitals that do not submit claims for outpatient services under Medicare Part B.
(s) Effective December 8, 2003, screening mammography services and effective January 1, 2005, diagnostic mammography services.
(t) Effective January 1, 2011, annual wellness visit providing personalized prevention plan services as defined in § 410.15 of this chapter.
(a) CMS estimates the aggregate amount that would be payable for hospital outpatient services in calendar year 1999 by summing—
(1) The total amounts that would be payable from the Trust Fund for covered hospital outpatient services without regard to the outpatient prospective payment system described in this part; and
(2) The total amounts of coinsurance that would be payable by beneficiaries to hospitals for covered hospital outpatient services without regard to the outpatient prospective payment system described in this part.
(b) The estimated aggregate amount under paragraph (a) of this section is determined as though the deductible required under section 1833(b) of the Act did not apply.
(a)
(2) CMS may make exceptions to the requirements set forth in paragraph (a)(1) in unusual cases, such as low volume items and services, but may not make such an exception in the case of a drug or biological that has been designated as an orphan drug under section 526 of the Federal Food, Drug and Cosmetic Act.
(3) The payment rate determined for an APC group in accordance with § 419.32, and the copayment amount and program payment amount determined for an APC group in accordance with subpart D of this part, apply to every HCPCS code classified within an APC group.
(b)
(2) CMS assigns to each APC group an appropriate weighting factor to reflect the relative median costs for the services within the APC group compared to the median costs for the services in all APC groups.
(c)
(2) CMS standardizes the median costs determined in paragraph (b)(1) of this section by adjusting for variations in hospital labor costs across geographic areas.
(a)
(b)
(i) For calendar year 2000, by the hospital inpatient market basket percentage increase applicable under section 1886(b)(3)(B)(iii) of the Act reduced by one percentage point.
(ii) For calendar year 2001—
(A) For services furnished on or after January 1, 2001 and before April 1, 2001, by the hospital inpatient market basket percentage increase applicable under section 1886(b)(3)(B)(iii) of the Act reduced by one percentage point; and
(B) For services furnished on or after April 1, 2001 and before January 1, 2002, by the hospital inpatient market basket percentage increase applicable under section 1886(b)(3)(B)(iii) of the Act, and increased by a transitional percentage allowance equal to 0.32 percent.
(iii) For the portion of calendar year 2002 that is affected by these rules, by the hospital inpatient market basket percentage increase applicable under section 1886(b)(3)(B)(iii) of the Act reduced by one percentage point, without taking into account the transitional percentage allowance referenced in § 419.32(b)(ii)(B).
(iv)(A) For calendar year 2003 and subsequent years, by the hospital inpatient market basket percentage increase applicable under section 1886(b)(3)(B)(iii) of the Act.
(B) The percentage increase determined under paragraph (b)(1)(iv)(A) of
(
(
(2) Beginning in calendar year 2000, CMS may substitute for the hospital inpatient market basket percentage in paragraph (b) of this section a market basket percentage increase that is determined and applied to hospital outpatient services in the same manner that the hospital inpatient market basket percentage increase is determined and applied to inpatient hospital services.
(c)
(d)
(2) In determining adjustments for 2004 and 2005, CMS will not take into account any additional expenditures per section 1833(t)(14) of the Act that would not have been made but for enactment of section 621 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.
At 66 FR 59922, Nov. 30, 2001, § 41932 was amended by revising paragraph (b)(1), effective Jan. 1, 2002. At 66 FR 67494, Dec. 31, 2001, paragraph (b)(1)(iii) was delayed indefinitely.
(a) In addition to the payment rate described in § 419.32, for each APC group there is a predetermined beneficiary copayment amount as described in § 419.41(a). The Medicare program payment amount for each APC group is calculated by applying the program payment percentage as described in § 419.41(b).
(b) For purposes of this section—
(1) Coinsurance percentage is calculated as the difference between the program payment percentage and 100 percent. The coinsurance percentage in any year is thus defined for each APC group as the greater of the following: the ratio of the APC group unadjusted copayment amount to the annual APC group payment rate, or 20 percent.
(2) Program payment percentage is calculated as the lower of the following: the ratio of the APC group payment rate minus the APC group unadjusted copayment amount, to the APC group payment rate, or 80 percent.
(3) Unadjusted copayment amount is calculated as 20 percent of the wage-adjusted national median of charges for services within an APC group furnished during 1996, updated to 1999 using an actuarial projection of charge increases for hospital outpatient department services during the period 1996 to 1999.
(c)
(a) To calculate the unadjusted copayment amount for each APC group, CMS—
(1) Standardizes 1996 hospital charges for the services within each APC group to offset variations in hospital labor costs across geographic areas;
(2) Identifies the median of the wage-neutralized 1996 charges for each APC group; and
(3) Determines the value equal to 20 percent of the wage-neutralized 1996 median charge for each APC group and multiplies that value by an actuarial projection of increases in charges for hospital outpatient department services during the period 1996 to 1999. The result is the unadjusted beneficiary copayment amount for the APC group.
(b) CMS calculates annually the program payment percentage for every APC group on the basis of each group's unadjusted copayment amount and its payment rate after the payment rate is adjusted in accordance with § 419.32.
(c) To determine payment amounts due for a service paid under the hospital outpatient prospective payment system, CMS makes the following calculations:
(1) Makes the wage index adjustment in accordance with § 419.43.
(2) Subtracts the amount of the applicable Part B deductible provided under § 410.160 of this chapter.
(3) Multiplies the remainder by the program payment percentage for the group to determine the preliminary Medicare program payment amount.
(4) Subtracts the program payment amount from the amount determined in paragraph (c)(2) of this section to determine the copayment amount.
(i) The copayment amount for an APC cannot exceed the amount of the inpatient hospital deductible, established in accordance with § 409.82 of this chapter, for that year. For purposes of this paragraph (c)—
(A) Effective for drugs and biologicals furnished on or after January 1, 2001, the copayment amount for multiple APCs for a single drug or biological furnished on the same day will be aggregated and treated as the copayment amount for one APC.
(B) Effective for drugs and biologicals furnished on or after July 1, 2001, the copayment amount for the APC or APCs for a drug or biological furnished on the same day will be aggregated with the copayment amount for the APC that reflects the administration of the drug or biological furnished on that day and treated as the copayment amount for one APC.
(ii) Effective for services furnished from April 1, 2001 through December 31, 2001, the national unadjusted coinsurance rate for an APC cannot exceed 57 percent of the prospective payment rate for that APC.
(iii) The national unadjusted coinsurance rate for an APC cannot exceed 55 percent in calendar years 2002 and 2003; 50 percent in calendar year 2004; 45 percent in calendar year 2005; and 40 percent in calendar year 2006 and thereafter.
(iv) The copayment amount is computed as if the adjustment under §§ 419.43(d) and (e) (and any adjustments made under § 419.43(f) in relation to these adjustments) and § 419.43(h) had not been paid.
(5) Adds the amount by which the copayment amount would have exceeded the inpatient hospital deductible for that year to the preliminary Medicare program payment amount determined in paragraph (c)(3) of this section to determine the final Medicare program payment amount.
(a) A hospital may elect to reduce coinsurance for any or all APC groups on a calendar year basis. A hospital may not elect to reduce copayment amounts for some, but not all, services within the same group.
(b) A hospital must notify its fiscal intermediary of its election to reduce coinsurance no later than—
(1) June 1, 2000, for coinsurance elections for the period July 1, 2000 through December 31, 2000; or
(2) December 1 preceding the beginning of each subsequent calendar year.
(c) The hospital's election must be properly documented. It must specifically identify the APCs to which it applies and the copayment amount (within the limits identified below) that the hospital has selected for each group.
(d) The election of reduced coinsurance remains in effect unchanged during the year for which the election was made.
(e) In electing reduced coinsurance, a hospital may elect a copayment amount that is less than that year's wage-adjusted copayment amount for the group but not less than 20 percent of the APC payment rate as determined under § 419.32 or, in the case of payments calculated under § 419.43(h), not less than 20 percent of the APC payment rate as determined under § 419.43(h).
(f) The hospital may advertise and otherwise disseminate information
(a)
(b)
(c)
(2) For services furnished beginning January 1, 2011, the wage index factor provided for in paragraph (c)(1) of this section applicable to any hospital outpatient department that is located in a frontier State, as defined in § 412.64(m) of this chapter, may not be less than 1.00.
(3) The additional payments made under the provisions of paragraph (c)(2) of this section are not implemented in a budget neutral manner.
(d)
(i) A fixed multiple of the sum of—
(A) The applicable Medicare hospital outpatient payment amount determined under § 419.32(c), as adjusted under § 419.43 (other than for adjustments under this paragraph (d) or paragraph (e) of this section); and
(B) Any transitional pass-through payment under § 419.66.
(ii) At the option of CMS, a fixed dollar amount.
(2)
(3)
(ii)
(A) For a year (or portion of a year) before 2004, 2.5 percent; and
(B) For 2004 and thereafter, 3.0 percent.
(4)
(i) Apply paragraph (d)(1) of this section to a bill for these services related to an outpatient encounter (rather than for a specific service or group of
(ii) Use an appropriate cost-to-charge ratio for the hospital or CMHC (as determined by CMS), rather than for specific departments within the hospital.
(5)
(i) CMS may specify an alternative to the overall ancillary cost-to-charge ratio otherwise applicable under paragraph (d)(5)(ii) of this section. A hospital may also request that its Medicare contractor use a different (higher or lower) cost-to-charge ratio based on substantial evidence presented by the hospital. Such a request must be approved by the CMS.
(ii) The overall ancillary cost-to-charge ratio applied at the time a claim is processed is based on either the most recent settled cost report or the most recent tentative settled cost report, whichever is from the latest cost reporting period.
(iii) The Medicare contractor may use a statewide average cost-to-charge ratio if it is unable to determine an accurate overall ancillary cost-to-charge ratio for a hospital in one of the following circumstances:
(A) A new hospital that has not yet submitted its first Medicare cost report. (For purposes of this paragraph, a new hospital is defined as an entity that has not accepted assignment of an existing hospital's provider agreement in accordance with § 489.18 of this chapter.)
(B) A hospital whose overall ancillary cost-to-charge ratio is in excess of 3 standard deviations above the corresponding national geometric mean. This mean is recalculated annually by CMS and published in the annual notice of prospective payment rates issued in accordance with § 419.50(a).
(C) Any other hospital for whom accurate data to calculate an overall ancillary cost-to-charge ratio are not available to the Medicare contractor.
(6)
(i) Any reconciliation of outlier payments will be based on an overall ancillary cost-to-charge ratio calculated based on a ratio of costs to charges computed from the relevant cost report and charge data determined at the time the cost report coinciding with the service is settled.
(ii) At the time of any reconciliation under paragraph (d)(6)(i) of this section, outlier payments may be adjusted to account for the time value of any underpayments or overpayments. Any adjustment will be based on a widely available index to be established in advance by CMS, and will be applied from the midpoint of the cost reporting period to the date of reconciliation.
(e)
(f)
(1) Drugs and biologicals that are paid under a separate APC; and
(2) Items and services paid at charges adjusted to costs by application of a hospital-specific cost-to-charge ratio.
(g)
(i) Is a sole community hospital under § 412.92 of this chapter or is an essential access community hospital under § 412.109 of this chapter; and
(ii) Is located in a rural area as defined in § 412.64(b) of this chapter or is treated as being located in a rural area under § 412.103 of this chapter.
(2)
(3)
(4)
(i) Drugs and biologicals that are paid under a separate APC;
(ii) Devices paid under 419.66; and
(iii) Items and services paid at charges adjusted to costs by application of a hospital-specific cost-to-charge ratio.
(5)
(6)
(h)
(2)
(3)
(4)
(a)
(1) The full amounts for the procedure with the highest APC payment rate; and
(2) One-half of the full program and the beneficiary payment amounts for all other covered procedures.
(b)
(1) The full program and beneficiary copayment amounts if the procedure for which anesthesia is planned is discontinued after the induction of anesthesia or after the procedure is started;
(2) One-half the full program and the beneficiary copayment amounts if the procedure for which anesthesia is planned is discontinued after the patient is prepared and taken to the room where the procedure is to be performed but before anesthesia is induced; or
(3) One-half of the full program and beneficiary copayment amounts if a procedure for which anesthesia is not
(a)
(1) The device is replaced without cost to the provider or the beneficiary;
(2) The provider receives full credit for the cost of a replaced device; or
(3) The provider receives partial credit for the cost of a replaced device but only where the amount of the device credit is greater than or equal to 50 percent of the cost of the new replacement device being implanted.
(b)
(2) The amount of the reduction to the APC payment made under paragraph (a)(3) of this section is 50 percent of the offset amount that would be applied if the device implanted during a procedure assigned to the APC had transitional pass-through status under § 419.66.
(c)
(a)
(b)
(c)
There can be no administrative or judicial review under sections 1869 and 1878 of the Act or otherwise of the following:
(a) The development of the APC system, including—
(1) Establishment of the groups and relative payment weights;
(2) Wage adjustment factors;
(3) Other adjustments; and
(4) Methods for controlling unnecessary increases in volume.
(b) The calculation of base amounts described in section 1833(t)(3) of the Act.
(c) Periodic adjustments described in section 1833(t)(9) of the Act.
(d) The establishment of a separate conversion factor for hospitals described in section 1886(d)(1)(B)(v) of the Act.
(e) The determination of the fixed multiple, or a fixed dollar cutoff amount, the marginal cost of care, or applicable percentage under § 419.43(d) or the determination of insignificance of cost, the duration of the additional
(a)
(b)
(c)
(2) The applicable percentages are as follows:
(i) For a year before CY 2004, the applicable percentage is 2.5 percent.
(ii) For 2004 and subsequent years, the applicable percentage is a percentage specified by CMS up to (but not to exceed) 2.0 percent.
(d)
At 66 FR 55865, Nov. 2, 2001, § 419.62 was amended by adding paragraph (d), effective Jan. 1, 2002. At 66 FR 67494, Dec. 31, 2001, the amendment was delayed indefinitely.
(a)
(1)
(2)
(3)
(4)
(i) It was first payable as an outpatient hospital service after December 31, 1996.
(ii) CMS has determined the cost of the drug or biological is not insignificant in relation to the amount payable for the applicable APC (as calculated under § 419.32(c)) as defined in paragraph (b) of this section.
(iii) A biological that is not surgically implanted or inserted into the body.
(iv) A biological that is surgically implanted or inserted into the body, for which pass-through payment as a biological is made on or before December 31, 2009.
(b)
(1)
(2)
(i) The estimated average reasonable cost of the drug or biological in the category exceeds 10 percent of the applicable APC payment amount for the service related to the drug or biological.
(ii) The estimated average reasonable cost of the drug or biological exceeds the cost of the drug or biological portion of the APC payment amount for the related service by at least 25 percent.
(iii) The difference between the estimated reasonable cost of the drug or biological and the estimated portion of the APC payment amount for the drug or biological exceeds 10 percent of the APC payment amount for the related service.
(c)
(1) For a drug or biological described in paragraphs (a)(1) through (a)(3) of this section—August 1, 2000.
(2) For a drug or biological described in paragraph (a)(4) of this section—the date that CMS makes its first pass-through payment for the drug or biological.
(d)
(a)
(b)
(1) If required by the FDA, the device must have received FDA approval or clearance (except for a device that has received an FDA investigational device exemption (IDE) and has been classified as a Category B device by the FDA in accordance with §§ 405.203 through 405.207 and 405.211 through 405.215 of this chapter) or another appropriate FDA exemption.
(2) The device is determined to be reasonable and necessary for the diagnosis or treatment of an illness or injury or to improve the functioning of a malformed body part (as required by section 1862(a)(1)(A) of the Act).
(3) The device is an integral and subordinate part of the service furnished, is used for one patient only, comes in contact with human tissue, and is surgically implanted or inserted whether or not it remains with the patient when the patient is released from the hospital.
(4) The device is not any of the following:
(i) Equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciable assets as defined in Chapter 1 of the Medicare Provider Reimbursement Manual (CMS Pub. 15-1).
(ii) A material or supply furnished incident to a service (for example, a suture, customized surgical kit, or clip, other than radiological site marker).
(iii) A material that may be used to replace human skin (for example, a biological skin replacement material or synthetic skin replacement material).
(c)
(1) CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996.
(2) CMS determines that a device to be included in the category has demonstrated that it will substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part compared to the benefits of a device or devices in a previously established category or other available treatment.
(3) Except for medical devices identified in paragraph (e) of this section, CMS determines the cost of the device is not insignificant as described in paragraph (d) of this section.
(d)
(1) The estimated average reasonable cost of devices in the category exceeds 25 percent of the applicable APC payment amount for the service related to the category of devices.
(2) The estimated average reasonable cost of the devices in the category exceeds the cost of the device-related portion of the APC payment amount for the related service by at least 25 percent.
(3) The difference between the estimated average reasonable cost of the devices in the category and the portion of the APC payment amount for the device exceeds 10 percent of the APC payment amount for the related service.
(e)
(1) A device of brachytherapy.
(2) A device of temperature-monitored cryoablation.
(f)
(1) Matches the long descriptor of the category code established by CMS.
(2) Conforms to guidance issued by CMS relating to the definition of terms and other information in conjunction with the category descriptors and codes.
(g)
(h)
(a)
(1) At least 90 percent, but less than 100 percent, of the pre-BBA amount (as defined in paragraph (f) of this section), the amount of payment under this part is increased by 80 percent of the amount of this difference;
(2) At least 80 percent, but less than 90 percent, of the pre-BBA amount, the amount of payment under this part is increased by the amount by which the product of 0.71 and the pre-BBA amount exceeds the product of 0.70 and
(3) At least 70 percent, but less than 80 percent, of the pre-BBA amount, the amount of payment under this part is increased by the amount by which the product of 0.63 and the pre-BBA amount, exceeds the product of 0.60 and the PPS amount; or
(4) Less than 70 percent of the pre-BBA amount, the amount of payment under this part shall be increased by 21 percent of the pre-BBA amount.
(b)
(1) At least 90 percent, but less than 100 percent, of the pre-BBA amount, the amount of payment under this part is increased by 70 percent of the amount of this difference;
(2) At least 80 percent, but less than 90 percent, of the pre-BBA amount, the amount of payment under this part is increased by the amount by which the product of 0.61 and the pre-BBA amount exceeds the product of 0.60 and the prospective payment system amount; or
(3) Less than 80 percent of the pre-BBA amount, the amount of payment under this part is increased by 13 percent of the pre-BBA amount.
(c)
(1) At least 90 percent, but less than 100 percent, of the pre-BBA amount, the amount of payment under this part is increased by 60 percent of the amount of this difference; or
(2) Less than 90 percent of the pre-BBA amount, the amount of payment under this part is increased by 6 percent of the pre-BBA amount.
(d)
(i) Is located in a rural area as defined in § 412.64(b) of this chapter or is treated as being located in a rural area under section 1886(d)(8)(E) of the Act; and
(ii) Has 100 or fewer beds as defined in § 412.105(b) of this chapter.
(2)
(i) Is located in a rural area as defined in § 412.64(b) of this chapter or is treated as being located in a rural area under section 1886(d)(8)(E) of the Act;
(ii) Has 100 or fewer beds as defined in § 412.105(b) of this chapter;
(iii) Is not a sole community hospital as defined in § 412.92 of this chapter; and
(iv) Is not an essential access community hospital under § 412.109 of this chapter.
(3)
(4)
(i) Is a sole community hospital, under § 412.92 of this chapter; and
(ii) Is located in a rural area as defined in § 412.63(b) or § 412.64(b), as applicable, of this chapter or is treated as being located in a rural area under section 1886(d)(8)(E) of the Act.
(5)
(i) Is a sole community hospital as defined in § 412.92 of this chapter or is an essential access community hospital as described under § 412.109 of this chapter; and
(ii) Has 100 or fewer beds as defined in § 412.105(b) of this chapter.
(6)
(e)
(f)
(2)
(i) The provider's payment under this part for covered outpatient services furnished during one of the following periods, including any payment for these services through cost-sharing described in paragraph (e) of this section:
(A) The cost reporting period ending in 1996; or
(B) If the provider does not have a cost reporting period ending in 1996, the first cost reporting period ending on or after January 1, 1997, and before January 1, 2001; and
(ii) The reasonable costs of these services for the same cost reporting period.
(g)
(h)
(i)
(1) Are not considered an adjustment under § 419.43(f); and
(2) Are not implemented in a budget neutral manner.
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
This part sets forth requirements for Medicare providers, intermediaries, and carriers to disclose ownership and control information. It also deals with access to records pertaining to certain contracts entered into by Medicare providers. These rules are aimed at protecting the integrity of the Medicare program. The statutory basis for these requirements is explained in each of the other subparts.
(a)
(b)
This subpart implements sections 1124, 1124A, 1126, and 1861(v)(1)(i) of the Social Security Act. It sets forth requirements for providers, Part B suppliers, intermediaries, and carriers to disclose ownership and control information and the identities of managing employees. It also sets forth requirements for disclosure of information about a provider's or Part B supplier's owners, those with a controlling interest, or managing employees convicted of criminal offenses against Medicare, Medicaid, or the title V (Maternal and
As used in this subpart unless the context indicates otherwise:
(1) A provider of services, an independent clinical laboratory, a renal disease facility, a rural health clinic, a Federally qualified health center, or a health maintenance organization (as defined in section 1301(a) of the Public Health Service Act);
(2) A carrier or other agency or organization that is acting for one or more providers of services for purposes of part A and part B of Medicare; and
(3) A part B supplier, as defined in § 400.202 of this chapter.
(1) An entity (other than an individual practitioner or group of practitioners) that furnishes, or arranges for the furnishing of, items or services for which payment may be claimed by the entity under any plan or program established under title V of the Social Security Act or under an approved State Medicaid plan;
(2) An entity (other than an individual practitioner or group of practitioners) that furnishes, or arranges for the furnishing of, health-related services for which payment may be claimed by the entity under an approved State plan and services program under title XX of the Act; or
(3) A Medicaid fiscal agent.
(1) Has an ownership interest totaling 5 percent or more in a disclosing entity;
(2) Has an indirect ownership interest equal to 5 percent or more in a disclosing entity;
(3) Has a combination of direct and indirect ownership interests equal to 5 percent or more in a disclosing entity;
(4) Owns an interest of 5 percent or more in any mortgage, deed of trust, note, or other obligation secured by the disclosing entity if that interest equals at least 5 percent of the value of the property or assets of the disclosing entity;
(5) Is an officer or director of a disclosing entity that is organized as a corporation; or
(6) Is a partner in a disclosing entity that is organized as a partnership.
(1) An individual, agency, or organization to which a disclosing entity has contracted or delegated some of its management functions or responsibilities of providing medical care to its patients; or
(2) An individual, agency, or organization with which an intermediary or
(a)
(b)
A provider must notify the Secretary promptly if it, or its home office (in the case of a chain organization), employs or obtains the services of an individual who, at any time during the year preceding such employment, was employed in a managerial, accounting, auditing, or similar capacity by an agency or organization which currently serves, or at any time during the preceding year, served as a Medicare fiscal intermediary or carrier for the provider.
(a)
(1) Has an ownership or control interest in the provider or part B supplier;
(2) Is an agent or managing employee of the provider or part B supplier; or
(3) Is a person identified in paragraph (a)(1) or (a)(2) of this section and has been convicted of, or was an owner of, had a controlling interest in, or was a managing employee of a corporation that has been convicted of a criminal offense, subjected to any civil monetary penalty, or excluded from the programs for any activities related to involvement in the Medicare, Medicaid, title V or title XX social services program, since the inception of those programs.
(b)
(c)
A provider or part B supplier must submit to CMS, within 35 days after the date of a written request, full and complete information on—
(a) The ownership of a subcontractor with which the provider or part B supplier has had, during the previous 12 months, business transactions in an aggregate amount in excess of $25,000;
(b) Any significant business transactions between the provider or part B supplier and any wholly owned supplier or between the provider or part B supplier and any subcontractor, during the 5 year period ending on the date of the request;
(c) The names of managing employees of the subcontractors;
(d) The identity of any other entities to which payment may be made by Medicare, which a person with an ownership or control interest or a managing employee in the subcontractor has or has had an ownership or control interest in the 3-year period preceding disclosure; and
(e) Any penalties, assessments, or exclusions under sections 1128, 1128A and 1128B of the Act incurred by the subcontractor, its owners, managing employees or those with a controlling interest in the subcontract.
(a)
(1) The name and address of each person with an ownership or control interest in the entity or in any subcontractor in which the entity has direct or indirect ownership interest totaling 5 percent or more. In the case of a part B supplier that is a joint venture, ownership of 5 percent or more of any company participating in the joint venture should be reported. Any physician who has been issued a Unique Physician Identification Number by the Medicare program must provide this number.
(2) Whether any of the persons named, in compliance with paragraph (a)(1) of this section, is related to another as spouse, parent, child, or sibling.
(3) The name of any other disclosing entity in which any person with an ownership or control interest, or who is a managing employee in the reporting disclosing entity, has, or has had in the previous three-year period, an ownership or control interest or position as managing employee, and the nature of the relationship with the other disclosing entity. If any of these other disclosing entities has been convicted of a criminal offense or received a civil monetary or other administrative sanction related to participation in Medicare, Medicaid, title V (Maternal and Child Health) or title XX (Social Services) programs, such as penalties assessments and exclusions under sections 1128, 1128A or 1128B of the Act, the disclosing entity must also provide that information.
(b)
(2) Any disclosing entity that is not subject to periodic survey and certification must supply the information specified in paragraph (a) of this section to CMS before entering into a contract or agreement with Medicare or
(3) A disclosing entity must furnish updated information to CMS at intervals between recertification, or re-enrollment, or contract renewals, within 35 days of a written request. In the case of a part B supplier, the supplier must report also within 35 days, on its own initiative, any changes in the information it previously supplied.
(c)
(2) CMS terminates any existing agreement or contract with, or withdraws a determination of eligibility for or (in the case of a part B supplier) revokes the billing number of, any disclosing entity that fails to comply with paragraph (b) of this section.
(d)
This subpart implements section 1861(v)(1)(I) of the Act, which requires, for Medicare payment under certain provider contracts, access by the Secretary, upon written request, and the Comptroller General, and their duly authorized representatives, to certain contracts for services and to books, documents, and records necessary to verify the costs of the services. The contracts affected are those between providers and their subcontractors, and between the subcontractors and organizations related to the subcontractor by control or common ownership. It also specifies the criteria by which HHS will determine whether to request access to books, documents, and records.
For purposes of this subpart—
(a)
(1) Between a provider and a subcontractor and, where subject to section 1861(v)(l)(I)(ii) of the Act, between a subcontractor and an organization related to the subcontractor;
(2) Entered into or renewed after December 5, 1980; and
(3) For services the cost or value of which is $10,000 or more over a 12-month period, including contracts for both goods and services in which the service component is worth $10,000 or more over a 12-month period.
(b)
(c)
HHS will generally request books, documents, and records from a subcontractor only if one of the following situations exists and the question cannot satisfactorily and efficiently be resolved without access to the books, documents, and records:
(a) HHS has reason to believe that the costs claimed for services of the subcontractor are excessive or inappropriate.
(b) There is insufficient information to judge the appropriateness of the costs.
(c) There is a written accusation with suitable evidence against the provider or subcontractor of kickbacks, bribes, rebates, or other illegal activities.
(d) There is evidence of a possible nondisclosure of the existence of a related organization.
(a)
(1) Reasonable identification of the books, documents, and records to which access is being requested.
(2) Identification of the contract or subcontract in which costs are being questioned as excessive or inappropriate.
(3) The reason that the appropriateness of the costs or value of the services of the subcontractor in question cannot be adequately or efficiently determined without access to the subcontractor's books and records.
(4) The authority in the statute and regulations for the access requested.
(5) To the extent possible, the identification of those individuals who will be visiting the subcontractor to obtain access to the books, documents, and records.
(6) The time and date of the scheduled visit.
(7) The name of the duly authorized representative of HHS to contact if there are any questions.
(b)
(2) If the subcontractor believes the request is inadequate because it does not fully meet one or more of the required elements in paragraph (a) of this section, the subcontractor must advise the requesting organization of the additional information needed.
(i) The subcontractor must notify the requesting organization within 20 days of the date of the request that it was improperly completed.
(ii) The subcontractor must make the books, documents, and records available within 20 days after the date of the requesting organization's response.
(3) If the subcontractor believes, for good cause, that the requested books, documents, and records cannot be made available as requested with the 30-day period under paragraph (b)(1) of this section, the subcontractor may request an extension of time within which to comply with the request from the requesting organization. The requesting organization may, at its discretion, grant the request for an extension, in whole or in part, for good cause shown.
(4) The subcontractor must make the books, documents, and records available during its regular business hours for inspection, audit, and reproduction.
(5) If HHS asks the subcontractor to reproduce books, documents, and records, HHS will pay the reasonable cost of reproduction. However, if the subcontractor reproduces books, documents, and records as a means of making them available, the subcontractor must bear the cost of the reproduction and no Medicare reimbursement will be made for that purpose.
(6) HHS reserves the right to examine the originals of any requested contracts, books, documents, and records, if they exist.
(c)
This subpart implements sections 203(b) and (c) of Public Law 104-191, which require the establishment of programs to encourage individuals to report suspected cases of fraud and abuse and submit suggestions on methods to improve the efficiency of the Medicare program. Sections 203(b) and (c) of Public Law 104-191 also provide the authority for CMS to reward individuals for reporting fraud and abuse and for submitting suggestions that could improve the efficiency of the Medicare program. This subpart sets forth procedures for rewarding individuals.
(a)
(b)
(2) CMS does not give a reward for information relating to an individual or entity that, at the time the information is provided, is already the subject of a review or investigation by CMS or its contractors, or the OIG, the Department of Justice, the Federal Bureau of Investigation, or any other Federal, State, or local law enforcement agency.
(c)
(2)
(ii) Any other Federal or State employee or contractor or an HHS grantee is not eligible for a reward under this section if the information submitted came to his or her knowledge in the course of his or her official duties.
(iii) An individual who illegally obtained the information he or she submitted is excluded from receiving a reward under this section.
(iv) An individual who participated in the sanctionable offense with respect to which payment would be made is excluded from receiving a reward under this section.
(d)
(2)
(ii) If the individual has become incapacitated or has died, an executor, administrator, or other legal representative may claim the reward on behalf of the individual or the individual's estate. The claimant must submit certified copies of the letters testamentary, letters of administration, or other similar evidence to show his or her authority to claim the reward. The claim must be filed within 1 year from the date on which CMS first gave or attempted to give notice of the reward.
(e)
(2) The amount of a reward represents what CMS considers to be adequate compensation in the particular case, not to exceed 10 percent of the overpayments recovered in the case or $1,000, whichever is less.
(3) If more than one person is eligible to receive a reward in a particular case, CMS allocates the total reward amount (not to exceed 10 percent of the overpayments recovered in that case or $1,000, whichever is less) among the participants.
(4) CMS bases rewards only on recovered Medicare payments and not on amounts collected as penalties or fines.
(5) CMS makes payments as promptly as the circumstances of the case permit, but not until it has collected all Medicare overpayments, fines, and penalties.
(6) No person may make any offer or promise or otherwise bind CMS or HHS with respect to the payment of any reward under this section or the amount of the reward.
(f)
(2) A participant interested in receiving a reward must provide his or her name, address, telephone number, and any other requested identifying information so that he or she may be contacted, if necessary, for additional information and, when applicable, for the payment of a reward upon resolution of the case.
(g)
(h)
(a)
(b)
(c)
(d)
(e)
(i) A description of an existing problem or need;
(ii) A suggested method for solving the problem or filling the need; and
(iii) If known, an estimate of the savings potential that could result from implementing the suggestion.
(2) Suggestions must be mailed to: Centers for Medicare & Medicaid Services Suggestion Program, 7500 Security Blvd., Baltimore, Maryland 21244-1850.
(3) Any suggesters interested in receiving a reward must provide CMS with the following information: An individual suggester must provide his or her name, a group of suggesters must provide the names of all the group members, and a legal entity must provide its name and the name of its representative. All suggesters must provide an address, telephone number, and any other identifying information that CMS needs to contact the suggester for additional information and, where applicable, to mail the reward.
(f)
(i) Originality of suggestion.
(ii) An estimate of potential monetary savings to the Medicare program.
(iii) The extent to which Medicare program efficiency would be improved if CMS adopts the suggestion.
(iv) Accuracy of the information reflected in the suggestion.
(v) Feasibility of implementation.
(vi) Nature and complexity of the suggestion.
(vii) Any other factors that appear to be relevant.
(2)
(g)
(i) The actual first-year net savings to the Medicare program, or
(ii) The average annual net savings to the Medicare program expected to be realized over a period of not more than 3 years if—
(A) An improvement is expected to yield monetary savings for more than 1 year and implementation involves substantial costs; or
(B) Monetary savings are negligible in the first year but are expected to substantially increase in subsequent years.
(2)
(i) Net savings from $1,000 to $10,000—10 percent of the savings, with a minimum award amount of $100;
(ii) Net savings of $10,001 to $100,000—$1,000 for the first $10,000 of savings, plus 3 percent of the net savings over $10,000;
(iii) Net savings of more than $100,000—$3,700 for the first $100,000 of savings, plus 0.5 percent of savings over $100,000, with a maximum award amount of $25,000.
(h)
(2)
(i)
(j)
(k)
(l)
(2) CMS does not disclose information submitted under the suggestion program, except as required by law.
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
(a)
Section 1124—Requirements for disclosure of certain information.
Sections 1816 and 1842—Provisions relating to the administration of Parts A and B.
Section 1893—Requirements for protecting the integrity of the Medicare program.
(b)
(c)
(1) Specifies that CMS may perform certain functions directly or by contract.
(2) Specifies criteria and standards CMS uses in evaluating the performance of fiscal intermediaries' successor entities and in assigning or reassigning a provider or providers to particular fiscal intermediaries.
(3) Provides the opportunity for a hearing for fiscal intermediaries and carriers affected by certain adverse actions.
(4) Provides adversely affected fiscal intermediaries an opportunity for judicial review of certain hearing decisions.
(5) Sets forth requirements related to contracts with Medicare integrity program contractors.
As used in this part—
(a)
(b)
(c)
(d)
(e)
(f)
An agreement between CMS and an intermediary specifies the functions to be performed by the intermediary.
(a)
(1) Determining the amount of payments to be made to providers for covered services furnished to Medicare beneficiaries.
(2) Making the payments.
(b)
(1) Any or all of the program integrity functions described in § 421.304, provided the intermediary is continuing those functions under an agreement entered into under section 1816 of the Act that was in effect on August 21, 1996, and they do not duplicate work being performed under a Medicare integrity program contract.
(2) Undertaking to adjust incorrect payments and recover overpayments when it is determined that an overpayment was made.
(3) Furnishing to CMS timely information and reports that CMS requests in order to carry out its responsibilities in the administration of the Medicare program.
(4) Establishing and maintaining procedures as approved by CMS for the redetermination of payment determinations.
(5) Maintaining records and making available to CMS the records necessary for verification of payments and for other related purposes.
(6) Upon inquiry, assisting individuals for matters pertaining to an intermediary agreement.
(7) Serving as a channel of communication to and from CMS of information, instructions, and other material as necessary for the effective and efficient performance of an intermediary agreement.
(8) Undertaking other functions as mutually agreed to by CMS and the intermediary.
(c)
Providers are assigned to intermediaries in accordance with § 421.104. As the Medicare Administrative Contractors (MACs) are implemented, providers are reassigned from intermediaries to MACs in accordance with § 412.404 of this chapter.
(a) Beginning October 1, 2005, CMS assigns providers of services and other entities that may bill Part A benefits to intermediaries in a manner that will best support the transition to Medicare Administrative Contractors (MACs) under section 1874A of the Act in accordance with subpart E of this part.
(b) These providers of services and other entities must continue to bill the intermediary that they were billing prior to October 1, 2005, until one of the following events occurs:
(1) The intermediary's agreement with CMS ends, and the provider or entity is directed by CMS to bill another CMS contractor.
(2) The provider or entity is assigned to a MAC that has begun to administer claims within the geographic locale of the provider or entity.
(3) CMS directs the provider or entity to begin billing another CMS contractor in order to support the implementation of MACs under section 1874A of the Act and subpart E of this part.
(c) New providers of services and new entities will be assigned to the intermediary serving their geographic locale if no MAC has begun to administer Medicare claims in the locale. These providers or entities must continue to bill the intermediary until one of the events in paragraph (b) of this section occurs.
(d) Providers or entities will only be granted exceptions to the provisions of paragraphs (b) or (c) of this section if CMS deems the exception to be in the compelling interest of the Medicare program.
(e) CMS will notify the provider or entity, the outgoing intermediary, and the newly assigned intermediary of assignment or reassignment decisions.
Before entering into or renewing an intermediary agreement, CMS will—
(a) Determine that to do so is consistent with the effective and efficient administration of the Medicare program;
(b) Review the performance of the intermediary as measured by the criteria (§ 421.120) and standards (§ 421.122); and
(c) Determine that the intermediary or prospective intermediary—
(1) Is willing and able to assist providers in the application of safeguards against unnecessary utilization of services;
(2) Meets all solvency and financial responsibility requirements imposed by the statutes and regulatory authorities of the State or States in which it, or any subcontractor performing some or all of its functions, would serve;
(3) Has the overall resources and experience to administer its responsibilities under the Medicare program and has an existing operational, statistical, and recordkeeping capacity to carry out the additional program responsibilities it proposes to assume. CMS will presume that an intermediary or prospective intermediary meets this requirement if it has at least 5 years experience in paying for or reimbursing the cost of health services;
(4) Will serve a sufficient number of providers to permit a finding of effective and efficient administration. Under this criterion no intermediary or prospective intermediary shall be found to be not efficient or effective solely on the grounds that it serves only providers located in a single State;
(5) Has acted in good faith to achieve effective cooperation with the providers it will service and with the physicians and medical societies in the area;
(6) Has established a record of integrity and satisfactory service to the public; and
(7) Has an affirmative equal employment opportunity program that complies with the fair employment provisions of the Civil Rights Act of 1964 and Executive Order 11246, as amended.
(a) In order to accomplish the most effective and efficient administration of the Medicare program, the Secretary may make determinations with respect to the termination of an intermediary agreement, and CMS may make determinations with respect to renewal of an intermediary agreement under § 421.110.
(b) When taking the actions specified in paragraph (a) of this section, the Secretary or CMS will consider the performance of the individual intermediary in its Medicare operations using the factors contained in the performance criteria specified in § 421.120 and the performance standards specified in § 421.122.
(c) In addition, when taking the actions listed in paragraph (a) of this section, the Secretary or CMS may consider factors relating to—
(1) Consistency in the administration of program policy;
(2) Development of intermediary expertise in difficult areas of program administration;
(3) Individual capacity of available intermediaries to serve providers as it is affected by such considerations as—
(i) Program emphasis on the number or type of providers to be served; or
(ii) Changes in data processing technology;
(4) Overdependence of the program on the capacity of an intermediary to an extent that services could be interrupted;
(5) Economy in the delivery of intermediary services;
(6) Timeliness in the delivery of intermediary services;
(7) Duplication in the availability of intermediaries;
(8) Conflict of interest between an intermediary and provider; and
(9) Any additional pertinent factors.
CMS may assign or reassign any provider to any intermediary if it determines that the assignment or reassignment will be in the best interests of the Medicare program.
(a)
(1) Correct coverage and payment determinations;
(2) Responsiveness to beneficiary concerns; and
(3) Proper management of administrative funds.
(b)
(1) Nationwide intermediary experience;
(2) Changes in intermediary operations due to fiscal constraints; and
(3) HFCA's objectives in achieving better performance.
(c)
(a)
(b)
(1) Study the performance of intermediaries during the base period, and
(2) Consider the noncontrollable factors in developing performance standards.
(c)
(a) Failure by an intermediary to meet, or to demonstrate the capacity to meet, the criteria or standards specified in §§ 421.120 and 421.122 may be grounds for adverse action by the Secretary or by CMS, such as reassignment of providers, offer of a short-term agreement, termination of a contract, or non-renewal of a contract. If an intermediary meets all criteria and standards in its overall performance, but does not meet them with respect to a specific provider or class of providers, CMS may reassign that provider or class of providers to another intermediary in accordance with § 421.114.
(b) In addition, notwithstanding whether an intermediary meets the criteria and standards, if the cost incurred by the intermediary to meet its contractual requirements exceeds the amount which CMS finds to be reasonable and adequate to meet the cost which must be incurred by an efficiently and economically operated intermediary, those high costs may also be grounds for adverse action.
(a)
(1) Giving written notice of its intention to CMS and to the providers it services at least 180 days before its intended termination date; and
(2) Giving public notice of its intention by publishing a statement of the effective date of termination at least 60 days before that date. Publication must be in a newspaper of general circulation in each community served by the intermediary.
(b)
(i) The intermediary fails to comply with the requirements of this subpart;
(ii) The intermediary fails to meet the criteria or standards specified in §§ 421.120 and 421.122; or
(iii) CMS has reassigned, under § 421.114 or § 421.116, all of the providers assigned to the intermediary.
(2) If the Secretary decides to terminate an agreement, he or she will offer the intermediary an opportunity for a hearing, in accordance with § 421.128.
(3) If the intermediary does not request a hearing, or if the hearing decision affirms the Secretary's decision, the Secretary will provide reasonable notice of the effective date of termination to—
(i) The intermediary;
(ii) The providers served by the intermediary; and
(iii) The general public.
(4) The providers served by the intermediary will be given the opportunity to nominate another intermediary, in accordance with § 421.104.
(a)
(1) Assignment or reassignment of providers to another intermediary.
(2) Designation of a national or regional intermediary to serve a class of providers.
(3) Termination of the agreement.
(b)
(c)
(d)
(e) As specified in § 421.118, contracts awarded under the experimental authority of CMS are not subject to the provisions of this section.
(f)
A contract between CMS and a carrier specifies the functions to be performed by the carrier. The contract may include any or all of the following functions:
(a) Any or all of the program integrity functions described in § 421.304 provided the following conditions are met:
(1) The carrier is continuing those functions under a contract entered into under section 1842 of the Act that was in effect on August 21, 1996.
(2) The functions do not duplicate work being performed under a Medicare integrity program contract, except that the function related to developing and maintaining a list of DME may be performed under both a carrier contract and a Medicare integrity program contract.
(b) Receiving, disbursing, and accounting for funds in making payments for services furnished to eligible individuals within the jurisdiction of the carrier.
(c) Determining the amount of payment for services furnished to an eligible individual.
(d) Undertaking to adjust incorrect payments and recover overpayments when it is determined that an overpayment was made.
(e) Furnishing to CMS timely information and reports that CMS requests in order to carry out its responsibilities in the administration of the Medicare program.
(f) Maintaining records and making available to CMS the records necessary for verification of payments and for other related purposes.
(g) Establishing and maintaining procedures under which an individual enrolled under Part B is granted an opportunity for a redetermination.
(h) Upon inquiry, assisting individuals with matters pertaining to a carrier contract.
(i) Serving as a channel of communication to and from CMS of information, instructions, and other material as necessary for the effective and efficient performance of a carrier contract.
(j) Undertaking other functions as mutually agreed to by CMS and the carrier.
(a)
(1) The criteria measure and evaluate carrier performance of functional responsibilities such as—
(i) Accurate and timely payment determinations;
(ii) Responsiveness to beneficiary, physician, and supplier concerns; and
(iii) Proper management of administrative funds.
(2) The standards evaluate the specific requirements of each functional responsibility or criterion.
(b)
(1) Nationwide carrier experience;
(2) Changes in carrier operations due to fiscal constraints; and
(3) CMS's objectives in achieving better performance.
(c)
Before entering into or renewing a carrier contract, CMS determines that the carrier—
(a) Has the capacity to perform its contractual responsibilities effectively and efficiently;
(b) Has the financial responsibility and legal authority necessary to carry out its responsibilities; and
(c) Will be able to meet any other requirements CMS considers pertinent, and, if designated a regional DMEPOS carrier, any special requirements for regional carriers under § 421.210 of this subpart.
(a) Failure by a carrier to meet, or demonstrate the capacity to meet, the criteria and standards specified in § 421.201 may be grounds for adverse action by the Secretary, such as contract termination or non-renewal.
(b) Notwithstanding whether or not a carrier meets the criteria and standards specified in § 421.201, if the cost incurred by the carrier to meet its contractual requirements exceeds the amount that CMS finds to be reasonable and adequate to meet the cost which must be incurred by an efficiently and economically operated carrier, those high costs may also be grounds for adverse action.
(a)
(b)
(c)
(a)
(b)
(1) Durable medical equipment (and related supplies) as defined in section 1861(n) of the Act;
(2) Prosthetic devices (and related supplies) as described in section 1861(s)(8) of the Act, (including intraocular lenses and parenteral and enteral nutrients, supplies, and equipment, when furnished under the prosthetic device benefit);
(3) Orthotics and prosthetics (and related supplies) as described in section 1861(s)(9);
(4) Home dialysis supplies and equipment as described in section 1861(s)(2)(F);
(5) Surgical dressings and other devices as described in section 1861(s)(5);
(6) Immunosuppressive drugs as described in section 1861(s)(2)(J); and
(7) Other items or services which are designated by CMS.
(c)
(i) Region A: Maine, New Hampshire, Vermont, Massachusetts, Connecticut, Rhode Island, New York, New Jersey, Pennsylvania, and Delaware.
(ii) Region B: Maryland, the District of Columbia, Virginia, West Virginia, Ohio, Michigan, Indiana, Illinois, Wisconsin, and Minnesota.
(iii) Region C: North Carolina, South Carolina, Kentucky, Tennessee, Georgia, Florida, Alabama, Mississippi, Louisiana, Texas, Arkansas, Oklahoma, New Mexico, Colorado, Puerto Rico, and the Virgin Islands.
(iv) Region D: Alaska, Hawaii, American Samoa, Guam, the Northern Mariana Islands, California, Nevada, Arizona, Washington, Oregon, Montana, Idaho, Utah, Wyoming, North Dakota, South Dakota, Nebraska, Kansas, Iowa, and Missouri.
(2) CMS has the option to modify the number and boundaries of the regions established in paragraph (c)(1) of this section based on appropriate criteria and considerations, including the effect of the change on beneficiaries and DMEPOS suppliers. To announce changes, CMS publishes a notice in the
(d)
(1) Timeliness of claim processing;
(2) Cost per claim;
(3) Claim processing quality;
(4) Experience in claim processing, and in establishing local medical review policy; and
(5) Other criteria that CMS believes to be pertinent.
(e)
(2) CMS notifies affected Medicare beneficiaries and suppliers when it designates a regional carrier (in accordance with paragraph (d) of this section) to process DMEPOS claims (as defined in paragraph (b) of this section) for all Medicare beneficiaries residing in their respective regions (as designated under paragraph (c) of this section).
(3) CMS may contract for the performance of National Supplier Clearinghouse functions through a contract amendment to one of the DME regional carrier contracts or through a contract amendment to any Medicare carrier contract under § 421.200.
(4) CMS periodically recompetes the contracts for the DME regional carriers. CMS also periodically recompetes the National Supplier Clearinghouse function.
(f)
In accordance with this subpart C, the Railroad Retirement Board contracts with DMEPOS regional carriers designated by CMS, as set forth in § 421.210(e)(2), for processing claims for Medicare-eligible Railroad Retirement
(a)
(1) Sets forth requirements and procedures for the issuance and recovery of advance payments to suppliers of Part B services and the rights and responsibilities of suppliers under the payment and recovery process.
(2) Does not limit CMS's right to recover unadjusted advance payment balances.
(3) Does not affect suppliers' appeal rights under part 405, subpart H of this chapter relating to substantive determinations on suppliers' claims.
(4) Does not apply to claims for Part B services furnished by suppliers that have in effect provider agreements under section 1866 of the Act and part 489 of this chapter, and are paid by intermediaries.
(b)
(c)
(1) The carrier is unable to process the claim timely.
(2) CMS determines that the prompt payment interest provision specified in section 1842(c) of the Act is insufficient to make a claimant whole.
(3) CMS approves, in writing to the carrier, the making of an advance payment by the carrier.
(d)
(1) Is delinquent in repaying a Medicare overpayment.
(2) Has been advised of being under active medical review or program integrity investigation.
(3) Has not submitted any claims.
(4) Has not accepted claims' assignments within the most recent 180-day period preceding the system malfunction.
(e)
(2) A supplier must accept an advance payment as a conditional payment subject to adjustment, recoupment, or both, based on an eventual determination of the actual amount due on the claim and subject to the provisions of this section.
(f)
(i) A carrier must calculate an advance payment for a particular claim at no more than 80 percent of the anticipated payment for that claim based upon the historical assigned claims payment data for claims paid the supplier.
(ii) “Historical data” are defined as a representative 90-day assigned claims payment trend within the most recent 180-day experience before the system malfunction.
(iii) Based on this amount and the number of claims pending for the supplier, the carrier must determine and issue advance payments.
(iv) If historical data are not available or if backlogged claims cannot be identified, the carrier must determine and issue advance payments based on some other methodology approved by CMS.
(v) Advance payments can be made no more frequently than once every 2 weeks to a supplier.
(2) Generally, a supplier will not receive advance payments for more assigned claims than were paid, on a daily average, for the 90-day period before the system malfunction.
(3) A carrier must recover an advance payment by applying it against the amount due on the claim on which the advance was made. If the advance payment exceeds the Medicare payment amount, the carrier must apply the
(4) In accordance with CMS instructions, a carrier must maintain a financial system of data in accordance with the Statement of Federal Financial Accounting Standards for tracking each advance payment and its recoupment.
(g)
(2) If adjusting Medicare payments fails to recover an advance payment, CMS may authorize the use of any other recoupment method available (for example, lump sum repayment or an extended repayment schedule) including, upon written notice from the carrier to the supplier, converting any unpaid balances of advance payments to overpayments. Overpayments are recovered in accordance with part 401, subpart F of this chapter concerning claims collection and compromise and part 405, subpart C of this chapter concerning recovery of overpayments.
(h)
(i)
(2) The carrier must notify the supplier receiving an advance payment about the amounts advanced and recouped and how any Medicare payment amounts have been adjusted.
(3) The supplier may request an administrative review from the carrier if it believes the carrier's reconciliation of the amounts advanced and recouped is incorrectly computed. If a review is requested, the carrier must provide a written explanation of the adjustments.
(4) The review and explanation described in paragraph (i)(3) of this section is separate from a supplier's right to appeal the amount and computation of benefits paid on the claim, as provided at part 405, subpart H of this chapter. The carrier's reconciliation of amounts advanced and recouped is not an initial determination as defined at § 405.803 of this chapter, and any written explanation of a reconciliation is not subject to further administrative review.
(a)
(b)
(c)
(1) Defines the types of entities eligible to become Medicare integrity program contractors.
(2) Identifies the program integrity functions a Medicare integrity program contractor performs.
(3) Describes procedures for awarding and renewing contracts.
(4) Establishes procedures for identifying, evaluating, and resolving organizational conflicts of interest.
(5) Prescribes responsibilities.
(6) Sets forth limitations on contractor liability.
(a) CMS may enter into a contract with an entity to perform the functions described in § 421.304 if the entity meets the following conditions:
(1) Demonstrates the ability to perform the Medicare integrity program contractor functions described in § 421.304. For purposes of developing and periodically updating a list of DME under § 421.304(e), an entity is deemed to be eligible to enter into a contract under the Medicare integrity program to perform the function if the entity is a carrier with a contract in effect under section 1842 of the Act.
(2) Agrees to cooperate with the OIG, the DOJ, and other law enforcement agencies, as appropriate, including making referrals, in the investigation and deterrence of potential fraud and abuse of the Medicare program.
(3) Complies with conflict of interest provisions in 48 CFR chapters 1 and 3, and is not excluded under the conflict of interest provision at § 421.310.
(4) Maintains an appropriate written code of conduct and compliance policies that include, but are not limited to, an enforced policy on employee conflicts of interest.
(5) Meets other requirements that CMS establishes.
(b) A MAC as described in section 1874A of the Act may perform any or all of the functions described in § 421.304, except that the functions may not duplicate work being performed under a Medicare integrity program contract.
(c) If a MAC performs any or all functions described in § 421.304, CMS may require the MAC to comply with any or all of the requirements of paragraph (a) of this section as a condition of its contract.
The contract between CMS and a Medicare integrity program contractor specifies the functions the contractor performs. The contract may include any or all of the following functions:
(a) Conducting medical reviews, utilization reviews, and reviews of potential fraud related to the activities of providers of services and other individuals and entities (including entities contracting with CMS under parts 417 and 422 of this chapter) furnishing services for which Medicare payment may be made either directly or indirectly.
(b) Auditing, settling and determining cost report payments for providers of services, or other individuals or entities (including entities contracting with CMS under parts 417 and 422 of this chapter), as necessary to help ensure proper Medicare payment.
(c) Determining whether a payment is authorized under title XVIII, as specified in section 1862(b) of the Act, and recovering mistaken and conditional payments under section 1862(b) of the Act.
(d) Educating providers, suppliers, beneficiaries, and other persons regarding payment integrity and benefit quality assurance issues.
(e) Developing, and periodically updating, a list of items of DME that are frequently subject to unnecessary utilization throughout the contractor's entire service area or a portion of the area, in accordance with section 1834(a)(15)(A) of the Act.
(a) CMS awards and administers Medicare integrity program contracts in accordance with acquisition regulations set forth at 48 CFR chapters 1 and 3, this subpart, all other applicable laws, and all applicable regulations. These requirements for awarding Medicare integrity program contracts are used as follows:
(1) When entering into new contracts.
(2) When entering into contracts that may result in the elimination of responsibilities of an individual fiscal intermediary or carrier under section 1816(l) or section 1842(c) of the Act, respectively.
(3) At any other time CMS considers appropriate.
(b) CMS may award an entity a Medicare integrity program contract by transfer if all of the following conditions apply:
(1) Through approval of a novation agreement in accordance with the requirements of the Federal Acquisition Regulation (FAR), CMS recognizes the entity as the successor in interest to a fiscal intermediary agreement or carrier contract under which the fiscal intermediary or carrier was performing activities described in section 1893(b) of the Act on August 21, 1996.
(2) The fiscal intermediary or carrier continued to perform Medicare integrity program activities until transferring the resources to the entity.
(c) An entity is eligible to be awarded a Medicare integrity program contract only if it meets the eligibility requirements specified in § 421.302; 48 CFR chapters 1 and 3; and other applicable laws and regulations.
(a)
(2) Contracts under this subpart may contain renewal clauses.
(3) CMS may, but is not required to, renew the Medicare integrity program contract, without regard to any provision of law requiring competition, as it determines to be appropriate, by giving the contractor notice, within timeframes specified in the contract, of its intent to do so.
(b)
(1) The Medicare integrity program contractor continues to meet the requirements established in this subpart.
(2) The Medicare integrity program contractor meets or exceeds the performance requirements established in its current contract.
(3) It is in the best interest of the government.
(c)
Offerors for MIP contracts and MIP contractors are subject to the following:
(a) The conflict of interest standards and requirements of the Federal Acquisition Regulation (FAR) organizational conflict of interest guidance specified under 48 CFR subpart 9.5.
(b) The standards and requirements as are contained in each individual contract awarded to perform section 1893 of the Act functions.
(a)
(b)
(i) The conflict is mitigated.
(ii) The conflict precludes award of a contract to the offeror.
(iii) It is in the best interest of the government to award a contract to the offeror (in accordance with 48 CFR subpart 9.503) even though a conflict of interest exists.
(2)
(i) The conflict is mitigated.
(ii) The conflict requires that CMS modify an existing contract.
(iii) The conflict requires that CMS terminate or not renew an existing contract.
(iv) It is in the best interest of the government to continue the contract even though a conflict of interest exists.
(a) A MIP contractor, a person or an entity employed by, or having a fiduciary relationship with, or who furnishes professional services to a MIP contractor is not in violation of any criminal law or civilly liable under any law of the United States or of any State (or political subdivision thereof) by reason of the performance of any duty, function, or activity required or authorized under this subpart or under a valid contract entered into under this
(b) CMS pays a contractor, a person or an entity described in paragraph (a) of this section, or anyone who furnishes legal counsel or services to a contractor or person, a sum equal to the reasonable amount of the expenses, as determined by CMS, incurred in connection with the defense of a suit, action, or proceeding, if the following conditions are met:
(1) The suit, action, or proceeding was brought against the contractor, such person or entity by a third party and relates to the contractor's, person's or entity's performance of any duty, function, or activity under a contract entered into with CMS under this subpart.
(2) The funds are available.
(3) The expenses are otherwise allowable under the terms of the contract.
(a)
(b)
For purposes of this subpart—
(1) A particular individual entitled to benefits under Part A or enrolled under Part B, or both;
(2) A specific provider of services or supplier; or
(3) A class of providers of services or suppliers.
(a)
(1) 10 or more eligible providers collectively totaling 500 or more certified beds; or
(2) 5 or more eligible providers collectively totaling 300 or more certified beds, with eligible providers in 3 or more contiguous States.
(b)
(2) Qualified chain providers may request and receive an exception from the requirement of paragraph (b)(1) of this section from CMS. Upon CMS'approval, a qualified chain provider may enroll with and bill on behalf of the eligible providers under its common ownership or common control to the MAC contracted by CMS to administer claims for the Medicare benefit category applicable to the eligible providers'covered services for the geographic locale in which the qualified chain provider's home office is physically located.
(3) As MAC contractors become available, qualified chain providers, granted approval by CMS to enroll with and bill a single intermediary on behalf of their eligible member providers prior to October 1, 2005, will be assigned at an appropriate time to the MAC contracted by CMS to administer claims for the applicable Medicare benefit category for the geographic locale in which the chain provider's home office is physically located. The qualified chain provider will not need to request an exception to the requirement of paragraph (b)(1) of this section in order for this assignment to take effect.
(4) CMS may grant an exception to the requirement of paragraph (b)(1) of this section to eligible providers that are not under the common ownership or common control of a qualified chain provider, as well as ineligible providers, only if CMS finds the exception will support the implementation of MACs or will serve some other compelling interest of the Medicare program.
(c)
(2) Suppliers of DMEPOS receive Medicare payment and other Medicare services from the MAC assigned to administer claims for DMEPOS for the regional area in which the beneficiary receiving the DMEPOS resides. The terms of §§ 421.210 and 421.212 continue to apply to suppliers of DMEPOS.
(3) CMS may allow a group of ESRD suppliers under common ownership and common control to enroll with the MAC contracted by CMS to administer ESRD claims for the geographic locale in which the group's home office is located only if—
(i) The group of ESRD suppliers requests such privileges; and
(ii) CMS finds the exception will support the implementation of MACs or will serve some other compelling interest of the Medicare program.
CMS enters into contractual agreements with intermediaries, carriers, Medicare Administrative Contractors (MACs), and program safeguard contractors (PSCs) to perform medical review functions not for benefit integrity purposes to ensure that items or services are covered and are reasonable and necessary in accordance with Medicare coverage policies and program instructions.
As used in this subpart—
(a)
(1) No later than 1 year following the initiation of non-random prepayment complex medical review; or
(2) When calculation of the error rate indicates that the provider or supplier has reduced its initial error rate by 70 percent or more. A contractor must review claims for a specific billing code aberrancy for the quarter and calculate the quarterly error rate for those claims medically reviewed in that
(3) When a provider or supplier is terminated from non-random prepayment complex medical review after 1 year of review and the contractor determines that the provider or supplier continues to have a high error rate despite educational interventions, the contractor must consider referring the provider or supplier to the contractor responsible for benefit integrity review. Contractors must also consider continuing educational interventions without performing further medical review or consider the need for post-payment medical review.
(b)
(2) If extended medical review is necessary, contractors must notify providers and suppliers in writing the reasons for the need to perform additional prepayment complex review.
(c)
(2) A determination as to whether the provider's or supplier's initial probe review error rate for a specific billing code has been reduced by 70 percent must also be evaluated quarterly. There is no minimum timeframe that a provider or supplier must be on review.
(3) The contractor's quarterly error rate evaluations must be for the discrete quarter; a rolling error rate average over more than 1 quarter is not permitted.
(4) After the contractor determines that the provider or supplier must be terminated from non-random prepayment complex medical review, the claims processing system must be updated within 5 business days to ensure that a provider's or supplier's claims for a specific billing error are no longer suspended for non-random prepayment complex medical review.
(d)
(2) This review would only be initiated if a probe review confirms that there continues to be a high level of payment error.
(3) If there is a high level of payment error, a provider or supplier may be placed on non-random prepayment complex medical review no earlier than 6 months after termination of a previous non-random prepayment complex medical review. As set forth in § 421.505(a)(3) contractors may also refer the provider or supplier to the contractor responsible for benefit integrity review or place the provider or supplier on postpayment medical review.
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
Nomenclature changes to part 422 appear at 70 FR 4741, Jan. 28, 2005.
(a)
(b)
As used in this part—
(1) The provider or provider network agrees to furnish for a specific MA plan(s) specified services to the organization's MA enrollees;
(2) The organization retains responsibilities for the services; and
(3) Medicare payment to the organization discharges the enrollee's obligation to pay for the services.
(1) Enrolls special needs individuals entitled to medical assistance under a Medicaid State plan, as defined in section 1859(b)(6)(B)(ii) of the Act and § 422.2;
(2) Provides dual eligible beneficiaries access to Medicare and Medicaid benefits under a single managed care organization;
(3) Has a capitated contract with a State Medicaid agency that includes coverage of specified primary, acute, and long-term care benefits and services, consistent with State policy;
(4) Coordinates the delivery of covered Medicare and Medicaid health and long-term care services using aligned care management and specialty care network methods for high-risk beneficiaries; and
(5) Employs policies and procedures approved by CMS and the State to coordinate or integrate member materials, enrollment, communications, grievance and appeals, and quality improvement.
(1) The use of a State assessment tool from the State in which the individual resides; and
(2) An assessment conducted by an impartial entity and having the requisite knowledge and experience to accurately identify whether the beneficiary meets the institutional LOC criteria. In States and territories that do not have an existing institutional level of care assessment tool, the individual must be assessed using the same methodology that State uses to determine institutional level of care for Medicaid nursing home eligibility.
(1) Is approved by the Internal Revenue Service to be a trustee or custodian of an individual retirement account (IRA); and
(2) Meets the requirements of § 422.262(b).
(1) Any individual who is engaged in the delivery of health care services in a State and is licensed or certified by the State to engage in that activity in the State; and
(2) Any entity that is engaged in the delivery of health care services in a State and is licensed or certified to deliver those services if such licensing or certification is required by State law or regulation.
(1) Performs some of the MA organization's management functions under contract or delegation;
(2) Furnishes services to Medicare enrollees under an oral or written agreement; or
(3) Leases real property or sells materials to the MA organization at a cost of more than $2,500 during a contract period.
(1) Is described in section 501(c)(8) of the Internal Revenue Code of 1986 and is exempt from taxation under section 501(a) of that Act; and
(2) Is affiliated with, carries out the tenets of, and shares a religious bond with, a church or convention or association of churches or an affiliated group of churches.
(1) Restricts enrollment to individuals who reside in a continuing care retirement community as defined in § 422.133(b)(2);
(2) Provides primary care services onsite and has a ratio of accessible physicians to beneficiaries that CMS determines is adequate consistent with prevailing patterns of community health care referenced at § 422.112(a)(10);
(3) Provides transportation services for beneficiaries to specialty providers outside of the facility; and
(4) Was participating as of December 31, 2009 in a demonstration established by CMS for not less than 1 year.
(1) For local MA plans:
(i) Whether the area meets the “county integrity rule” that a service area generally consists of a full county or counties.
(ii) However, CMS may approve a service area that includes only a portion of a county if it determines that the “partial county” area is necessary, nondiscriminatory, and in the best interests of the beneficiaries. CMS may also consider the extent to which the proposed service area mirrors service areas of existing commercial health care plans or MA plans offered by the organization.
(2) For all MA coordinated care plans, whether the contracting provider network meets the access and availability standards set forth in § 422.112. Although not all contracting providers must be located within the plan's service area, CMS must determine that all services covered under the plan are accessible from the service area.
(3) For MA regional plans, whether the service area consists of the entire region.
(a)
(1)
(i) The network is approved by CMS to ensure that all applicable requirements are met, including access and availability, service area, and quality.
(ii) Coordinated care plans may include mechanisms to control utilization, such as referrals from a gatekeeper for an enrollee to receive services within the plan, and financial arrangements that offer incentives to providers to furnish high quality and cost-effective care.
(iii) Coordinated care plans include plans offered by any of the following:
(A) Health maintenance organizations (HMOs);
(B) Provider-sponsored organizations (PSOs), subject to paragraph (a)(1)(vi) of this section.
(C) Regional or local preferred provider organizations (PPOs) as specified in paragraph (a)(1)(v) of this section.
(D) Other network plans (except PFFS plans).
(iv) A specialized MA plan for special needs individuals (SNP) includes any type of coordinated care plan that meets CMS's SNP requirements and exclusively enrolls special needs individuals as defined by § 422.2 of this subpart. All MA plans wishing to offer a SNP will be required to be approved by the National Commission on Quality Assurance (NCQA) effective January 1, 2012. This approval process applies to existing SNPs as well as new SNPs joining the program. All SNPs must submit their model of care (MOC) to CMS for NCQA evaluation and approval as per CMS guidance.
(v) A PPO plan is a plan that—
(A) Has a network of providers that have agreed to a contractually specified reimbursement for covered benefits with the organization offering the plan;
(B) Provides for reimbursement for all covered benefits regardless of whether the benefits are provided within the network of providers;
(C) Only for purposes of quality assurance requirements in § 422.152(e), is offered by an organization that is not licensed or organized under State law as an HMO; and
(D) Does not permit prior notification for out-of-network services—that is, a reduction in the plan's standard cost-sharing levels when the out-of-network provider from whom an enrollee is receiving plan-covered services voluntarily notifies the plan prior to furnishing those services, or the enrollee voluntarily notifies the PPO plan prior to receiving plan-covered services from an out-of-network provider.
(vi) In accordance with § 422.370, CMS does not waive the State licensure requirement for organizations seeking to offer a PSO.
(2)
(A) Pays at least for the services described in § 422.101, after the enrollee has incurred countable expenses (as specified in the plan) equal in amount to the annual deductible specified in § 422.103(d);
(B) Does not permit prior notification—that is, a reduction in the plan's standard cost-sharing levels when the provider from whom an enrollee is receiving plan-covered services voluntarily notifies the plan prior to furnishing those services, or the enrollee voluntarily notifies the MSA plan prior to receiving plan-covered services from a provider; and
(C) Meets all other applicable requirements of this part.
(ii)
(A) That is established in conjunction with an MSA plan for the purpose of paying the qualified expenses of the account holder; and
(B) Into which no deposits are made other than contributions by CMS under the MA program, or a trustee-to-trustee transfer or rollover from another MA MSA of the same account holder, in accordance with the requirements of sections 138 and 220 of the Internal Revenue Code.
(3)
(i) Pays providers of services at a rate determined by the plan on a fee-for-service basis without placing the provider at financial risk;
(ii) Subject to paragraphs (a)(3)(ii)(A) and (B) of this section, does not vary the rates for a provider based on the utilization of that provider's services; and
(A) May vary the rates for a provider based on the specialty of the provider, the location of the provider, or other factors related to the provider that are not related to utilization and do not violate § 422.205 of this part.
(B) May increase the rates for a provider based on increased utilization of specified preventive or screening services.
(iii) Does not restrict enrollees' choices among providers that are lawfully authorized to provide services and agree to accept the plan's terms and conditions of payment.
(iv) Does not permit prior notification—that is, a reduction in the plan's standard cost-sharing levels when the provider from whom an enrollee is receiving plan-covered services voluntarily notifies the plan prior to furnishing those services, or the enrollee voluntarily notifies the PFFS plan prior to receiving plan-covered services from a provider.
(b)
(c)
(2)
(3)
(a)
(b)
(c)
(d)
(2)
(i) The estimated costs to be incurred by CMS in that fiscal year to carry out the activities described in paragraph (b) of this section; or
(ii) For fiscal year 2006 and each succeeding year, the applicable portion (as defined in paragraph (e) of this section) of $200 million.”
(e)
(f)
(i) The assessment formula for MA organizations (including MA-PD plans):
C divided by A times B where—
A is the total estimated January payments to all MA organizations subject to the assessment;
B is the 9-month (January through September) assessment period; and
C is the total fiscal year MA organization user fee assessment amount determined in accordance with paragraph (d)(2) of this section.
(ii) The assessment formula for PDPs: C divided by A times B where—A is the total estimated January payments to all PDP sponsors subject to the assessment; B is the 9-month (January through September) assessment period; and C is the total fiscal year PDP sponsor's user fee assessment amount determined in accordance with paragraph (d)(2) of this section.
(2) CMS determines each MA organization's and PDP sponsor's pro rata share of the annual fee on the basis of the organization's calculated monthly payment amount during the 9 consecutive months beginning with January. CMS calculates each organization's monthly pro rata share by multiplying the established percentage rate by the total monthly calculated Medicare payment amount to the organization as recorded in CMS's payment system on the first day of the month.
(3) CMS deducts the organization's fee from the amount of Federal funds otherwise payable to the MA organization or PDP sponsor for that month.
(4) If assessments reach the amount authorized for the year before the end of September, CMS discontinues assessment.
(5) If there are delays in determining the amount of the annual aggregate fees specified in paragraph (d)(2) of this section, or the fee percentage rate specified in paragraph (f)(2), CMS may
For this subpart, all references to an MA plan include MA-PD and both MA local and MA regional plans, as defined in § 422.2 unless specifically noted otherwise.
(a) An individual is eligible to elect an MA plan if he or she—
(1) Is entitled to Medicare under Part A and enrolled in Part B (except that an individual entitled only to Part B and who was enrolled in an HMO or CMP with a risk contract under part 417 of this chapter on December 31, 1998 may continue to be enrolled in the MA organization as an MA plan enrollee);
(2) Has not been medically determined to have end-stage renal disease, except that—
(i) An individual who develops end-stage renal disease while enrolled in an MA plan or in a health plan offered by the MA organization is eligible to elect an MA plan offered by that organization;
(ii) An individual with end-stage renal disease whose enrollment in an MA plan was terminated or discontinued after December 31, 1998, because CMS or the MA organization terminated the MA organization's contract for the plan or discontinued the plan in the area in which the individual resides, is eligible to elect another MA plan. If the plan so elected is later terminated or discontinued in the area in which the individual resides, he or she may elect another MA plan; and
(iii) An individual with end-stage renal disease may elect an MA special needs plan as defined in § 422.2, as long as that plan has opted to enroll ESRD individuals.
(3) Meets either of the following residency requirements:
(i) Resides in the service area of the MA plan.
(ii) Resides outside of the service area of the MA plan and is enrolled in a health plan offered by the MA organization during the month immediately preceding the month in which the individual is entitled to both Medicare Part A and Part B, provided that an MA organization chooses to offer this option and that CMS determines that all applicable MA access requirements of § 422.112 are met for that individual through the MA plan's established provider network. The MA organization must furnish the same benefits to these enrollees as to enrollees who reside in the service area;
(4) Has been a member of an Employer Group Health Plan (EGHP) that includes the elected MA plan, even if the individual lives outside of the MA plan service area, provided that an MA organization chooses to offer this option and that CMS determines that all applicable MA access requirements at § 422.112 are met for that individual through the MA plan's established provider network. The MA organization must furnish the same benefits to all enrollees, regardless of whether they reside in the service area;
(5) Completes and signs an election form or completes another CMS-approved election method offered by the MA organization and provides information required for enrollment; and
(6) Agrees to abide by the rules of the MA organization after they are disclosed to him or her in connection with the election process.
(b) An MA eligible individual may not be enrolled in more than one MA plan at any given time.
(a)
(b)
(1) Meet the definition of a special needs individual, as defined at § 422.2;
(2) Meet the eligibility requirements for that specific SNP; and
(3) Be eligible to elect an MA plan under § 422.50.
(c)
(d)
(e)
(f)
(a)
(1) Be a resident of an MA senior housing facility defined in § 422.2.
(2) Be eligible to elect an MA plan under § 422.50.
(b)
(c)
(a)
(b)
(c)
(i) Obtain CMS's approval of the continuation area, the marketing materials that describe the option, and the MA organization's assurances of access to services.
(ii) Describe the option(s) in the member materials it offers and make the option available to all MA local plan enrollees residing in the continuation area.
(2) An enrollee who moves out of the service area and into the geographic area designated as the continuation area has the choice of continuing enrollment or disenrolling from the MA local plan. The enrollee must make the choice of continuing enrollment in a manner specified by CMS. If no choice is made, the enrollee must be disenrolled from the plan.
(d)
(2)
(i) Through contracts with providers, or through direct payment of claims
(ii) By ensuring that the access requirements of § 422.112 are met.
(3)
(4)
(i) The ultimate responsibility for all appeals and grievance requirements remain with the organization that is receiving payment from CMS; and
(ii) Organizations that require enrollees to give advance notice of intent to use the continuation of enrollment option, must stipulate the notification process in the marketing materials.
(e)
(a)
(b)
(c)
(d)
An RFB society that offers an MA RFB plan may offer that plan only to members of the church, or convention or group of churches with which the society is affiliated.
(a)
(2) MA organizations must accept elections during the open enrollment periods specified in § 422.62(a)(3), (a)(4), and (a)(5) if their MA plans are open to new enrollees.
(b)
(2) If CMS determines that an MA plan offered by an MA organization has
(i) First, for individuals who elected the plan prior to the CMS determination that capacity has been exceeded, elections will be processed in chronological order by date of receipt of their election forms.
(ii) Then for other individuals in a manner that does not discriminate on the basis of any factor related to health as described in § 422.110.
(3) CMS considers enrollment limit requests for an MA plan service area, or a portion of the plan service area, only if the health and safety of beneficiaries is at risk, such as if the provider network is not available to serve the enrollees in all or a portion of the service area.
(c)
(2) The MA organization must file and retain election forms for the period specified in CMS instructions.
(d)
(e)
(1) Each election is dated as of the day it is received in a manner acceptable to CMS.
(2) Elections are processed in chronological order, by date of receipt.
(3) The MA organization gives the beneficiary prompt notice of acceptance or denial in a format specified by CMS.
(4) If the MA plan is enrolled to capacity, it explains the procedures that will be followed when vacancies occur.
(5) Upon receipt of the election, or for an individual who was accepted for future enrollment from the date a vacancy occurs, the MA organization transmits, within the timeframes specified by CMS, the information necessary for CMS to add the beneficiary to its records as an enrollee of the MA organization.
(f)
(2) In order to obtain the effective date described in paragraph (f)(1) of this section, the beneficiary must certify that, at the time of enrollment in the MA organization, he or she received the disclosure statement specified in § 422.111.
(3) Upon receipt of the election from the employer, the MA organization must submit the enrollment within timeframes specified by CMS.
(g)
(1)
(i) Decline the plan selected by CMS, in a form and manner determined by CMS, or
(ii) Request enrollment in another plan.
(2)
(3)
(a)
(i) The last day of the month preceding the month of entitlement; or
(ii) If after May 15, 2006, the last day of the individual's Part B initial enrollment period.
(2)
(ii) For 2006, the annual coordinated election period begins on November 15, 2005 and ends on May 15, 2006.
(iii) Beginning in 2011, the annual coordinated election period for the following calendar year is October 15 through December 7.
(iv) During the annual coordinated election period, an individual eligible to enroll in an MA plan may change his or her election from an MA plan to Original Medicare or to a different MA plan, or from Original Medicare to an MA plan. If an individual changes his or her election to Original Medicare, he or she may also elect a PDP.
(3)
(4)
(A) An individual who is enrolled in an MA-PD plan may elect another MA-PD plan or original Medicare and coverage under a PDP. Such an individual may not elect an MA plan that does not provide qualified prescription drug coverage.
(B) An individual who is enrolled in an MA plan that does not provide qualified prescription drug coverage may elect another MA plan that does not provide that coverage or original Medicare. Such an individual may not elect an MA-PD plan or coverage under a PDP.
(ii)
(iii) The limitation to one election or change in paragraphs (a)(4)(i) and (a)(4)(ii) of this section does not apply
(5)
(ii)
(iii)
(6)
(7)
(b)
(1) CMS or the organization has terminated the organization's contract for the plan, discontinued the plan in the area in which the individual resides, or the organization has notified the individual of the impending termination of the plan, or the impending discontinuation of the plan in the area in which the individual resides.
(2) The individual is not eligible to remain enrolled in the plan because of a change in his or her place of residence to a location out of the service area or continuation area or other change in circumstances as determined by CMS but not including terminations resulting from a failure to make timely payment of an MA monthly or supplemental beneficiary premium, or from disruptive behavior.
(3) The individual demonstrates to CMS, in accordance with guidelines issued by CMS, that—
(i) The organization offering the plan substantially violated a material provision of its contract under this part in relation to the individual, including, but not limited to the following:
(A) Failure to provide the beneficiary on a timely basis medically necessary services for which benefits are available under the plan.
(B) Failure to provide medical services in accordance with applicable quality standards; or
(ii) The organization (or its agent, representative, or plan provider) materially misrepresented the plan's provisions in marketing the plan to the individual.
(4) The individual meets such other exceptional conditions as CMS may provide.
(c)
(d)
(2)
(A) An annual election period; or
(B) The special election period described in paragraph (b) of this section.
(ii)
Each MA organization must provide, on an annual basis, and in a format and using standard terminology that may be specified by CMS, the information necessary to enable CMS to provide to current and potential beneficiaries the information they need to make informed decisions with respect to the available choices for Medicare coverage.
(a)
(b)
(i) Elect a different MA plan by filing the appropriate election with the MA organization.
(ii) Submit a request for disenrollment to the MA organization in the form and manner prescribed by CMS or file the appropriate disenrollment request through other mechanisms as determined by CMS.
(2)
(3)
(i) Submit a disenrollment notice to CMS within timeframes specified by CMS;
(ii) Provide enrollee with notice of disenrollment in a format specified by CMS; and
(iii) In the case of a plan where lock-in applies, include in the notice a statement explaining that he or she—
(A) Remains enrolled until the effective date of disenrollment; and
(B) Until that date, neither the MA organization nor CMS pays for services not provided or arranged for by the MA plan in which the enrollee is enrolled; and
(iv) File and retain disenrollment requests for the period specified in CMS instructions.
(4)
(5)
(i) There never was a legally valid enrollment.
(ii) A valid request for disenrollment was properly made but not processed or acted upon.
(c)
(d)
(2)
(3)
(4)
(5)
(6)
(e)
(i) The individual changes the election under this section.
(ii) The elected MA plan is discontinued or no longer serves the area in which the individual resides, as provided under § 422.74(b)(3), or the organization does not offer or the individual does not elect the option of continuing enrollment, as provided under § 422.54.
(2) An individual enrolled in an MA plan that becomes an MA-PD plan on January 1, 2006, will be deemed to have elected to enroll in that MA-PD plan.
(3) An individual enrolled in an MA plan that, as of December 31, 2005, offers any prescription drug coverage will be deemed to have elected an MA-PD plan offered by the same organization as of January 1, 2006.
(4) An individual who has elected an MA plan that does not provide prescription drug coverage will not be deemed to have elected an MA-PD plan and will remain enrolled in the MA plan as provided in paragraph (e)(1) of this section.
(5) An individual enrolled in an MA-PD plan as of December 31 of a year is deemed to have elected to remain enrolled in that plan on January 1 of the following year.
(f)
(2) Upon receipt of the election from the employer, the MA organization must submit a disenrollment notice to CMS within timeframes specified by CMS.
(a)
(b)
(c)
(d)
(e)
(f)
(a)
(1) Disenroll an individual from any MA plan it offers; or
(2) Orally or in writing, or by any action or inaction, request or encourage an individual to disenroll.
(b)
(i) Any monthly basic and supplementary beneficiary premiums are not paid on a timely basis, subject to the grace period for late payment established under paragraph (d)(1) of this section.
(ii) The individual has engaged in disruptive behavior specified at paragraph (d)(2) of this section.
(iii) The individual provides fraudulent information on his or her election form or permits abuse of his or her enrollment card as specified in paragraph (d)(3) of this section.
(2)
(i) The individual no longer resides in the MA plan's service area as specified under paragraph (d)(4) of this section, is no longer eligible under § 422.50(a)(3)(ii), and optional continued enrollment has not been offered or elected under § 422.54.
(ii) The individual loses entitlement to Part A or Part B benefits as described in paragraph (d)(5) of this section.
(iii) Death of the individual as described in paragraph (d)(6) of this section.
(iv) Individuals enrolled in a specialized MA plan for special needs individuals that exclusively serves and enrolls special needs individuals who no longer meet the special needs status of that plan (or deemed continued eligibility, if applicable).
(3)
(ii)
(c)
(1) Be provided to the individual before submission of the disenrollment to CMS; and
(2) Include an explanation of the individual's right to a hearing under the MA organization's grievance procedures.
(d)
(i) The MA organization can demonstrate to CMS that it made reasonable efforts to collect the unpaid premium amount, including:
(A) Alerting the individual that the premiums are delinquent;
(B) Providing the individual with a grace period, that is, an opportunity to pay past due premiums in full. The length of the grace period must—
(
(
(C) Advising the individual that failure to pay the premiums by the end of the grace period will result in termination of MA coverage.
(ii) The MA organization provides the enrollee with notice of disenrollment that meets the requirements set forth in paragraph (c) of this section.
(iii) If the enrollee fails to pay the premium for optional supplemental benefits but pays the basic premium and any mandatory supplemental premium, the MA organization has the option to discontinue the optional supplemental benefits and retain the individual as an MA enrollee.
(iv) An MA organization may not disenroll an individual who had monthly premiums withheld per § 422.262(f)(1) and (g) of this part, or who is in premium withhold status, as defined by CMS.
(v)
(vi)
(2)
(ii)
(iii)
(iv)
(v)
(vi)
(3)
(A) Knowingly provides, on the election form, fraudulent information that materially affects the individual's eligibility to enroll in the MA plan; or
(B) Intentionally permits others to use his or her enrollment card to obtain services under the MA plan.
(ii)
(iii)
(4)
(A) Out of the MA plan's service area; or
(B) From the residence in which the individual resided at the time of enrollment in the MA plan to an area outside the MA plan's service area, for those individuals who enrolled in the MA plan under the eligibility requirements at § 422.50(a)(3)(ii) or (a)(4).
(ii)
(iii)
(A) The individual is disenrolled on the first day of the 13th month after the individual left the service area (or residence, if paragraph (d)(4)(i)(B) of this section applies);
(B) The individual understands and accepts any restrictions imposed by the MA plan on obtaining these services while absent from the MA plan's service area for the extended period, consistent with paragraph (d)(4)(i)(C) of the section;
(C) The MA organization makes this visitor/traveler option available to all Medicare enrollees who are absent for an extended period from the MA plan's service area. MA organizations may limit this visitor/traveler option to enrollees who travel to certain areas, as defined by the MA organization, and who receive services from qualified providers who directly provide, arrange for, or pay for health care; and
(D) The MA organization furnishes all Medicare Parts A and B services and all mandatory and optional supplemental benefits at the same cost sharing levels as apply within the plan's service area; and
(E) The MA organization furnishes the services in paragraph (d)(4)(iii)(D) of this section consistent with Medicare access and availability requirements at § 422.112 of this part.
(iv)
(5)
(6)
(7)
(ii) The notice must be sent before the effective date of the plan termination or area reduction, and in the timeframes specified in § 422.506(a)(2).
(e)
(2)
(ii) An individual who fails to make an election during the special election period is deemed to have elected original Medicare.
(a)
(b)
(i) Ambulance services dispatched through 911 or its local equivalent as provided in § 422.113.
(ii) Emergency and urgently needed services as provided in § 422.113.
(iii) Maintenance and post-stabilization care services as provided in § 422.113.
(iv) Renal dialysis services provided while the enrollee was temporarily outside the plan's service area.
(v) Services for which coverage has been denied by the MA organization and found (upon appeal under subpart M of this part) to be services the enrollee was entitled to have furnished, or paid for, by the MA organization.
(2) An MA plan (and an MA MSA plan, after the annual deductible in § 422.103(d) has been met) offered by an MA organization satisfies paragraph (a) of this section with respect to benefits for services furnished by a noncontracting provider if that MA plan provides payment in an amount the provider would have received under original Medicare (including balance billing permitted under Medicare Part A and Part B).
(c)
(1) Basic benefits are all Medicare-covered services, except hospice services.
(2) Supplemental benefits, which consist of—
(i) Mandatory supplemental benefits are services not covered by Medicare that an MA enrollee must purchase as part of an MA plan that are paid for in full, directly by (or on behalf of) Medicare enrollees, in the form of premiums or cost-sharing.
(ii) Optional supplemental benefits are health services not covered by Medicare that are purchased at the option of the MA enrollee and paid for in full, directly by (or on behalf of) the Medicare enrollee, in the form of premiums or cost-sharing. These services may be grouped or offered individually.
(d)
(1) To all Medicare beneficiaries residing in the service area of the MA plan;
(2) At a uniform premium, with uniform benefits and level of cost-sharing throughout the plan's service area, or segment of service area as provided in § 422.262(c)(2).
(e)
(f)
(1) Medicare-covered services meet CMS fee-for-service guidelines.
(2) MA organizations are not designing benefits to discriminate against beneficiaries, promote discrimination, discourage enrollment or encourage disenrollment, steer subsets of Medicare beneficiaries to particular MA plans, or inhibit access to services. and
(3) Benefit design meets other MA program requirements.
(4) Except as provided in paragraph (f)(5), MA local plans (as defined in § 422.2) must have an out-of pocket maximum for Medicare Parts A and B services that is no greater than the annual limit set by CMS.
(5) With respect to a local PPO plan, the limit specified under paragraph (f)(4) applies only to use of network providers. Such local PPO plans must include a total catastrophic limit on beneficiary out-of-pocket expenditures for both in-network and out-of-network Parts A and B services that is—
(i) Consistent with the requirements applicable to MA regional plans at § 422.101(d)(3) of this part; and
(ii) Not greater than the annual limit set by CMS.
(6) Cost sharing for Medicare Part A and B services specified by CMS does not exceed levels annually determined by CMS to be discriminatory for such services.
(g)
(2) MA organizations may not impose cost-sharing for influenza vaccine and pneumococcal vaccine on their MA plan enrollees.
(h)
(i)
(j)
(1) Chemotherapy administration services to include chemotherapy drugs and radiation therapy integral to the treatment regimen.
(2) Renal dialysis services as defined at section 1881(b)(14)(B) of the Act.
(3) Skilled nursing care defined as services provided during a covered stay in a skilled nursing facility during the period for which cost sharing would apply under Original Medicare.
(k)
Except as specified in § 422.318 (for entitlement that begins or ends during a hospital stay) and § 422.320 (with respect to hospice care), each MA organization must meet the following requirements:
(a) Provide coverage of, by furnishing, arranging for, or making payment for, all services that are covered by Part A and Part B of Medicare (if the enrollee is entitled to benefits under both parts) or by Medicare Part B (if entitled only under Part B) and that are available to beneficiaries residing in the plan's service area. Services may be provided outside of the service area of the plan if the services are accessible and available to enrollees.
(b) Comply with—
(1) CMS's national coverage determinations;
(2) General coverage guidelines included in original Medicare manuals and instructions unless superseded by regulations in this part or related instructions; and
(3) Written coverage decisions of local Medicare contractors with jurisdiction for claims in the geographic area in which services are covered under the MA plan. If an MA plan covers geographic areas encompassing more than one local coverage policy area, the MA organization offering such an MA plan may elect to apply to plan enrollees in all areas uniformly the coverage policy that is the most beneficial to MA enrollees. MA organizations that elect this option must notify CMS before selecting the area that has local coverage policies that are most beneficial to enrollees as follows:
(i) An MA organization electing to adopt a uniform local coverage policy for a plan or plans must notify CMS at least 60 days before the date specified in § 422.254(a)(1), which is 60 days before the date bid amounts are due for the subsequent year. Such notice must identify the plan or plans and service area or services areas to which the uniform local coverage policy or policies will apply, the competing local coverage policies involved, and a justification explaining why the selected local coverage policy or policies are most beneficial to MA enrollees.
(ii) CMS will review notices provided under paragraph (b)(3)(i) of this section, evaluate the selected local coverage policy or policies based on such factors as cost, access, geographic distribution of enrollees, and health status of enrollees, and notify the MA organization of its approval or denial of the selected uniform local coverage policy or policies.
(4) Instead of applying rules in paragraph (b)(3)(ii) of this section, and to the extent it exercises this option, an organization offering an MA regional plan in an MA region that covers more than one local coverage policy area must uniformly apply all of the local coverage policy determinations that apply in the selected local coverage policy area in that MA region to all parts of that same MA region. The selection of the single local coverage policy area's local coverage policy determinations to apply throughout the MA region is at the discretion of the MA regional plan and is not subject to CMS pre-approval.
(5) If an MA organization offering an MA local plan elects to exercise the option in paragraph (b)(3) of this section related to a local MA plan, or if an MA organization offering an MA regional plan elects to exercise the option in paragraph (b)(4) of this section related to an MA regional plan, then the MA organization must make information on the selected local coverage policy readily available, including through the Internet, to enrollees and health care providers.
(c) MA organizations may elect to furnish, as part of their Medicare covered benefits, coverage of posthospital SNF care as described in subparts C and D of this part, in the absence of the prior qualifying hospital stay that would otherwise be required for coverage of this care.
(d)
(1)
(2)
(3)
(4)
(e)
(2) In applying the actuarially equivalent level of cost-sharing with respect to MA bids related to benefits under the original Medicare program option as set forth at § 422.256(b)(3), only the catastrophic limit on out-of-pocket expenses for in-network benefits in paragraph (d)(2) of this section will be taken into account.
(f)
(i) Conduct a comprehensive initial health risk assessment of the individual's physical, psychosocial, and functional needs as well as annual health risk reassessment, using a comprehensive risk assessment tool that CMS will review during oversight activities.
(ii) Develop and implement a comprehensive individualized plan of care through an interdisciplinary care team in consultation with the beneficiary, as feasible, indentifying goals and objectives including measurable outcomes as well as specific services and benefits to be provided.
(iii) Use an interdisciplinary team in the management of care.
(2) MA organizations offering SNPs must also develop and implement the following model of care components to assure an effective management structure:
(i) Target one of the three SNP populations defined in § 422.2 of this part.
(ii) Have appropriate staff (employed, contracted, or non-contracted) trained on the SNP plan model of care to coordinate and/or deliver all services and benefits.
(iii) Coordinate the delivery of care across healthcare settings, providers, and services to assure continuity of care.
(iv) Coordinate the delivery of specialized benefits and services that meet the needs of the most vulnerable beneficiaries among the three target special needs populations as defined in § 422.2 of this part, including frail/disabled beneficiaries and beneficiaries near the end of life.
(v) Coordinate communication among plan personnel, providers, and beneficiaries.
(vi) All MAOs wishing to offer or continue to offer a SNP will be required to be approved by the National Committee for Quality Assurance (NCQA) effective January 1, 2012 and subsequent years. All SNPs must submit their model of care (MOC) to CMS for NCQA evaluation and approval in accordance with CMS guidance.
At 76 FR 54634, Sept. 1, 2011, § 422.101 was amended by removing the phrase “indentifying goals” and adding the phrase “identifying goals” in its place in paragraph (f)(1)(ii), effective October 31, 2011.
(a)
(2) If the MA organization imposes mandatory supplemental benefits, it must impose them on all Medicare beneficiaries enrolled in the MA plan.
(3) CMS approves mandatory supplemental benefits if the benefits are designed in accordance with CMS' guidelines and requirements as stated in this part and other written instructions.
(4) Beginning in 2006, an MA plan may reduce cost sharing below the actuarial value specified in section 1854(e)(4)(A) of the Act only as a mandatory supplemental benefit.
(b)
(c)
(d)
(a)
(b)
(c)
(1) 100 percent of the expense of the services.
(2) 100 percent of the amounts that would have been paid for the services under original Medicare, including amounts that would be paid by the enrollee as deductibles and coinsurance.
(d)
(1) For contract year 1999, may not exceed $6,000; and
(2) For subsequent contract years may not exceed the deductible for the preceding contract year, increased by the national per capita growth percentage determined under § 422.306(a)(2).
(3) Is pro-rated for enrollments occurring during a beneficiary's initial coverage election period as described at § 422.62(a)(1) of this part or during any other enrollments occurring after January 1.
(e) All MA organizations offering MSA plans must provide enrollees with available information on the cost and quality of services in their service area, and submit to CMS for approval a proposed approach to providing such information.
(a) An MA organization offering an MA MSA plan may not provide supplemental benefits that cover expenses that count towards the deductible specified in § 422.103(d).
(b) In applying the limitation of paragraph (a) of this section, the following kinds of policies are not considered as covering the deductible:
(1) A policy that provides coverage (whether through insurance or otherwise) for accidents, disability, dental care, vision care, or long-term care.
(2) A policy of insurance in which substantially all of the coverage relates to liabilities incurred under workers' compensation laws, tort liabilities, liabilities relating to use or ownership of property, and any other similar liabilities that CMS may specify by regulation.
(3) A policy of insurance that provides coverage for a specified disease or illness or pays a fixed amount per day (or other period) of hospitalization.
(a)
(b)
(1) Before January 1, 2006, under a coordinated care plan as an additional benefit as described in section 1854(f)(1)(A) of the Act;
(2) Under an HMO plan as a mandatory supplemental benefit as described in § 422.102(a); or
(3) Under an HMO plan as an optional supplemental benefit as described in § 422.102(b).
(c)
(d)
(1)
(2)
(i) Any premiums and cost-sharing for which the enrollee is responsible;
(ii) Annual limits on benefits and on out-of-pocket expenditures;
(iii) Potential financial responsibility for services for which the plan denies payment because they were not covered under the POS benefit, or exceeded the dollar limit for the benefit; and
(iv) The annual maximum out-of-pocket expense an enrollee could incur.
(e)
(f)
(a)
(1) All requirements of this part that apply to the MA program apply to the MA plan coverage and benefits provided to enrollees eligible for benefits under an employer, labor organization, trustees of a fund established by one or more employers or labor organizations, or Medicaid contract.
(2) Employer benefits that complement an MA plan, which are not part of the MA plan, are not subject to review or approval by CMS.
(3) Medicaid benefits are not reviewed under this part, but are subject to appropriate CMS review under the Medicaid program. MA plan benefits provided to individuals entitled to Medicaid benefits provided by the MA organization under a contract with the State Medicaid agency are subject to MA rules and requirements.
(b)
(1) Payment of a portion or all of the MA basic and supplemental premiums.
(2) Payment of a portion or all of other cost-sharing amounts approved for the MA plan.
(3) Other employer-sponsored benefits that may require additional premium and cost-sharing, or other benefits provided by the organization under a contract with the State Medicaid agency.
(c)
(2) Approved waivers or modifications under this paragraph granted to any MA organization may be used by any other similarly situated MA organization in developing its bid.
(d)
(2) An MA plan described in this paragraph may restrict the enrollment of individuals in that plan to individuals who are beneficiaries and participants in that plan.
(3) Approved waivers or modifications under this paragraph granted to any MA plan may be used by any other similarly situated MA plan in developing its bid.
(4) An employer-sponsored group MA plan means MA coverage offered to retirees who are Medicare eligible individuals under employment-based retiree health coverage, as defined in paragraph (d)(5) of this section, approved by CMS as an MA plan.
(5) Employment-based retiree coverage means coverage of health care costs under a group health plan, as defined in paragraph (d)(6) of this section, based on an individual's status as a retired participant in the plan, or as the spouse or dependent of a retired participant. The term includes coverage provided by voluntary insurance coverage, or coverage as a result of a statutory or contractual obligation.
(6) Group health plans include plans as defined in section 607(1) of ERISA, (29 U.S.C. 1167(1)). They also include the following plans:
(i) A Federal or State governmental plan, which is a plan providing medical care that is established or maintained for its employees by the Government of the United States, by the government of any State or political subdivision of a State (including a county or local government), or by any agency or instrumentality or any of the foregoing, including a health benefits plan offered under 5 U.S.C. 89 (the Federal Employee Health Benefit Plan (FEHBP)).
(ii) A collectively bargained plan, which is a plan providing medical care that is established or maintained under or by one or more collective bargaining agreements.
(iii) A church plan, which is a plan providing medical care that is established and maintained for its employees or their beneficiaries by a church or by a convention or association of churches that is exempt from tax under section 501 of the Internal Revenue Code of 1986 (26 U.S.C. 501).
(iv) Any of the following plans:
(A) An account-based medical plan such as a Health Reimbursement Arrangement (HRA) as defined in Internal Revenue Service Notice 2002-45, 2002-28 I.R.B. 93.
(B) A health Flexible Spending Arrangement (FSA) as defined in Internal Revenue Code (Code) section 106(c)(2).
(C) A health savings account (HSA) as defined in Code section 223.
(D) An Archer MSA as defined in Code section 220, to the extent they are subject to ERISA as employee welfare benefit plans providing medical care (or would be subject to ERISA but for the exclusion in ERISA section 4(b), 29 U.S.C.1003(b), for governmental plans or church plans).
(a)
(b)
(c)
(1) The MA organization's responsibility, including financial obligations, to provide or arrange for Medicaid benefits.
(2) The category(ies) of eligibility for dual-eligible beneficiaries to be enrolled under the SNP, as described under the Statute at sections 1902(a), 1902(f), 1902(p), and 1905.
(3) The Medicaid benefits covered under the SNP.
(4) The cost-sharing protections covered under the SNP.
(5) The identification and sharing of information on Medicaid provider participation.
(6) The verification of enrollee's eligibility for both Medicare and Medicaid.
(7) The service area covered by the SNP.
(8) The contract period for the SNP.
(d)
(i) MA organizations offering a new dual-eligible SNP must have a State Medicaid agency contract.
(ii) Existing dual-eligible SNPs that do not have a State Medicaid agency contract—
(A) May continue to operate through the 2012 contract year provided they meet all other statutory and regulatory requirements.
(B) May not expand their service areas during contract years 2010 through 2012.
(2) [Reserved]
(a)
(b)
(1) Identify payers that are primary to Medicare under section 1862(b) of the Act and part 411 of this chapter;
(2) Identify the amounts payable by those payers; and
(3) Coordinate its benefits to Medicare enrollees with the benefits of the primary payers, including reporting, on an ongoing basis, information obtained related to requirements in paragraphs (b)(1) and (b)(2) of this section in accordance with CMS instructions.
(c)
(d)
(1) The insurance carrier, the employer, or any other entity that is liable for payment for the services under section 1862(b) of the Act and part 411 of this chapter.
(2) The Medicare enrollee, to the extent that he or she has been paid by the carrier, employer, or entity for covered medical expenses.
(e)
(f)
(a)
(1) The average cost of furnishing a single service exceeds a cost threshold that—
(i) For calendar years 1998 and 1999, is $100,000; and
(ii) For calendar year 2000 and subsequent calendar years, is the preceding year's dollar threshold adjusted to reflect the national per capita growth percentage described in § 422.308(a).
(2) The estimated cost of Medicare services furnished as a result of a particular NCD or legislative change in benefits represents at least 0.1 percent of the national average per capita costs.
(b)
(c)
(1) Medicare payment for the service or benefit is made directly by the fiscal intermediary and carrier to the provider furnishing the service or benefit in accordance with original Medicare payment rules, methods, and requirements.
(2) Costs for NCD services or legislative changes in benefits for which CMS intermediaries and carriers will not make payment and are the responsibility of the MA organization are—
(i) Services necessary to diagnose a condition covered by the NCD or legislative changes in benefits;
(ii) Most services furnished as follow-up care to the NCD service or legislative change in benefits;
(iii) Any service that is already a Medicare-covered service and included in the annual MA capitation rate or previously adjusted payments; and
(iv) Any services, including the costs of the NCD service or legislative change in benefits, to the extent the MA organization is already obligated to cover it as a supplemental benefit under § 422.102.
(3) Costs for significant cost NCD services or legislative changes in benefits for which CMS fiscal intermediaries and carriers will make payment are those Medicare costs not listed in paragraphs (c)(2)(i) through (c)(2)(iv) of this section.
(4) Beneficiaries are liable for any applicable coinsurance amounts.
(d)
(a)
(1) Medical condition, including mental as well as physical illness.
(2) Claims experience.
(3) Receipt of health care.
(4) Medical history.
(5) Genetic information.
(6) Evidence of insurability, including conditions arising out of acts of domestic violence.
(7) Disability.
(b)
(a)
(1) To each enrollee electing an MA plan it offers;
(2) In clear, accurate, and standardized form; and
(3) At the time of enrollment and at least annually thereafter, 15 days before the annual coordinated election period.
(b)
(1)
(2)
(i) The benefits offered under original Medicare, including the content specified in paragraph (f)(1) of this section;
(ii) For an MA MSA plan, the benefits under other types of MA plans; and
(iii) For a Special Needs Plan for dual-eligible individuals, prior to enrollment, for each prospective enrollee, a comprehensive written statement describing cost sharing protections and benefits that the individual is entitled to under title XVIII and the State Medicaid program under title XIX.
(iv) The availability of the Medicare hospice option and any approved hospices in the service area, including those the MA organization owns, controls, or has a financial interest in.
(3)
(ii) The process MA regional plan enrollees should follow to secure in-network cost sharing when covered services are not readily available from contracted network providers.
(4) Out-of-area coverage provided under the plan, including coverage provided to individuals eligible to enroll in the plan under § 422.50(a)(3)(ii).
(5)
(i) Explanation of what constitutes an emergency, referencing the definitions of emergency services and emergency medical condition at § 422.113;
(ii) The appropriate use of emergency services, stating that prior authorization cannot be required;
(iii) The process and procedures for obtaining emergency services, including use of the 911 telephone system or its local equivalent; and
(iv) The locations where emergency care can be obtained and other locations at which contracting physicians and hospitals provide emergency services and post-stabilization care included in the MA plan.
(6)
(7)
(8)
(9)
(10) Disenrollment rights and responsibilities.
(11)
(12)
(c)
(1) The information required in paragraph (f) of this section.
(2) The procedures the organization uses to control utilization of services and expenditures.
(3) The number of disputes, and the disposition in the aggregate, in a manner and form described by the Secretary. Such disputes shall be categorized as
(i) Grievances according to § 422.564; and
(ii) Appeals according to § 422.578 et. seq.
(4) A summary description of the method of compensation for physicians.
(5) Financial condition of the MA organization, including the most recently audited information regarding, at least, a description of the financial condition of the MA organization offering the plan.
(d)
(1) Submit the changes for CMS review under the procedures of § 422.80.
(2) For changes that take effect on January 1, notify all enrollees at least 15 days before the beginning of the Annual Coordinated Election Period defined in section 1851(e)(3)(B) of the Act.
(3) For all other changes, notify all enrollees at least 30 days before the intended effective date of the changes.
(e)
(f)
(ii) Beneficiary cost-sharing, such as deductibles, coinsurance, and copayment amounts.
(iii) Any beneficiary liability for balance billing.
(2)
(3)
(4)
(5)
(ii) Any beneficiary cost-sharing.
(iii) Any maximum limitations on out-of-pocket expenses.
(iv) In the case of an MA MSA plan, the amount of the annual MSA deposit.
(v) The extent to which an enrollee may obtain benefits through out-of-network health care providers.
(vi) The types of providers that participate in the plan's network and the
(vii) The coverage of emergency and urgently needed services.
(6)
(ii) The MA monthly supplemental beneficiary premium.
(iii) The reduction in Part B premiums, if any.
(7)
(8)
(i) Disenrollment rates for Medicare enrollees for the 2 previous years, excluding disenrollment due to death or moving outside the plan's service area, calculated according to CMS guidelines.
(ii) Medicare enrollee satisfaction.
(iii) Health outcomes.
(iv) Plan-level appeal data.
(v) The recent record of plan compliance with the requirements of this part, as determined by the Secretary.
(vi) Other performance indicators.
(9)
(10) The names, addresses, and phone numbers of contracted providers from whom the enrollee may obtain in-network coverage in other parts of the service area.
(11) If an MA organization exercises the option in § 422.101(b)(3) or (b)(4) related to an MA plan, then it must make the local coverage determination that applies to members of that plan readily available to providers, including through a web site on the Internet.
(g) CMS may require an MA organization to disclose to its enrollees or potential enrollees, the MA organization's performance and contract compliance deficiencies in a manner specified by CMS.
(h)
(1) A toll-free customer service call center that meets all of the following:
(i) Is open during usual business hours.
(ii) Provides customer telephone service in accordance with standard business practices.
(iii) Provides interpreters for non-English speaking and limited English proficient (LEP) individuals.
(2) An Internet Web site that includes, at a minimum the following:
(i) The information required in paragraph (b) of this section.
(ii) Copies of its evidence of coverage, summary of benefits, and information (names, addresses, phone numbers, and specialty) on the network of contracted providers. Such posting does not relieve the MA organization of its responsibility under § 422.111(a) to provide hard copies to enrollees.
(3) The provision of information in writing, upon request.
(a)
(1)
(ii)
(2)
(3)
(4)
(5)
(6)
(i) Timeliness of access to care and member services that meet or exceed standards established by CMS. Timely access to care and member services within a plan's provider network must be continuously monitored to ensure compliance with these standards, and the MA organization must take corrective action as necessary.
(ii) Policies and procedures (coverage rules, practice guidelines, payment policies, and utilization management) that allow for individual medical necessity determinations.
(iii) Provider consideration of beneficiary input into the provider's proposed treatment plan.
(7)
(i) The hours of operation of its MA plan providers are convenient to the population served under the plan and do not discriminate against Medicare enrollees; and
(ii) Plan services are available 24 hours a day, 7 days a week, when medically necessary.
(8)
(9)
(10)
(i) The number and geographical distribution of eligible health care providers available to potentially contract with an MAO to furnish plan covered services within the proposed service area of the MA plans.
(ii) The prevailing market conditions in the service area of the MA plan. Specifically, the number and distribution of health care providers contracting with other health care plans (both commercial and Medicare) operating in the service area of the plan.
(iii) Whether the service area is comprised of rural or urban areas or some combination of the two.
(iv) Whether the MA plan's proposed provider network meet Medicare time
(v) Other factors that CMS determines are relevant in setting a standard for an acceptable health care delivery network in a particular service area.
(b)
(1) Policies that specify under what circumstances services are coordinated and the methods for coordination;
(2) Offering to provide each enrollee with an ongoing source of primary care and providing a primary care source to each enrollee who accepts the offer;
(3) Programs for coordination of plan services with community and social services generally available through contracting or noncontracting providers in the area served by the MA plan, including nursing home and community-based services; and
(4) Procedures to ensure that the MA organization and its provider network have the information required for effective and continuous patient care and quality review, including procedures to ensure that—
(i) The MA organization makes a “best-effort” attempt to conduct an initial assessment of each enrollee's health care needs, including following up on unsuccessful attempts to contact an enrollee, within 90 days of the effective date of enrollment;
(ii) Each provider, supplier, and practitioner furnishing services to enrollees maintains an enrollee health record in accordance with standards established by the MA organization, taking into account professional standards; and
(iii) There is appropriate and confidential exchange of information among provider network components.
(5) Procedures to ensure that enrollees are informed of specific health care needs that require follow-up and receive, as appropriate, training in self-care and other measures they may take to promote their own health; and
(6) Systems to address barriers to enrollee compliance with prescribed treatments or regimens.
(c)
(1) The hospital that the MA regional plan seeks to designate as essential is a general acute care hospital identified as a “subsection(d)” hospital as defined in section 1886(d)(1)(B) of the Act.
(2) The MA regional plan provides convincing evidence to CMS that the MA regional plan needs to contract with the hospital as a condition of meeting access requirements under this section.
(3) The MA regional plan must establish that it made a “good faith” effort to contract with the hospital to be designated as an essential hospital and that the hospital refused to contract with it despite its “good faith” effort. A “good faith” effort to contract will be established to the extent that the MA regional plan can show it has offered the hospital a contract providing for the payment of rates in an amount no less than the amount the hospital would have received had payment been made under section 1886(d) of the Act.
(4) The MA regional plan must establish that there are no competing Medicare participating hospitals in the area to which MA regional plan enrollees could reasonably be referred for inpatient hospital services.
(5) The hospital that is an essential hospital under this paragraph provides convincing evidence to CMS that the amounts normally payable under section 1886 of the Act (and which the MA regional plan has agreed to pay) will be less than the hospital's actual costs of providing care to the MA regional plan's enrollee.
(6) If CMS determines the requirements in paragraphs (c)(1) through (c)(5) of this section have been met, it will make payment to the essential hospital in accordance with section 1858(h)(2) of the Act based on the order in which claims are received, as limited by the amounts specified in section 1858(h)(3) of the Act.
(7) If CMS determines the requirements in paragraphs (c)(1) through (c)(4) of this section have been met, (and if they continue to be met upon annual renewal of the CMS contract with the MA organization offering the MA regional plan), then the hospital designated by the MA regional plan in paragraph (c)(1) of this section shall be “deemed” to be a network hospital to that MA regional plan based on the exception in paragraph (a)(1)(ii) of this section and normal in-network inpatient hospital cost sharing levels (including the catastrophic limit described in § 422.101(d)(2)) shall apply to all plan members accessing covered inpatient hospital services in that hospital.
(a)
(b)
(A) Serious jeopardy to the health of the individual or, in the case of a pregnant woman, the health of the woman or her unborn child;
(B) Serious impairment to bodily functions; or
(C) Serious dysfunction of any bodily organ or part.
(ii)
(A) Furnished by a provider qualified to furnish emergency services; and
(B) Needed to evaluate or stabilize an emergency medical condition.
(iii)
(A) As a result of an unforeseen illness, injury, or condition; and
(B) It was not reasonable given the circumstances to obtain the services through the organization offering the MA plan.
(2)
(i) Regardless of whether the services are obtained within or outside the MA organization;
(ii) Regardless of whether there is prior authorization for the services.
(A) Instructions to seek prior authorization for emergency or urgently needed services may not be included in any materials furnished to enrollees (including wallet card instructions), and enrollees must be informed of their right to call 911.
(B) Instruction to seek prior authorization before the enrollee has been stabilized may not be included in any materials furnished to providers (including contracts with providers);
(iii) In accordance with the prudent layperson definition of
(iv) For which a plan provider or other MA organization representative instructs an enrollee to seek emergency services within or outside the plan; and
(v) With a limit on charges to enrollees for emergency department services that CMS will determine annually, or what it would charge the enrollee if he or she obtained the services through the MA organization, whichever is less.
(3)
(c)
(1)
(2)
(i) Is financially responsible (consistent with § 422.214) for post-stabilization care services obtained within or outside the MA organization that are pre-approved by a plan provider or other MA organization representative;
(ii) Is financially responsible for post-stabilization care services obtained within or outside the MA organization that are not pre-approved by a plan provider or other MA organization representative, but administered to maintain the enrollee's stabilized condition within 1 hour of a request to the MA organization for pre-approval of further post-stabilization care services;
(iii) Is financially responsible for post-stabilization care services obtained within or outside the MA organization that are not pre-approved by a plan provider or other MA organization representative, but administered to maintain, improve, or resolve the enrollee's stabilized condition if—
(A) The MA organization does not respond to a request for pre-approval within 1 hour;
(B) The MA organization cannot be contacted; or
(C) The MA organization representative and the treating physician cannot reach an agreement concerning the enrollee's care and a plan physician is not available for consultation. In this situation, the MA organization must give the treating physician the opportunity to consult with a plan physician and the treating physician may continue with care of the patient until a plan physician is reached or one of the criteria in § 422.113(c)(3) is met; and
(iv) Must limit charges to enrollees for post-stabilization care services to an amount no greater than what the organization would charge the enrollee if he or she had obtained the services through the MA organization. For purposes of cost sharing, post-stabilization care services begin upon inpatient admission.
(3)
(i) A plan physician with privileges at the treating hospital assumes responsibility for the enrollee's care;
(ii) A plan physician assumes responsibility for the enrollee's care through transfer;
(iii) An MA organization representative and the treating physician reach an agreement concerning the enrollee's care; or
(iv) The enrollee is discharged.
(a)
(2) Subject to paragraphs (a)(3) and (a)(4) of this section, CMS finds that an MA organization meets the requirement in paragraph (a)(1) of this section if, with respect to a particular category of health care providers, the MA organization has—
(i) Payment rates that are not less than the rates that apply under original Medicare for the provider in question;
(ii) Subject to paragraph (A) of section (a)(2)(ii), contracts or agreements with a sufficient number and range of providers to furnish the services covered under the MA private fee-for-service plan; or
(A) For plan year 2010 and subsequent plan years, contracts or agreements
(B) [Reserved]
(iii) A combination of paragraphs (a)(2)(i) and (a)(2)(ii) of this section.
(3) For plan year 2011 and subsequent plan years, an MA organization that offers an MA private fee-for-service plan (other than a plan described in section 1857(i)(1) or (2) of the Act) that is operating in a network area (as defined in paragraph (a)(3)(i) of this section) meets the requirement in paragraph (a)(1) of this section only if the MA organization has contracts or agreements with providers in accordance with paragraph (a)(2)(ii)(A) of this section.
(i) Network area is defined, for a given plan year, as the area that the Secretary identifies in the announcement of the risk and other factors to be used in adjusting MA capitation rates for each MA payment area for the previous plan year as having at least 2 network-based plans (as defined in paragraph (a)(3)(ii) of this section) with enrollment as of the first day of the year in which the announcement is made.
(ii) Network-based plan is defined as a coordinated care plan as described in § 422.4(a)(1)(ii), a network-based MSA plan, or a section 1876 reasonable cost plan. A network-based plan excludes a MA regional plan that meets access requirements substantially through the authority of § 422.112(a)(1)(ii) instead of written contracts.
(4) For plan year 2011 and subsequent plan years, an MA organization that offers an MA private fee-for-service plan that is described in section 1857(i)(1) or (2) of the Act meets the requirement in paragraph (a)(1) of this section only if the MA organization has contracts or agreements with providers in accordance with paragraph (a)(2)(ii)(A) of this section.
(b)
(c)
For any medical records or other health and enrollment information it maintains with respect to enrollees, an MA organization must establish procedures to do the following:
(a) Abide by all Federal and State laws regarding confidentiality and disclosure of medical records, or other health and enrollment information. The MA organization must safeguard the privacy of any information that identifies a particular enrollee and have procedures that specify—
(1) For what purposes the information will be used within the organization; and
(2) To whom and for what purposes it will disclose the information outside the organization.
(b) Ensure that medical information is released only in accordance with applicable Federal or State law, or pursuant to court orders or subpoenas.
(c) Maintain the records and information in an accurate and timely manner.
(d) Ensure timely access by enrollees to the records and information that pertain to them.
(a) Each MA organization must maintain written policies and procedures that meet the requirements for advance directives, as set forth in subpart I of part 489 of this chapter. For purposes of this part,
(b) An MA organization must maintain written policies and procedures
(1) An MA organization must provide written information to those individuals with respect to the following:
(i) Their rights under the law of the State in which the organization furnishes services (whether statutory or recognized by the courts of the State) to make decisions concerning their medical care, including the right to accept or refuse medical or surgical treatment and the right to formulate advance directives. Providers may contract with other entities to furnish this information but remain legally responsible for ensuring that the requirements of this section are met. The information must reflect changes in State law as soon as possible, but no later than 90 days after the effective date of the State law.
(ii) The MA organization's written policies respecting the implementation of those rights, including a clear and precise statement of limitation if the MA organization cannot implement an advance directive as a matter of conscience. At a minimum, this statement must do the following:
(A) Clarify any differences between institution-wide conscientious objections and those that may be raised by individual physicians.
(B) Identify the state legal authority permitting such objection.
(C) Describe the range of medical conditions or procedures affected by the conscience objection.
(D) Provide the information specified in paragraph (a)(1) of this section to each enrollee at the time of initial enrollment. If an enrollee is incapacitated at the time of initial enrollment and is unable to receive information (due to the incapacitating condition or a mental disorder) or articulate whether or not he or she has executed an advance directive, the MA organization may give advance directive information to the enrollee's family or surrogate in the same manner that it issues other materials about policies and procedures to the family of the incapacitated enrollee or to a surrogate or other concerned persons in accordance with State law. The MA organization is not relieved of its obligation to provide this information to the enrollee once he or she is no longer incapacitated or unable to receive such information. Follow-up procedures must be in place to ensure that the information is given to the individual directly at the appropriate time.
(E) Document in a prominent part of the individual's current medical record whether or not the individual has executed an advance directive.
(F) Not condition the provision of care or otherwise discriminate against an individual based on whether or not the individual has executed an advance directive.
(G) Ensure compliance with requirements of State law (whether statutory or recognized by the courts of the State) regarding advance directives.
(H) Provide for education of staff concerning its policies and procedures on advance directives.
(I) Provide for community education regarding advance directives that may include material required in paragraph (a)(1)(i) of this section, either directly or in concert with other providers or entities. Separate community education materials may be developed and used, at the discretion of the MA organization. The same written materials are not required for all settings, but the material should define what constitutes an advance directive, emphasizing that an advance directive is designed to enhance an incapacitated individual's control over medical treatment, and describe applicable State law concerning advance directives. An MA organization must be able to document its community education efforts.
(2) The MA organization—
(i) Is not required to provide care that conflicts with an advance directive; and
(ii) Is not required to implement an advance directive if, as a matter of conscience, the MA organization cannot implement an advance directive and State law allows any health care provider or any agent of the provider to conscientiously object.
(3) The MA organization must inform individuals that complaints concerning noncompliance with the advance directive requirements may be filed with
Enrollees of MA organizations are entitled to the protections specified in § 422.504(g).
(a)
(b)
(1) The skilled nursing facility in which the enrollee resided at the time of admission to the hospital preceding the receipt of posthospital extended care services;
(2) A skilled nursing facility that is providing posthospital extended care services through a continuing care retirement community in which the MA plan enrollee was a resident at the time of admission to the hospital. A continuing care retirement community is an arrangement under which housing and health-related services are provided (or arranged) through an organization for the enrollee under an agreement that is effective for the life of the enrollee or for a specified period; or
(3) The skilled nursing facility in which the spouse of the enrollee is residing at the time of discharge from the hospital.
(4) If an MA organization elects to furnish SNF care in the absence of a prior qualifying hospital stay under § 422.101(c), then that SNF care is also subject to the home skilled nursing facility rules in this section. In applying the provisions of this section to coverage under this paragraph, references to a hospitalization, or discharge from a hospital, are deemed to refer to wherever the enrollee resides immediately before admission for extended care services.
(c)
(d)
(1) Require coverage through a skilled nursing facility that is not otherwise qualified to provide benefits under Part A for Medicare beneficiaries not enrolled in the MA plan.
(2) Prevent a skilled nursing facility from refusing to accept, or imposing conditions on the acceptance of, an enrollee for the receipt of posthospital extended care services.
(a)
(1) Have a chronic care improvement program that meets the requirements of paragraph (c) of this section concerning elements of a chronic care program and addresses populations identified by CMS based on a review of current quality performance;
(2) Conduct quality improvement projects that can be expected to have a
(3) Encourage its providers to participate in CMS and HHS quality improvement initiatives.
(b)
(1) In processing requests for initial or continued authorization of services, follow written policies and procedures that reflect current standards of medical practice.
(2) Have in effect mechanisms to detect both underutilization and overutilization of services.
(3) Measure and report performance. The organization offering the plan must do the following:
(i) Measure performance under the plan, using the measurement tools required by CMS, and report its performance to CMS. The standard measures may be specified in uniform data collection and reporting instruments required by CMS.
(ii) Collect, analyze, and report quality performance data identified by CMS that are of the same type as those under paragraph (b)(3)(i) of this section.
(iii) Make available to CMS information on quality and outcomes measures that will enable beneficiaries to compare health coverage options and select among them, as provided in § 422.64.
(4) Special rule for MA local PPO-type plans that are offered by an organization that is licensed or organized under State law as a health maintenance organization must meet the requirements specified in paragraphs (b)(1) through (b)(3) of this section.
(5) All coordinated care contracts (including local and regional PPOs, contracts with exclusively SNP benefit packages, private fee-for-service contracts, and MSA contracts), and all cost contracts under section 1876 of the Act, with 600 or more enrollees in July of the prior year, must contract with approved Medicare Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey vendors to conduct the Medicare CAHPS satisfaction survey of Medicare plan enrollees in accordance with CMS specifications and submit the survey data to CMS.
(c)
(1) Methods for identifying MA enrollees with multiple or sufficiently severe chronic conditions that would benefit from participating in a chronic care improvement program; and
(2) Mechanisms for monitoring MA enrollees that are participating in the chronic care improvement program.
(d)
(i) Measurement of performance.
(ii) System interventions, including the establishment or alteration of practice guidelines.
(iii) Improving performance.
(iv) Systematic and periodic follow-up on the effect of the interventions.
(2) For each project, the organization must assess performance under the plan using quality indicators that are—
(i) Objective, clearly and unambiguously defined, and based on current clinical knowledge or health services research; and
(ii) Capable of measuring outcomes such as changes in health status, functional status and enrollee satisfaction, or valid proxies of those outcomes.
(3) Performance assessment on the selected indicators must be based on systematic ongoing collection and analysis of valid and reliable data.
(4) Interventions must achieve demonstrable improvement.
(5) The organization must report the status and results of each project to CMS as requested.
(e)
(i) Has a network of providers that have agreed to a contractually specified reimbursement for covered benefits with the organization offering the plan;
(ii) Provides for reimbursement for all covered benefits regardless of whether the benefits are provided within the network of providers; and
(iii) Is offered by an organization that is not licensed or organized under State law as a health maintenance organization.
(2) MA organizations offering an MA regional plan or local PPO plan as defined in this section must:
(i) Measure performance under the plan using standard measures required by CMS and report its performance to CMS. The standard measures may be specified in uniform data collection and reporting instruments required by CMS.
(ii) Collect, analyze, and report quality performance data identified by CMS that are of the same type as those described under paragraph (e)(2)(i) of this section.
(iii) Evaluate the continuity and coordination of care furnished to enrollees.
(iv) If the organization uses written protocols for utilization review, the organization must—
(A) Base those protocols on current standards of medical practice; and
(B) Have mechanisms to evaluate utilization of services and to inform enrollees and providers of services of the results of the evaluation.
(f)
(i) Maintain a health information system that collects, analyzes, and integrates the data necessary to implement its quality improvement program;
(ii) Ensure that the information it receives from providers of services is reliable and complete; and
(iii) Make all collected information available to CMS.
(2)
(3)
(g)
(1) Provides for the collection, analysis, and reporting of data that measures health outcomes and indices of quality pertaining to its targeted special needs population (that is, dual-eligible, institutionalized, or chronic condition) at the plan level.
(2) Measures the effectiveness of its model of care through the collection, aggregation, analysis, and reporting of data that demonstrate the following:
(i) Access to care as evidenced by measures from the care coordination domain (for example, service and benefit utilization rates, or timeliness of referrals or treatment).
(ii) Improvement in beneficiary health status as evidenced by measures from functional, psychosocial, or clinical domains (for example, quality of life indicators, depression scales, or chronic disease outcomes).
(iii) Staff implementation of the SNP model of care as evidenced by measures of care structure and process from the continuity of care domain (for example, National Committee for Quality Assurance accreditation measures or medication reconciliation associated with care setting transitions indicators).
(iv) Comprehensive health risk assessment as evidenced by measures from the care coordination domain (for example, accuracy of acuity stratification, safety indicators, or timeliness of initial assessments or annual reassessments).
(v) Implementation of an individualized plan of care as evidenced by measures from functional, psychosocial, or clinical domains (for example, rate of participation by IDT members and beneficiaries in care planning).
(vi) A provider network having targeted clinical expertise as evidenced by measures from medication management, disease management, or behavioral health domains.
(vii) Delivery of services across the continuum of care.
(viii) Delivery of extra services and benefits that meet the specialized needs of the most vulnerable beneficiaries as evidenced by measures from the psychosocial, functional, and end-of-life domains.
(ix) Use of evidence-based practices and nationally recognized clinical protocols.
(x) Use of integrated systems of communication as evidenced by measures from the care coordination domain (for example, call center utilization rates, rates of beneficiary involvement in care plan development, etc.).
(3) Makes available to CMS information on quality and outcomes measures that will—
(i) Enable beneficiaries to compare health coverage options; and
(ii) Enable CMS to monitor the plan's model of care performance.
(h)
(2) For plan year 2010, MA PFFS and MSA plans are not subject to the limitations under § 422.152(e)(1)(i) and must meet the requirements using administrative claims data only.
CMS will acquire from quality improvement organizations (QIOs) as defined in part 475 of this chapter data collected under section 1886(b)(3)(B)(viii) of the Act and subject to the requirements in § 480.140(g). CMS will acquire this information, as needed, and may use it for the following functions:
(a) Enable beneficiaries to compare health coverage options and select among them.
(b) Evaluate plan performance.
(c) Ensure compliance with plan requirements under this part.
(d) Develop payment models.
(e) Other purposes related to MA plans as specified by CMS.
(a)
(1) The MA organization is fully accredited (and periodically reaccredited) for the standards related to the applicable area under paragraph (b) of this section by a private, national accreditation organization approved by CMS; and
(2) The accreditation organization used the standards approved by CMS for the purposes of assessing the MA organization's compliance with Medicare requirements.
(b)
(1)
(2) Antidiscrimination.
(3) Access to services.
(4) Confidentiality and accuracy of enrollee records.
(5) Information on advance directives.
(6) Provider participation rules.
(7) The requirements listed in § 423.165 (b)(1) through (3) of this chapter for MA organizations that offer prescription drug benefit programs.
(c)
(1) The date on which the accreditation organization is approved by CMS.
(2) The date the MA organization is accredited by the accreditation organization.
(d)
(1) Submit to surveys by CMS to validate its accreditation organization's accreditation process; and
(2) Authorize its accreditation organization to release to CMS a copy of its most recent accreditation survey, together with any survey-related information that CMS may require (including corrective action plans and summaries of unmet CMS requirements).
(e)
(1) CMS determines, on the basis of its own investigation, that the MA organization does not meet the Medicare requirements for which deemed status was granted.
(2) CMS withdraws its approval of the accreditation organization that accredited the MA organization.
(3) The MA organization fails to meet the requirements of paragraph (d) of this section.
(f)
(a)
(1) In accrediting MA organizations, it applies and enforces standards that are at least as stringent as Medicare requirements with respect to the standard or standards in question.
(2) It complies with the application and reapplication procedures set forth in § 422.158.
(3) It ensures that:
(i) Any individual associated with it, who is also associated with an entity it accredits, does not influence the accreditation decision concerning that entity.
(ii) The majority of the membership of its governing body is not comprised of managed care organizations or their representatives.
(iii) Its governing body has a broad and balanced representation of interests and acts without bias.
(b)
(i) Announces CMS's receipt of the accreditation organization's application for approval;
(ii) Describes the criteria CMS will use in evaluating the application; and
(iii) Provides at least a 30-day comment period.
(2)
(ii) If CMS grants the request, the final notice specifies the effective date and the term of the approval, which may not exceed 6 years.
(c)
(1) Provide to CMS in written form and on a monthly basis all of the following:
(i) Copies of all accreditation surveys, together with any survey-related information that CMS may require (including corrective action plans and summaries of unmet CMS requirements).
(ii) Notice of all accreditation decisions.
(iii) Notice of all complaints related to deemed MA organizations.
(iv) Information about any MA organization against which the accrediting organization has taken remedial or adverse action, including revocation,
(v) Notice of any proposed changes in its accreditation standards or requirements or survey process. If the organization implements the changes before or without CMS approval, CMS may withdraw its approval of the accreditation organization.
(2) Within 30 days of a change in CMS requirements, submit to CMS—
(i) An acknowledgment of CMS's notification of the change;
(ii) A revised cross-walk reflecting the new requirements; and
(iii) An explanation of how the accreditation organization plans to alter its standards to conform to CMS's new requirements, within the time-frames specified in the notification of change it receives from CMS.
(3) Permit its surveyors to serve as witnesses if CMS takes an adverse action based on accreditation findings.
(4) Within 3 days of identifying, in an accredited MA organization, a deficiency that poses immediate jeopardy to the organization's enrollees or to the general public, give CMS written notice of the deficiency.
(5) Within 10 days of CMS's notice of withdrawal of approval, give written notice of the withdrawal to all accredited MA organizations.
(6) Provide, on an annual basis, summary data specified by CMS that relate to the past year's accreditation activities and trends.
(d)
(1)
(i) CMS imposes new requirements or changes its survey process;
(ii) An accreditation organization proposes to adopt new standards or changes in its survey process; or
(iii) The term of an accreditation organization's approval expires.
(2)
(i) Indicate a 20 percent rate of disparity between certification by the accreditation organization and certification by CMS or its agent on standards that do not constitute immediate jeopardy to patient health and safety if unmet;
(ii) Indicate any disparity between certification by the accreditation organization and certification by CMS or its agent on standards that constitute immediate jeopardy to patient health and safety if unmet; or
(iii) Indicate that, irrespective of the rate of disparity, there are widespread or systematic problems in an organization's accreditation process such that accreditation no longer provides assurance that the Medicare requirements are met or exceeded.
(3)
(4)
(5)
(i) Deeming based on accreditation no longer guarantees that the MA organization meets the MA requirements, and failure to meet those requirements could jeopardize the health or safety of Medicare enrollees and constitute a significant hazard to the public health; or
(ii) The accreditation organization has failed to meet its obligations under this section or under § 422.156 or § 422.158.
(6)
(a)
(1) The types of MA plans that it would review as part of its accreditation process.
(2) A detailed comparison of the organization's accreditation requirements and standards with the Medicare requirements (for example, a crosswalk).
(3) Detailed information about the organization's survey process, including—
(i) Frequency of surveys and whether surveys are announced or unannounced.
(ii) Copies of survey forms, and guidelines and instructions to surveyors.
(iii) Descriptions of—
(A) The survey review process and the accreditation status decision making process;
(B) The procedures used to notify accredited MA organizations of deficiencies and to monitor the correction of those deficiencies; and
(C) The procedures used to enforce compliance with accreditation requirements.
(4) Detailed information about the individuals who perform surveys for the accreditation organization, including—
(i) The size and composition of accreditation survey teams for each type of plan reviewed as part of the accreditation process;
(ii) The education and experience requirements surveyors must meet;
(iii) The content and frequency of the in-service training provided to survey personnel;
(iv) The evaluation systems used to monitor the performance of individual surveyors and survey teams; and
(v) The organization's policies and practice with respect to the participation, in surveys or in the accreditation decision process by an individual who is professionally or financially affiliated with the entity being surveyed.
(5) A description of the organization's data management and analysis system with respect to its surveys and accreditation decisions, including the kinds of reports, tables, and other displays generated by that system.
(6) A description of the organization's procedures for responding to and investigating complaints against accredited organizations, including policies and procedures regarding coordination of these activities with appropriate licensing bodies and ombudsmen programs.
(7) A description of the organization's policies and procedures with respect to the withholding or removal of accreditation for failure to meet the accreditation organization's standards or requirements, and other actions the organization takes in response to noncompliance with its standards and requirements.
(8) A description of all types (for example, full, partial) and categories (for example, provisional, conditional, temporary) of accreditation offered by the organization, the duration of each type and category of accreditation and a statement identifying the types and categories that would serve as a basis
(9) A list of all currently accredited MA organizations and the type, category, and expiration date of the accreditation held by each of them.
(10) A list of all full and partial accreditation surveys scheduled to be performed by the accreditation organization as requested by CMS.
(11) The name and address of each person with an ownership or control interest in the accreditation organization.
(b)
(1) A written presentation that demonstrates its ability to furnish CMS with electronic data in CMS compatible format.
(2) A resource analysis that demonstrates that its staffing, funding, and other resources are adequate to perform the required surveys and related activities.
(3) A statement acknowledging that, as a condition for approval, it agrees to comply with the ongoing responsibility requirements of § 422.157(c).
(c)
(d)
(e)
(1) States whether the request for approval has been granted or denied;
(2) Gives the rationale for any denial; and
(3) Describes the reconsideration and reapplication procedures.
(f)
(g)
(h)
(i) Has revised its accreditation program to correct the deficiencies on which the denial was based;
(ii) Can demonstrate that the MA organizations that it has accredited meet or exceed applicable Medicare requirements; and
(iii) Resubmits the application in its entirety.
(2) An accreditation organization that has requested reconsideration of CMS's denial of its request for approval may not submit a new request until the reconsideration is administratively final.
This subpart is based on sections 1852(a)(1), (a)(2), (b)(2), (c)(2)(D), (j), and (k) of the Act; section 1859(b)(2)(A) of the Act; and the general authority under 1856(b) of the Act requiring the establishment of standards. It sets forth the requirements and standards for the MA organization's relationships with providers including physicians, other health care professionals, institutional providers and suppliers, under contracts or arrangements or deemed contracts under MA private fee-for-service plans. This subpart also contains some requirements that apply to noncontracting providers.
(a)
(1) Written notice of rules of participation including terms of payment, credentialing, and other rules directly related to participation decisions.
(2) Written notice of material changes in participation rules before the changes are put into effect.
(3) Written notice of participation decisions that are adverse to physicians.
(4) A process for appealing adverse participation procedures, including the right of physicians to present information and their views on the decision. In the case of termination or suspension of a provider contract by the MA organization, this process must conform to the rules in § 422.202(d).
(b)
(1) Practice guidelines and utilization management guidelines—
(i) Are based on reasonable medical evidence or a consensus of health care professionals in the particular field;
(ii) Consider the needs of the enrolled population;
(iii) Are developed in consultation with contracting physicians; and
(iv) Are reviewed and updated periodically.
(2) The guidelines are communicated to providers and, as appropriate, to enrollees.
(3) Decisions with respect to utilization management, enrollee education, coverage of services, and other areas in which the guidelines apply are consistent with the guidelines.
(c)
(d)
(1)
(i) The reasons for the action, including, if relevant, the standards and profiling data used to evaluate the physician and the numbers and mix of physicians needed by the MA organization.
(ii) The affected physician's right to appeal the action and the process and timing for requesting a hearing.
(2)
(3)
(4)
(a)
(b)
(1) For providers (other than physicians and other health care professionals) requires determination, and redetermination at specified intervals, that each provider is—
(i) Licensed to operate in the State, and in compliance with any other applicable State or Federal requirements; and
(ii) Reviewed and approved by an accrediting body, or meets the standards established by the organization itself;
(2) For physicians and other health care professionals, including members of physician groups, covers—
(i) Initial credentialing that includes written application, verification of licensure or certification from primary sources, disciplinary status, eligibility for payment under Medicare, and site visits as appropriate. The application must be signed and dated and include an attestation by the applicant of the correctness and completeness of the application and other information submitted in support of the application;
(ii) Recredentialing at least every 3 years that updates information obtained during initial credentialing, considers performance indicators such as those collected through quality improvement programs, utilization management systems, handling of grievances and appeals, enrollee satisfaction surveys, and other plan activities, and that includes an attestation of the correctness and completeness of the new information; and
(iii) A process for consulting with contracting health care professionals with respect to criteria for credentialing and recredentialing.
(3) Specifies that basic benefits must be provided through, or payments must be made to, providers and suppliers that meet applicable requirements of title XVIII and part A of title XI of the Act. In the case of providers meeting the definition of “provider of services” in section 1861(u) of the Act, basic benefits may only be provided through these providers if they have a provider agreement with CMS permitting them to provide services under original Medicare.
(4) Ensures compliance with the requirements at § 422.752(a)(8) that prohibit employment or contracts with individuals (or with an entity that employs or contracts with such an individual) excluded from participation under Medicare and with the requirements at § 422.220 regarding physicians and practitioners who opt out of Medicare.
(a)
(b)
(1) Refusal to grant participation to health care professionals in excess of the number necessary to meet the needs of the plan's enrollees (except for MA private-fee-for-service plans, which may not refuse to contract on this basis).
(2) Use of different reimbursement amounts for different specialties or for different practitioners in the same specialty.
(3) Implementation of measures designed to maintain quality and control
(a)
(i) The patient's health status, medical care, or treatment options (including any alternative treatments that may be self-administered), including the provision of sufficient information to the individual to provide an opportunity to decide among all relevant treatment options;
(ii) The risks, benefits, and consequences of treatment or non-treatment; or
(iii) The opportunity for the individual to refuse treatment and to express preferences about future treatment decisions.
(2) Health care professionals must provide information regarding treatment options in a culturally-competent manner, including the option of no treatment. Health care professionals must ensure that individuals with disabilities have effective communications with participants throughout the health system in making decisions regarding treatment options.
(b)
(1) Objects to the provision of that service on moral or religious grounds; and
(2) Through appropriate written means, makes available information on these policies as follows:
(i) To CMS, with its application for a Medicare contract, within 10 days of submitting its bid proposal or, for policy changes, in accordance with § 422.80 (concerning approval of marketing materials and election forms) and with § 422.111.
(ii) To prospective enrollees, before or during enrollment.
(iii) With respect to current enrollees, the organization is eligible for the exception provided in paragraph (b)(1) of this section if it provides notice of such change within 90 days after adopting the policy at issue; however, under § 422.111(d), notice of such a change must be given in advance.
(c)
(d)
(a)
(b)
(c)
(1) The MA organization makes no specific payment, directly or indirectly, to a physician or physician group as an inducement to reduce or limit medically necessary services furnished to any particular enrollee. Indirect payments may include offerings of monetary value (such as stock options or waivers of debt) measured in the present or future.
(2) If the physician incentive plan places a physician or physician group at substantial financial risk (as determined under paragraph (d) of this section) for services that the physician or physician group does not furnish itself, the MA organization must assure that all physicians and physician groups at substantial financial risk have either aggregate or per-patient stop-loss protection in accordance with paragraph (f) of this section.
(3) For all physician incentive plans, the MA organization provides to CMS the information specified in § 422.210.
(d)
(2)
(3)
(i) Withholds greater than 25 percent of potential payments.
(ii) Withholds less than 25 percent of potential payments if the physician or physician group is potentially liable for amounts exceeding 25 percent of potential payments.
(iii) Bonuses that are greater than 33 percent of potential payments minus the bonus.
(iv) Withholds plus bonuses if the withholds plus bonuses equal more than 25 percent of potential payments. The threshold bonus percentage for a particular withhold percentage may be
(v) Capitation arrangements, if—
(A) The difference between the maximum potential payments and the minimum potential payments is more than 25 percent of the maximum potential payments;
(B) The maximum and minimum potential payments are not clearly explained in the contract with the physician or physician group.
(vi) Any other incentive arrangements that have the potential to hold a physician or physician group liable for more than 25 percent of potential payments.
(e)
(f)
(2)
(ii) For per-patient stop-loss protection if the stop-loss protection provided is on a per-patient basis, the stop-loss limit (deductible) per patient must be determined based on the size of the patient panel and may be a combined policy or consist of separate policies for professional services and institutional services. In determining patient panel size, the patients may be pooled in accordance with paragraph (g) of this section.
(iii) Stop-loss protection must cover 90 percent of the costs of referral services that exceed the per patient deductible limit. The per-patient stop-loss deductible limits are as follows:
(g)
(1) It is otherwise consistent with the relevant contracts governing the compensation arrangements for the physician or physician group.
(2) The physician or physician group is at risk for referral services with respect to each of the categories of patients being pooled.
(3) The terms of the compensation arrangements permit the physician or physician group to spread the risk across the categories of patients being pooled.
(4) The distribution of payments to physicians from the risk pool is not calculated separately by patient category.
(5) The terms of the risk borne by the physician or physician group are comparable for all categories of patients being pooled.
(h)
(a) Assurances to CMS. Each organization will provide assurance satisfactory to the Secretary that the requirements of § 422.208 are met.
(b) Disclosure to Medicare Beneficiaries. Each MA organization must provide the following information to
(1) Whether the MA organization uses a physician incentive plan that affects the use of referral services.
(2) The type of incentive arrangement.
(3) Whether stop-loss protection is provided.
An MA organization may not contract or otherwise provide, directly or indirectly, for any of the following individuals, organizations, or entities to indemnify the organization against any civil liability for damage caused to an enrollee as a result of the MA organization's denial of medically necessary care:
(a) A physician or health care professional.
(b) Provider of services.
(c) Other entity providing health care services.
(d) Group of such professionals, providers, or entities.
(a)
(2) Any statutory provisions (including penalty provisions) that apply to payment for services furnished to a beneficiary not enrolled in an MA plan also apply to the payment described in paragraph (a)(1) of this section.
(b) Services furnished by section 1861(u) providers of service. Any provider of services as defined in section 1861(u) of the Act that does not have in effect a contract establishing payment amounts for services furnished to a beneficiary enrolled in an MA coordinated care plan, an MSA plan, or an MA private fee-for-service plan must accept, as payment in full, the amounts (less any payments under §§ 412.105(g) and 413.76 of this chapter) that it could collect if the beneficiary were enrolled in original Medicare. (Section 412.105(g) concerns indirect medical education payment to hospitals for managed care enrollees. Section 413.76 concerns calculating payment for direct medical education costs.)
(c)
(d)
(a)
(ii) Providers must be reimbursed on a fee-for-service basis.
(iii) The MA organization must make information on its payment rates available to providers that furnish services that may be covered under the MA private fee-for-service plan.
(2)
(3)
(b)
(ii) The organization may permit balance billing no greater than 15 percent of the payment rate established under paragraph (a)(1) of this section.
(iii) The MA organization must specify the amount of cost-sharing and balance billing in its contracts with providers and these amounts must be the same for “deemed” contract providers as for those that have signed contracts in effect, unless access requirements with respect to a particular category of health care providers are met solely through § 422.114(a)(2)(ii) and the MA organization imposes higher beneficiary copayments as permitted under § 422.114(c).
(iv) The MA organization is subject to intermediate sanctions under § 422.752(a)(7), under the rules in subpart O of this part, if it fails to enforce the limit specified in paragraph (b)(1)(i) of this section.
(2)
(c)
(2)
(d)
(2)
(i) Notice that balance billing is permitted for those services;
(ii) A good faith estimate of the likely amount of balance billing, based on the enrollees presenting condition; and
(iii) The amount of any deductible, coinsurance, and copayment that may be due in addition to the balance billing amount.
(e)
(f)
(1) The services are covered under the plan and are furnished—
(i) To an enrollee of an MA fee-for-service plan; and
(ii) Provided by a provider including a provider of services (as defined in section 1861(u) of the Act) that does not have in effect a signed contract with the MA organization.
(2) Before furnishing the services, the provider—
(i) Was informed of the individual's enrollment in the plan; and
(ii) Was informed (or given a reasonable opportunity to obtain information) about the terms and conditions of payment under the plan, including the information described in § 422.202(a)(1).
(3) The information was provided in a manner that was reasonably designed to effect informed agreement and met the requirements of paragraphs (g) and (h) of this section.
(g)
(1) Presentation of an enrollment card or other document attesting to enrollment.
(2) Notice of enrollment from CMS, a Medicare intermediary or carrier, or the MA organization itself.
(h)
(1) The MA organization used postal service, electronic mail, FAX, or telephone to communicate the information to one of the following:
(i) The provider.
(ii) The employer or billing agent of the provider.
(iii) A partnership of which the provider is a member.
(iv) Any party to which the provider makes assignment or reassigns benefits.
(2) The MA organization has in effect a procedure under which—
(i) Any provider furnishing services to an enrollee in an MA private fee-for-service plan, and who has not previously entered into a contract or agreement to furnish services under the plan, can receive instructions on how to request the payment information;
(ii) The organization responds to the request before the entity furnishes the service; and
(iii) The information the organization provides includes the following:
(A) Billing procedures.
(B) The amount the organization will pay towards the service.
(C) The amount the provider is permitted to collect from the enrollee.
(D) The information described in § 422.202(a)(1).
(3) Announcements in newspapers, journals, or magazines or on radio or television are not considered communication of the terms and conditions of payment.
(i)
An MA organization may not pay, directly or indirectly, on any basis, for services (other than emergency or urgently needed services as defined in § 422.2) furnished to a Medicare enrollee by a physician (as defined in section 1861(r)(1) of the Act) or other practitioner (as defined in section 1842(b)(18)(C) of the Act) who has filed with the Medicare carrier an affidavit promising to furnish Medicare-covered services to Medicare beneficiaries only through private contracts under section 1802(b) of the Act with the beneficiaries. An MA organization must pay
This subpart is based largely on section 1854 of the Act, but also includes provisions from section 1853 and section 1858 of the Act. It sets forth the requirements for the Medicare Advantage bidding payment methodology, including CMS' calculation of benchmarks, submission of plan bids by Medicare Advantage (MA) organizations, establishment of beneficiary premiums and rebates through comparison of plan bids and benchmarks, and negotiation and approval of bids by CMS.
(1) The unadjusted MA statutory non-drug monthly bid amount for coverage of original Medicare benefits;
(2) The amount for coverage of basic prescription drug benefits under Part D (if any); and
(3) The amount for provision of supplemental health care benefits (if any).
(a)
(2) CMS has the authority to determine whether and when it is appropriate to apply the bidding methodology described in this section to ESRD MA enrollees.
(3) If the bid submission described in paragraphs (a)(1) and (2) of this section is not complete, timely, or accurate, CMS has the authority to impose sanctions under subpart O of this part or may choose not to renew the contract.
(4)
(5) CMS may decline to accept any or every otherwise qualified bid submitted by an MA organization or potential MA organization.
(b)
(i) The unadjusted MA statutory non-drug monthly bid amount, which is the MA plan's estimated average monthly required revenue for providing benefits under the original Medicare fee-for-service program option (as defined in § 422.252).
(ii) The amount to provide basic prescription drug coverage, if any (defined at section 1860D-2(a)(3) of the Act).
(iii) The amount to provide supplemental health care benefits, if any.
(2) Each bid is for a uniform benefit package for the service area.
(3) Each bid submission must contain all estimated revenue required by the plan, including administrative costs and return on investment.
(4) The bid amount is for plan payments only but must be based on plan assumptions about the amount of revenue required from enrollee cost-sharing. The estimate of plan cost-sharing for the unadjusted MA statutory non-drug monthly bid amount for coverage of original Medicare benefits must reflect the requirement that the level of cost sharing MA plans charge to enrollees must be actuarially equivalent to the level of cost sharing (deductible, copayments, or coinsurance) charged to beneficiaries under the original Medicare program option. The actuarially equivalent level of cost sharing reflected in a regional plan's unadjusted MA statutory non-drug monthly bid amount does not include cost sharing for out-of-network Medicare benefits, as described at § 422.101(d).
(5)
(i) A qualified actuary must certify the plan's actuarial valuation (which may be prepared by others under his or her direction or review).
(ii) To be deemed a qualified actuary, the actuary must be a member of the American Academy of Actuaries.
(iii) Applicants may use qualified outside actuaries to prepare their bids.
(c)
(1) The plan type for each plan.
(2) The monthly aggregate bid amount for the provision of all items and services under the plan, as defined in § 422.252 and discussed in paragraph (a) of this section.
(3) The proportions of the bid amount attributable to-
(i) The provision of benefits under the original Medicare fee-for-service program option (as defined at § 422.100(c));
(ii) The provision of basic prescription drug coverage (as defined at section 1860D-2(a)(3) of the Act; and
(iii) The provision of supplemental health care benefits (as defined § 422.102).
(4) The projected number of enrollees in each MA local area used in calculation of the bid amount, and the enrollment capacity, if any, for the plan.
(5) The actuarial basis for determining the amount under paragraph (c)(2) of this section, the proportions under paragraph (c)(3) of this section, the amount under paragraph (b)(4) of this section, and additional information as CMS may require to verify actuarial bases and the projected number of enrollees.
(6) A description of deductibles, coinsurance, and copayments applicable under the plan and the actuarial value of the deductibles, coinsurance, and copayments.
(7) For qualified prescription drug coverage, the information required under section 1860D-11(b) of the Act with respect to coverage.
(8) For the purposes of calculation of risk corridors under § 422.458, MA organizations offering regional MA plans in 2006 and/or 2007 must submit the following information developed using the appropriate actuarial bases.
(i) Projected allowable costs (defined in § 422.458(a)).
(ii) The portion of projected allowable costs attributable to administrative expenses incurred in providing these benefits.
(iii) The total projected costs for providing rebatable integrated benefits (as defined in § 422.458(a)) and the portion of costs that is attributable to administrative expenses.
(9) For regional plans, as determined by CMS, the relative cost factors for the counties in a plan's service area, for the purposes of adjusting payment under § 422.308(d) for intra-area variations in an MA organization's local payment rates.
(d)
(e)
(1) The enrollment capacity (if any) for the plan;
(2) The amount of the MSA monthly premium for basic benefits under the original Medicare fee-for-service program option;
(3) The amount of the plan deductible; and
(4) The amount of the beneficiary supplemental premium, if any.
(f) Separate bids must be submitted for Part A and Part B enrollees and Part B-only enrollees for each MA plan offered.
(a)
(1) When negotiating bid amounts and proportions, CMS has authority similar to that provided the Director of the Office of Personnel Management for negotiating health benefits plans under 5 U.S.C. chapter 89.
(2)
(ii) CMS may not require a particular price structure for payment under such a contract, with the exception of payments to Federally qualified health centers as set forth at § 422.316.
(b)
(1) The bid amount and proportions are supported by the actuarial bases provided by MA organizations under § 422.254.
(2) The bid amount and proportions reasonably and equitably reflects the plan's estimated revenue requirements for providing the benefits under that plan, as the term revenue requirements is used for purposes of section 1302(8) of the Public Health Service Act.
(3)
(i) The actuarial value of plan basic cost sharing, reduced by any supplemental benefits, may not exceed—
(ii) The actuarial value of deductibles, coinsurance, and copayments that would be applicable for the benefits to individuals entitled to benefits under Part A and enrolled under Part B in the plan's service area with a national average risk profile for the factors described in § 422.308(c) if they were not members of an MA organization for the year, except that cost sharing for non-network Medicare services in a regional MA plan is not counted under the amount described in paragraph (b)(2)(i) of this section.
(4)
(ii) Transition period for MA organizations with new acquisitions. After a 2-year transition period, CMS approves a bid offered by an MA organization (or by a parent organization to that MA organization) that recently purchased (or otherwise acquired or merged with) another MA organization only if it finds that the benefit package or plan costs represented by that bid are substantially different, as provided under paragraph (b)(4)(i) of this section, from any benefit package and plan costs represented by another bid submitted by the same MA organization (or parent organization to that MA organization).
(c)
(d)
(e)
(a) The term “MA area-specific non-drug monthly benchmark amount” means, for a month in a year:
(1) For MA local plans with service areas entirely within a single MA local area:
(i) For years before 2007, one-twelfth of the annual MA capitation rate (described at § 422.306) for the area, adjusted as appropriate for the purpose of risk adjustment.
(ii) For years 2007 through 2010, one-twelfth of the applicable amount determined under section 1853(k)(1) of the Act for the area for the year, adjusted as appropriate for the purpose of risk adjustment.
(iii) For 2011, one-twelfth of the applicable amount determined under 1853(k)(1) for the area for 2010.
(iv) Beginning with 2012, one-twelfth of the blended benchmark amount described in paragraph (d) of this section, subject to paragraph (d)(8) of this section and adjusted as appropriate for the purpose of risk adjustment.
(2) For MA local plans with service areas including more than one MA local area, an amount equal to the weighted average of amounts described in paragraph (a)(1) of this section for the year for each local area (county) in the plan's service area, using as weights the projected number of enrollees in each MA local area that the plan used to calculate the bid amount, and adjusted as appropriate for the purpose of risk adjustment.
(b) For MA regional plans, the term “MA region-specific non-drug monthly benchmark amount” is:
(1) The sum of two components: the statutory component (based on a weighted average of local benchmarks in the region, as described in paragraph (c)(3) of this section; and the plan bid component (based on a weighted average of regional plan bids in the region as described in paragraph (c)(4) of this section).
(2) Announced before November 15 of each year, but after CMS has received the plan bids.
(c)
(1)
(2)
(3)
(ii) CMS then multiplies the unadjusted region-specific non-drug amount from paragraph (c)(3)(i) of this section by the statutory market share to determine the statutory component of the regional benchmark.
(4)
(5)
(i) In the first year that any MA regional plan is being offered in an MA region, and more than one MA regional plan is being offered, CMS will determine each regional plan's share of enrollment based on one of two possible approaches. CMS may base this factor on equal division among plans, so that each plan's share will be 1 divided by the number of plans offered. Alternatively, CMS may base this factor on each regional plan's estimate of projected enrollment. Plan enrollment projections are subject to review and adjustment by CMS to assure reasonableness.
(ii) If two or more regional plans are offered in a region and were offered in the reference month: The plan's share of enrollment will be the number of MA eligible individuals enrolled in the plan divided by the number of MA eligible individuals enrolled in all of the plans in the region, as of the reference month.
(iii) If a single regional plan is being offered in the region: The plan's share of enrollment is equal to 1.
(d)
(2)
(i) In a rebasing year (described at § 422.306(b)(2), an amount equal to the greater of the average FFS expenditure amount at § 422.306(b)(2) for an area for a year and the minimum percentage increase rate at § 422.306(a) for an area for a year.
(ii) In a year when the amounts at § 422.306(b)(2) are not rebased, the minimum percentage increase rate at § 422.306(a) for the area for the year.
(iii) In no case the blended benchmark amount for an area for a year, determined taking into account paragraph (d)(8) of this section, be greater than the applicable amount at paragraph (d)(2) of this section for an area for a year.
(iv) Paragraph (d) of this section does not apply to the PACE program under section 1894 of Act.
(3)
(4)
(i) For 2012, the average FFS expenditure amount specified in § 422.306(b)(2), determined for 2012.
(ii) For subsequent years, the average FFS expenditure amount specified in § 422.306(b)(2).
(5)
(i) For the 50 States or the District of Columbia, a county with an average FFS expenditure amount adjusted under § 422.306(c) that falls in the—
(A) Highest quartile of such rates for all areas for the previous year receives an applicable percentage of 95 percent;
(B) Second highest quartile of such rates for all areas for the previous year receives an applicable percentage of 100 percent;
(C) Third highest quartile of such rates for all areas for the previous year receives an applicable percentage of 107.5 percent; or
(D) Lowest quartile of such rates for all areas for the previous year receives an applicable percentage of 115 percent.
(ii) To determine the applicable percentages for a territory, the Secretary ranks such areas for a year based on the level of the area's § 422.306(b)(2) amount adjusted under § 422.306(c), relative to the quartile rankings computed under paragraph (d)(5)(i) of this section.
(6)
(ii) If, for a year after 2012, there is a change in the quartile in which an area is ranked compared to the previous year's ranking, the applicable percentage for the area in the year must be the average of the applicable percentage for the previous year and the applicable percentage that would otherwise apply for the area for the year in the absence of this transitional provision.
(7)
(i)
(A) For 2012, by 1.5 percentage points.
(B) For 2013, by 3.0 percentage points.
(C) For 2014 and subsequent years, by 5.0 percentage points.
(ii)
(
(
(
(B) Beginning with 2012, for a qualifying plan serving a qualifying county, the increase to the applicable percentage described at paragraph (d)(7)(i) of this section must be doubled for the qualifying county.
(iii) MA organizations that fail to report data as required by the Secretary must be counted as having a rating of fewer than 3.5 stars at the plan or contract level, as determined by the Secretary.
(iv)
(B) For 2013 and subsequent years, the Secretary develops a methodology to apply to MA plans with low enrollment (as defined by the Secretary) to determine whether a low enrollment contract is a qualifying plan.
(v)
(A) For 2012, by 1.5 percentage points.
(B) For 2013, by 2.5 percentage points.
(C) For 2014 and subsequent years, by 3.5 percentage points.
(8)
(i) The projected 2010 benchmark amount is calculated once for the purpose of determining the phase-in period for an area. It is equal to one-half of the 2010 applicable amount at paragraph (d)(2) of this section and one-half of the specified amount at paragraph (d)(3) modified to apply to 2010 (as described in (d)(8)(ii) of this section).
(ii) To assign a phase-in period to an area, the specified amount is modified as if it applies to 2010, and is the product of—
(A) The 2010 base payment amount adjusted as required under § 422.306(c) of this part; and
(B) The applicable percentage determined as if the reference to the “previous year” at paragraph (d)(5) of this section were deemed a reference to 2010 and increased as follows:
(
(
(iii)
(iv)
(v)
(9)
(B) For 2013 and subsequent years, the blended benchmark equals the specified amount.
(ii)
(A) For 2012, three-fourths of the applicable amount for the area for the year and one-fourth of the specified amount for the area and year.
(B) For 2013, one-half of the applicable amount for the area for the year and one-half of the specified amount for the area and year.
(C) For 2014, one-fourth of the applicable amount for the area for the year and three-fourths of the specified amount for the area and year.
(D) For 2015 and subsequent years, the blended benchmark equals the specified amount for the area and year.
(iii)
(A) For 2012, five-sixths of the applicable amount for the area and year and one-sixth of the specified amount for the area and year.
(B) For 2013, two-thirds of the applicable amount for the area and year and one-third of the specified amount for the area and year.
(C) For 2014, one-half of the applicable amount for the area and year and one-half of the specified amount for the area and for year.
(D) For 2015, one-third of the applicable amount for the area and year and two-thirds of the specified amount for the area and for year.
(E) For 2016, one-sixth of the applicable amount for the area and year and five-sixths of the specified amount for the area and for year.
(F) For 2017 and subsequent years, the blended benchmark equals the specified amount for the area and year.
(a)
(b)
(i) Enhanced CMS payments to MA organizations based on the organization's demonstrated quality of its Medicare contract operations; or
(ii) Increased beneficiary rebate retention allowances based on the organization's demonstrated quality of its Medicare contract operations.
(i) Receive a quality bonus payment, as determined by CMS; or
(ii) Retain a portion of its beneficiary rebates based on its quality rating, as determined by CMS.
(c)
(i) The MA organization requesting reconsideration of its QBP status must do so by providing written notice to CMS within 10 business days of the release of its QBP status. The request must specify the given measure(s) in question and the basis for reconsideration such as a calculation error or incorrect data was used to determine the QBP status. The error could impact an individual measure's value or the overall star rating.
(ii) The reconsideration official's decision is final and binding unless a request for an informal hearing is filed in accordance with paragraph (2) of this section.
(2)
(i) The MA organization seeking an appeal of the reconsideration official's decision regarding its QBP status must do so by providing written notice to CMS within 10 business days of the issuance of the reconsideration decision. The notice must specify the errors the MA organization asserts that CMS made in making the QBP determination and how correction of those errors could result in the organization's qualification for a QBP or a higher QBP.
(ii) The MA organization may not request an informal hearing of its QBP status unless it has already requested and received a reconsideration decision in accordance with paragraph (c)(1) of this section.
(iii) The informal hearing request must pertain only to the measure(s) and value(s) in question that precipitated the request for reconsideration.
(iv) The informal hearing is conducted by a CMS hearing officer on the record. The hearing officer receives no testimony, but may accept written statements with exhibits from each party in support of their position in the matter.
(v) The MA organization must provide clear and convincing evidence that CMS' calculations of the measure(s) and value(s) in question were incorrect.
(vi) The hearing officer issues the decision by electronic mail to the MA organization.
(vii) The hearing officer's decision is final and binding.
(3)
(ii) An administrative review cannot be requested for the following: the methodology for calculating the star ratings (including the calculation of the overall star ratings); cut-off points for determining measure thresholds; the set of measures included in the star rating system; and the methodology for determining QBP determinations for low enrollment contracts and new MA plans.
(4)
(d)
(a)
(2) For an MA plan with an unadjusted statutory non-drug bid amount that is equal to or greater than the relevant unadjusted non-drug benchmark amount, the basic beneficiary premium is the amount by which (if any) the bid amount exceeds the benchmark amount. All approved basic premiums must be charged; they cannot be waived.
(b)
(1) The consolidated monthly premium for an MA plan (other than a MSA plan) is the sum of the MA monthly basic beneficiary premium (if any), the MA monthly supplementary beneficiary premium (if any), and the MA monthly prescription drug beneficiary premium (if any).
(2)
(c)
(2)
(d)
(e)
(f)
(1) Withholding from the enrollee's Social Security benefit payments, or benefit payments by the Railroad Retirement Board or the Office of Personnel Management, in the manner that the Part B premium is withheld;
(2) An electronic funds transfer mechanism (such as automatic charges of an account at a financial institution or a credit or debit card account);
(3) According to other means that CMS may specify, including payment by an employer or under employment-based retiree health coverage on behalf of an employee, former employee (or dependent), or by other third parties such as a State.
(i) Regarding the option in paragraph (f)(1) of this section, MA organizations may not impose a charge on beneficiaries for the election of this option.
(ii) An enrollee may opt to make a direct payment of premium to the plan.
(g)
(h)
(a)
(2) The
(3) The
(b)
(c)
(1) For the purpose of calculating savings for MA local plans CMS has the authority to apply risk adjustment factors that are plan-specific average risk adjustment factors, Statewide average risk adjustment factors, or factors determined on a basis other than plan-
(2) In the event that CMS applies Statewide average risk adjustment factors, the statewide factor for each State is the average of the risk factors calculated under § 422.308(c), based on all enrollees in MA local plans in that State in the previous year. In the case of a State in which no local MA plan was offered in the previous year, CMS will estimate an average and may base this average on average risk adjustment factors applied to comparable States or applied on a national basis.
(d)
(e)
(1) For the purpose of calculating savings for MA regional plans, CMS has the authority to apply risk adjustment factors that are plan-specific average risk adjustment factors, Region-wide average risk adjustment factors, or factors determined on a basis other than MA regions.
(2) In the event that CMS applies region-wide average risk adjustment factors, the region-wide factor for each MA region is the average of the risk factors calculated under § 422.308(c), based on all enrollees in MA regional plans in that region in the previous year. In the case of a region in which no regional plan was offered in the previous year, CMS will estimate an average and may base this average on average risk adjustment factors applied to comparable regions or applied on a national basis.
(a)
(2) For 2012 and subsequent years, an MA organization must provide to the enrollee a monthly rebate equal to a specified percentage of the average per capita savings (if any) at § 422.264(b) for MA local plans and § 422.264(d) for MA regional plans. For 2012 and 2013, this percentage is based on a combination of the (a)(1) rule of 75 percent and the (a)(2)(ii) rules that set the percentage based on the plan's quality rating under a 5 star rating system, as determined by the Secretary under § 422.258(d)(7). For 2014 and subsequent years, this percentage is determined based only on the paragraph (a)(2)(ii) of this section.
(i)
(A)
(B)
(ii)
(A) In the case of a plan with a quality rating under such system of at least 4.5 stars, 70 percent of the average per capita savings;
(B) In the case of a plan with a quality rating under such system of at
(C) In the case of a plan with a quality rating under such system of less than 3.5 stars, 50 percent of the average per capita savings.
(iii)
(iv)
(b)
(1)
(2)
(3)
(c)
(a)
(1) Amounts incorrectly collected-
(i) Means amounts that-
(A) Exceed the limits approved under § 422.262;
(B) In the case of an MA private fee-for-service plan, exceed the MA monthly basic beneficiary premium or the MA monthly supplemental premium submitted under § 422.262; and
(C) In the case of an MA MSA plan, exceed the MA monthly beneficiary supplemental premium submitted under § 422.262, or exceed permissible cost sharing amounts after the deductible has been met per § 422.103; and
(ii) Includes amounts collected from an enrollee who was believed to be entitled to Medicare benefits but was later found not to be entitled.
(2)
(i) Emergency, urgently needed services, or other services obtained outside the MA plan; or
(ii) Initially denied but, upon appeal, found to be services the enrollee was entitled to have furnished by the MA organization.
(b)
(c)
(i) Amounts incorrectly collected that were not collected as premiums.
(ii) Other amounts due.
(iii) All amounts due if the MA organization is going out of business or terminating its MA contract for an MA plan(s).
(2)
(3)
(d)
This subpart is based on sections 1853, 1854, and 1858 of the Act. It sets forth the rules for making payments to Medicare Advantage (MA) organizations offering local and regional MA plans, including calculation of MA capitation rates and benchmarks, conditions under which payment is based on plan bids, adjustments to capitation rates (including risk adjustment), and other payment rules.
See § 422.458 in subpart J for rules on risk sharing payments to MA regional organizations.
(a)
(1)
(i) The unadjusted MA statutory non-drug monthly bid amount defined in § 422.252, risk-adjusted as described at § 422.308(c) and adjusted (if applicable) for variations in rates within the plan's service area (described at § 422.258(a)(2)) and for the effects of risk adjustment on beneficiary premiums under § 422.262; and
(ii) The amount (if any) of the rebate described in paragraph (a)(3) of this section.
(2)
(3)
(b)
(1) Direct and reinsurance subsidy payments for qualified prescription drug coverage, described at section 1860D-15(a) and (b) of the Act (other than payments for fallback prescription drug plans described at section 1860D-11(g)(5) of the Act); and
(2) Reimbursement for premium and cost sharing reductions for low-income individuals, described at section 1860D-14 of the Act.
(c)
(ii) CMS publishes annual changes in these capitation rates no later than the first Monday in April each year, as provided in § 422.312.
(iii) CMS applies appropriate adjustments when establishing the rates, including risk adjustment factors.
(iv) CMS reduces the payment rate for each renal dialysis treatment by the same amount that CMS is authorized to reduce the amount of each composite rate payment for each treatment as set forth in section 1881(b)(7) of the Act. These funds are to be used to help pay for the ESRD network program in the same manner as similar reductions are used in original Medicare.
(2)
(3)
(d)
(i) An MA payment area for an MA local plan is an MA local area defined at § 422.252.
(ii) An MA payment area for an MA regional plan is an MA region, defined at § 422.455(b)(1).
(2)
(e)
(2)
(i) A single statewide MA payment area.
(ii) A metropolitan-based system in which all non-metropolitan areas within the State constitute a single payment area and any of the following constitutes a separate MA payment area:
(A) All portions of each single Metropolitan Statistical Area within the State.
(B) All portions of each Metropolitan Statistical Area within each Metropolitan Division within the State.
(iii) A consolidation of noncontiguous counties.
(3)
(4)
(f)
Subject to adjustments at §§ 422.308(b) and 422.308(g), the annual capitation rate for each MA local area is determined under paragraph (a) of this section for 2005 and each succeeding year, except for years when CMS announces under § 422.312(b) that the annual capitation rates will be determined under paragraph (b) of this section, and is then adjusted to exclude the applicable phase-in percentage of the standardized costs for payments under section 1886(d)(5)(B) of the Act in the area for the year under paragraph (c) of this section.
(a)
(b)
(1) The minimum percentage increase rate under paragraph (a) of this section; or
(2) The amount determined, no less frequently than every 3 years, to be the adjusted average per capita cost for the MA local area, as determined under section 1876(a)(4) of the Act, based on 100 percent of fee-for-service costs for individuals who are not enrolled in an MA plan for the year, with the following adjustments:
(i) Adjusted as appropriate for the purpose of risk adjustment;
(ii) Adjusted to exclude costs attributable to payments under section 1886(h) of the Act for the costs of direct graduate medical education;
(iii) Adjusted to include CMS' estimate of the amount of additional per capita payments that would have been made in the MA local area if individuals entitled to benefits under this title had not received services from facilities of the Department of Defense or the Department of Veterans Affairs; and
(iv) Adjusted to exclude costs attributable to payments under sections 1848(o) and 1886(n) of the Act of Medicare FFS incentive payments for meaningful use of electronic health records.
(c)
CMS performs the following calculations and adjustments to determine rates and payments:
(a)
(2) The amount calculated in paragraph (a)(1) of this section must exclude expenditures attributable to sections 1848(a)(7) and (o) and sections 1886(b)(3)(B)(ix) and (n) of the Act.
(b)
(c)
(2)
(ii)
(A) 100 percent of payments for ESRD MA enrollees in 2005 and succeeding years.
(B) 75 percent of payments for aged and disabled enrollees in 2006.
(C) 100 percent of payments for aged and disabled enrollees in 2007 and succeeding years.
(3)
(4)
(ii)
(5)
(ii) In order to ensure payment accuracy, the Secretary annually conducts an analysis of the differences described in paragraph (c)(5)(i) of this section.
(A) The Secretary completes such analysis by a date necessary to ensure that the results of such analysis are incorporated on a timely basis into the risk scores for 2008 and subsequent years.
(B) In conducting such analysis, the Secretary uses data submitted with respect to 2004 and subsequent years, as available and updated as appropriate.
(iii) In calculating each year's adjustment, the adjustment factor is as follows:
(A) For 2014, not less than the adjustment factor applied for 2010, plus 1.3 percentage points.
(B) For each of the years 2015 through 2018, not less than the adjustment factor applied for the previous year, plus 0.25 percentage points.
(C) For 2019 and each subsequent year, not less than 5.7 percent.
(iv) Such adjustment is applied to risk scores until the Secretary implements risk adjustment using MA diagnostic, cost, and use data.
(6)
(ii)
(iii)
(A) Higher medical and care coordination costs associated with frailty, individuals with multiple, comorbid chronic conditions, and individuals with a diagnosis of mental illness; and
(B) Costs that may be associated with higher concentrations of beneficiaries with the conditions specified in paragraph (c)(6)(iii)(A) of this section.
(iv)
(d)
(1)
(2)
(e)
(f)
(2)
(ii) CMS does not make an adjustment unless the beneficiary certifies that, at the time of enrollment under the MA plan, he or she received from the organization the disclosure statement specified in § 422.111.
(g)
(h)
(1) Actual allowable costs (defined in § 422.458(a)) for the previous contract year.
(2) The portion of the costs attributable to administrative expenses incurred in providing these benefits.
(3) The total costs for providing rebatable integrated benefits (as defined in § 422.458(a)) and the portion of the costs that is attributable to administrative expenses in addition to the administrative expenses described in paragraph (h)(2) of this section.
(a)
(b)
(c)
(i) Items and services covered under the original Medicare program.
(ii) Medicare covered items and services for which Medicare is not the primary payer.
(iii) Other additional or supplemental benefits that the MA organization may provide.
(2) The data must account separately for each provider, supplier, physician, or other practitioner that would be permitted to bill separately under the original Medicare program, even if they participate jointly in the same service.
(d)
(2) The data must be submitted electronically to the appropriate CMS contractor.
(3) MA organizations must obtain the risk adjustment data required by CMS from the provider, supplier, physician, or other practitioner that furnished the item or service.
(4) MA organizations may include in their contracts with providers, suppliers, physicians, and other practitioners, provisions that require submission of complete and accurate risk adjustment data as required by CMS. These provisions may include financial penalties for failure to submit complete data.
(e)
(f)
(g)
(1) The annual deadline for risk adjustment data submission is the first
(2) CMS allows a reconciliation process to account for late data submissions. CMS continues to accept risk adjustment data submitted after the March deadline until January 31 of the year following the payment year. After the payment year is completed, CMS recalculates the risk factors for affected individuals to determine if adjustments to payments are necessary. Risk adjustment data that are received after the annual January 31 late data submission deadline will not be accepted for the purposes of reconciliation.
(a)
(b)
(i) Detailed enrollee-level information relating to confirmed enrollee HCC discrepancies.
(ii) The contract-level RADV payment error estimate in dollars.
(iii) The contract-level payment adjustment amount to be made in dollars.
(iv) An approximate timeframe for the payment adjustment.
(v) A description of the MA organization's RADV audit appeal rights.
(2)
(3)
(c)
(A) May submit CMS-generated attestations from physician/practitioner(s) in order to dispute signature-related or credential-related RADV errors in accordance with the attestations provisions of this section.
(B) Are not obligated to submit attestations to CMS.
(ii)
(iii)
(A) Attestations from providers for anything other than signature-related and credential-related errors will not be permitted.
(B) Inpatient provider-type medical records are not eligible for attestation.
(iv)
(B) If an organization decides to submit attestations completed by physicians or other practitioners, the MA organization must submit the attestations to CMS at the same time that the MA organization is required to submit related medical records for RADV audit.
(v)
(A) Contain only CMS-generated attestations.
(B) The CMS attestation form may not be altered unless otherwise instructed and agreed-upon in writing by CMS.
(C) Attestations must be completed and be signed and dated by the eligible risk adjustment physician/practitioner
(D) Attestations must be based upon medical records that document face-to-face encounters between beneficiaries and RADV-eligible physicians/practitioners.
(vi)
(B) Provides written notice of its determination(s) regarding submitted attestations to the MA organization at the time CMS issues its RADV audit report.
(vii)
(B) An MA organization may choose to appeal its medical record review determinations for audited HCCs following initial validation contractor review using a CMS-administered medical record review determination appeal process.
(2)
(B) The medical record review determination appeal process applies only to error determinations from review of the one best medical record submitted by the MA organization and audited by the RADV initial validation contractor (IVC).
(C) MA organizations that choose to appeal the IVC's medical record review determination(s) may only submit the IVC-audited one best medical record and IVC-reviewed attestation, previously submitted in accordance with paragraph (c)(1) of this section, to CMS for re-review.
(D) MA organizations' request for medical record review determination appeal may not include additional documentary evidence beyond the IVC-audited one best medical record and IVC-reviewed attestation.
(ii)
(B) Any other documentation submitted to CMS beyond the one best medical record and attestation submitted to and audited by the IVC will not be reviewed by CMS under the medical record review determination appeal process.
(C) The MA organization's written request for medical record review determination appeal must specify the audited HCC(s) that CMS identified as being in error and eligible for medical record review determination appeal, and that the MA organization wishes to appeal.
(iii)
(B) MA organizations have 30 calendar days from date of issuance of the RADV audit report to file a written request with CMS for medical record review determination appeal.
(C) A request for medical record review determination appeal must specify the determinations with which the MA organization disagrees and the reasons for the request for appeal.
(iv)
(B)
(
(
(
(
(v)
(vi)
(B) The hearing is conducted by a CMS hearing officer who neither receives testimony nor accepts any new evidence that was not presented to the IVC. The CMS hearing officer is limited to the review of the record that was before the IVC.
(vii)
(viii)
(ix)
(x)
(B) After receiving a request for review, the CMS Administrator has the discretion to elect to review the hearing officer's decision or to decline to review the hearing decision.
(C) If the CMS Administrator elects to review the hearing decision, the CMS Administrator—
(
(
(
(
(xi)
(B) The decision of the hearing officer is final if the Administrator—
(
(
(3)
(ii)
(A) Appeal RADV medical record review-related errors as part of the RADV payment error calculation appeal process. In accordance with paragraph (c)(2) of this section, MA organizations that wish to appeal medical record review determinations may do so following issuance of the IVC RADV audit report of findings.
(B) Introduce new HCCs to CMS for payment consideration in the context of their RADV payment error calculation appeal.
(C) Appeal RADV errors that result from an MA organization's failure to submit a medical record.
(D) Appeal CMS' RADV payment error calculation methodology.
(iii)
(B) At the time CMS issues either its IVC or post-medical record review appeal RADV audit report, CMS notifies affected MA organizations in writing of their appeal rights around the RADV payment error calculation.
(C) MA organizations have 30 calendar days from the date of this notice to submit a written request for reconsideration of its RADV payment error calculation.
(iv)
(v)
(A) The written request for reconsideration may include additional documentary evidence the MA organization wishes CMS to consider.
(B) CMS does not accept reconsiderations for issues with the methodology applied in any part of the RADV audit.
(vi)
(
(
(
(B) CMS ensures that a third party—either within CMS or a CMS contractor—not otherwise involved in the initial RADV payment error calculation reviews the written request for reconsideration.
(C) The third party recalculates the payment error in accordance with CMS RADV payment calculation procedures described in CMS' RADV payment error calculation standard operating procedures.
(D) The third party described in paragraph (c)(3)(vi)(B) of this section provides his or her determination to a CMS reconsideration official not otherwise involved in the RADV payment error calculation to review the reconsideration determination.
(vi)
(vii)
(4)
(i)
(ii)
(iii)
(B) The hearing will be held on the record, unless the parties request, subject to the hearing officer's discretion, a live or telephonic hearing. The hearing officer may schedule a live or telephonic hearing on his/her own motion.
(C) The hearing is conducted by the CMS hearing officer who neither receives testimony nor accepts any new evidence that was not presented with the request for reconsideration. The CMS hearing officer is limited to the review of the record that was before CMS when CMS made either its initial RADV payment error calculation determination or its post-medical record review appeal payment error calculation determination and when the CMS reconsideration official issued the written reconsideration decision.
(D) The hearing officer has full power to make rules and establish procedures, consistent with the law, regulations, and CMS rulings. These powers include the authority to dismiss the appeal with prejudice or take any other action which the hearing officer considers appropriate for failure to comply with such rules and procedures.
(iv)
(v)
(vi)
(B) At his or her discretion, the CMS Administrator can choose to either review or not review a case.
(C) If the CMS Administrator chooses to review the case, the CMS Administrator—
(
(
(
(
(
(D) The Administrator notifies both parties of his or her determination regarding review of the hearing decision within 30 calendar days of receiving the request for review.
(E) If the Administrator chooses to review, the Administrator's determination is final and binding.
(F) The decision of the hearing officer is final if the Administrator—
(
(
(a)
(i) The annual MA capitation rate.
(ii) The risk and other factors to be used in adjusting those rates under § 422.308 for payments for months in that year.
(2) CMS includes in the announcement an explanation of assumptions used and a description of the risk and other factors.
(3)
(b)
(2) The MA organizations have 15 days to comment on the proposed changes.
(a)
(1) Must establish an MA MSA with a trustee that meets the requirements of paragraph (b) of this section; and
(2) If he or she has more than one MA MSA, designate the particular account to which payments under the MA MSA plan are to be made.
(b)
(1) Register with CMS;
(2) Certify that it is a licensed bank, insurance company, or other entity qualified, under sections 408(a)(2) or 408(h) of the Internal Revenue Code of 1986, to act as a trustee of individual retirement accounts;
(3) Agree to comply with the MA MSA provisions of section 138 of the Internal Revenue Code of 1986; and
(4) Provide any other information that CMS may require.
(c)
(i) The monthly MA MSA premium is compared with 1/12 of the annual capitation rate applied under this section for the.
(ii) If the monthly MA MSA premium is less than 1/12 of the annual capitation rate applied under this section for the area, the difference is the amount to be deposited in the MA MSA for each month for which the beneficiary is enrolled in the MSA plan.
(2) CMS deposits the full amount to which a beneficiary is entitled under paragraph (c)(1)(ii) of this section for the calendar year, beginning with the month in which MA MSA coverage begins.
(3) If the beneficiary's coverage under the MA MSA plan ends before the end of the calendar year, CMS recovers the amount that corresponds to the remaining months of that year.
If an enrollee in an MA plan receives a service from a Federally qualified health center (FQHC) that has a written agreement with the MA organization offering the plan concerning the provision of this service (including the agreement required under section 1857(e)(3) of the Act and as codified in § 422.527)—
(a) CMS will pay the amount determined under section 1833(a)(3)(B) of the Act directly to the FQHC at a minimum on a quarterly basis, less the amount the FQHC would receive for the MA enrollee from the MA organization (which includes the cost sharing amount the FQHC may charge an enrollee, as established in the contract between the FQHC and the MA organization); and
(b) CMS will not reduce the amount of the monthly payments under this section as a result of the application of paragraph (a) of this section.
(a)
(b)
(1) Payment for inpatient services until the date of the beneficiary's discharge is made by the previous MA organization or original Medicare, as appropriate;
(2) The MA organization offering the newly-elected MA plan is not responsible for the inpatient services until the date after the beneficiary's discharge; and
(3) The MA organization offering the newly-elected MA plan is paid the full amount otherwise payable under this subpart.
(c)
(1) The MA organization is responsible for the inpatient services until the date of the beneficiary's discharge;
(2) Payment for those services during the remainder of the stay is not made by original Medicare or by any succeeding MA organization offering a newly-elected MA plan; and
(3) The MA organization that no longer provides coverage receives no payment for the beneficiary for the period after coverage ends.
(a)
(1) A Medicare hospice program is located within the plan's service area; or
(2) It is common practice to refer patients to hospice programs outside that area.
(b)
(c)
(2) During the time the hospice election is in effect, CMS' monthly capitation payment to the MA organization is reduced to the sum of—
(i) An amount equal to the beneficiary rebate for the MA plan, as described in § 422.304(a)(3) or to zero for plans with no beneficiary rebate, described at § 422.304(a)(2); and
(ii) The amount of the monthly prescription drug payment described in § 423.315 (if any).
(3) In addition, CMS pays through the original Medicare program (subject to the usual rules of payment)—
(i) The hospice program for hospice care furnished to the Medicare enrollee; and
(ii) The MA organization, provider, or supplier for other Medicare-covered services to the enrollee.
(a)
(2) Payments to MA-PD organizations for statutory drug benefits provided under this title are made from
(3) Payments under subpart C of part 495 of this chapter for meaningful use of certified EHR technology are made from the Federal Hospital Insurance Trust Fund or the Supplementary Medical Insurance Trust Fund. In applying section 1848(o) of the Act under sections 1853(l) and 1886(n)(2)of the Act under section 1853(m) of the Act, CMS determines the amount to the extent feasible and practical to be similar to the estimated amount in the aggregate that would be payable for services furnished by professionals and hospitals under Parts B and A, respectively, under title XVIII of the Act.
(b)
(c)
(a) MA organizations may receive direct graduate medical education payments for the time that residents spend in non-hospital provider settings such as freestanding clinics, nursing homes, and physicians' offices in connection with approved programs.
(b) MA organizations may receive direct graduate medical education payments if all of the following conditions are met:
(1) The resident spends his or her time assigned to patient care activities.
(2) The MA organization incurs “all or substantially all” of the costs for the training program in the non-hospital setting as defined in § 413.86(b) of this chapter.
(3) There is a written agreement between the MA organization and the non-hospital site that indicates the MA organization will incur the costs of the resident's salary and fringe benefits and provide reasonable compensation to the non-hospital site for teaching activities.
(c) An MA organization's allowable direct graduate medical education costs, subject to the redistribution and community support principles specified in § 413.85(c) of this chapter, consist of—
(1) Residents' salaries and fringe benefits (including travel and lodging where applicable); and
(2) Reasonable compensation to the non-hospital site for teaching activities related to the training of medical residents.
(d) The direct graduate medical education payment is equal to the product of—
(1) The lower of—
(i) The MA organization's allowable costs per resident as defined in paragraph (c) of this section; or
(ii) The national average per resident amount; and
(2) Medicare's share, which is equal to the ratio of the number of Medicare beneficiaries enrolled to the total number of individuals enrolled in the MA organization.
(e) Direct graduate medical education payments made to MA organizations under this section are made from the Federal Supplementary Medical Insurance Trust Fund.
Nomenclature changes to subpart H appear at 63 FR 35098, 35099, June 26, 1998.
(a)
(1) Authorize provider sponsored organizations, (PSOs), to contract as a MA plan;
(2) Require that a PSO meet certain qualifying requirements; and
(3) Provide for waiver of State licensure for PSOs under specified conditions.
(b)
(1) For an individual, that the individual directly furnishes health care services, or
(2) For an entity, that the entity is organized and operated primarily for the purpose of furnishing health care services directly or through its provider members or entities.
(1) Has been approved by CMS as meeting the requirements to be a guarantor; and
(2) Obligates its resources to a PSO to enable the PSO to meet the solvency requirements required to contract with CMS as an MA organization.
(1) Is established or organized, and operated, by a provider or group of affiliated providers;
(2) Provides a substantial proportion (as defined in § 422.352) of the health care services under the MA contract directly through the provider or affiliated group of providers; and
(3) When it is a group, is composed of affiliated providers who—
(i) Share, directly or indirectly, substantial financial risk, as determined under § 422.356, for the provision of services that are the obligation of the PSO under the MA contract; and
(ii) Have at least a majority financial interest in the PSO.
(a)
(1) Has obtained a waiver of State licensure as provided for under § 422.370;
(2) Meets the definition of a PSO set forth in § 422.350 and other applicable requirements of this subpart; and
(3) Is effectively controlled by the provider or, in the case of a group, by one or more of the affiliated providers that established and operate the PSO.
(b)
(1) For a non-rural PSO, not less than 70% of Medicare services covered under the contract.
(2) For a rural PSO, not less than 60% of Medicare services covered under the contract.
(c)
(1) Demonstrate to CMS that—
(i) It has available in the rural area, as defined in § 412.62(f) of this chapter, routine services including but not limited to primary care, routine specialty care, and emergency services; and
(ii) The level of use of providers outside the rural area is consistent with general referral patterns for the area; and
(2) Enroll Medicare beneficiaries, the majority of which reside in the rural area the PSO serves.
A PSO that consists of two or more providers must demonstrate to CMS'S satisfaction that it meets the following requirements:
(a) The providers are affiliated. For purposes of this subpart, providers are affiliated if, through contract, ownership, or otherwise—
(1) One provider, directly or indirectly, controls, is controlled by, or is under common control with another;
(2) Each provider is part of a lawful combination under which each shares substantial financial risk in connection with the PSO's operations;
(3) Both, or all, providers are part of a controlled group of corporations under section 1563 of the Internal Revenue Code of 1986; or
(4) Both, or all, providers are part of an affiliated service group under section 414 of that Code.
(b) Each affiliated provider of the PSO shares, directly or indirectly, substantial financial risk for the furnishing of services the PSO is obligated to provide under the contract.
(c) Affiliated providers, as a whole or in part, have at least a majority financial interest in the PSO.
(d) For purposes of paragraph(a)(1) of this section, control is presumed to exist if one party, directly or indirectly, owns, controls, or holds the power to vote, or proxies for, not less
(a)
(1) Agreement by a provider to accept capitation payment for each Medicare enrollee.
(2) Agreement by a provider to accept as payment a predetermined percentage of the PSO premium or the PSO's revenue.
(3) The PSO's use of significant financial incentives for its affiliated providers, with the aim of achieving utilization management and cost containment goals. Permissible methods include the following:
(i) Affiliated providers agree to a withholding of a significant amount of the compensation due them, to be used for any of the following:
(A) To cover losses of the PSO.
(B) To cover losses of other affiliated providers.
(C) To be returned to the affiliated provider if the PSO meets its utilization management or cost containment goals for the specified time period.
(D) To be distributed among affiliated providers if the PSO meets its utilization management or cost-containment goals for the specified time period.
(ii) Affiliated providers agree to preestablished cost or utilization targets for the PSO and to subsequent significant financial rewards and penalties (which may include a reduction in payments to the provider) based on the PSO's performance in meeting the targets.
(4) Other mechanisms that demonstrate significant shared financial risk.
(b)
For an organization that seeks to contract to offer an MA plan under this subpart, CMS may waive the State licensure requirement of section 1855(a)(1) of the Act if—
(a) The organization requests a waiver no later than November 1, 2002; and
(b) CMS determines there is a basis for a waiver under § 422.372.
(a)
(b)
(1)
(2)
(i) Denied the license application on the basis of material requirements, procedures, or standards (other than solvency requirements) not generally applied by the State to other entities engaged in a substantially similar business; or
(ii) Required, as a condition of licensure that the organization offer any product or plan other than an MA plan.
(3)
(ii) CMS determines that the State has imposed, as a condition of licensure, any documentation or information requirements relating to solvency or other material requirements, procedures, or standards relating to solvency that are different from the requirements, procedures, or standards set forth by CMS to implement, monitor, and enforce §§ 422.380 through 422.390.
(4)
(a)
(b) CMS gives the organization written notice of granting or denial of waiver within 60 days of receipt of a substantially complete waiver request.
(c)
(d)
(e)
A waiver granted under this section is subject to the following conditions:
(a)
(b)
(c)
(1) Termination of the MA contract;
(2) The organization's compliance with the State licensure requirement of section 1855(a)(1) of the Act; or
(3) The organization's failure to comply with § 422.378.
(a)
(b)
(i) Would apply to the organization if it were licensed under State law;
(ii) Generally apply to other MA organizations and plans in the State; and
(iii) Are consistent with the standards established under this part.
(2) The standards specified in paragraph (b)(1) of this section do not include any standard preempted under section 1856(b)(3)(B) of the Act.
(c)
(d)
(a) At the time an organization applies to contract with CMS as a PSO under this part, the organization must have a minimum net worth amount, as determined under paragraph (c) of this section, of:
(1) At least $1,500,000, except as provided in paragraph (a)(2) of this section.
(2) No less than $1,000,000 based on evidence from the organization's financial plan (under § 422.384) demonstrating to CMS's satisfaction that the organization has available to it an administrative infrastructure that CMS considers appropriate to reduce, control or eliminate start-up administrative costs.
(b) After the effective date of a PSO's MA contract, a PSO must maintain a minimum net worth amount equal to the greater of—
(1) One million dollars;
(2) Two percent of annual premium revenues as reported on the most recent annual financial statement filed with CMS for up to and including the first $150,000,000 of annual premiums and 1 percent of annual premium revenues on premiums in excess of $150,000,000;
(3) An amount equal to the sum of three months of uncovered health care expenditures as reported on the most recent financial statement filed with CMS; or
(4) Using the most recent financial statement filed with CMS, an amount equal to the sum of—
(i) Eight percent of annual health care expenditures paid on a non-capitated basis to non-affiliated providers; and
(ii) Four percent of annual health care expenditures paid on a capitated basis to non-affiliated providers plus annual health care expenditures paid on a non-capitated basis to affiliated providers.
(iii) Annual health care expenditures that are paid on a capitated basis to affiliated providers are not included in the calculation of the net worth requirement (regardless of downstream arrangements from the affiliated provider) under paragraphs (a) and (b)(4) of this section.
(c)
(ii) After the effective date of a PSO's MA contract, a PSO must maintain the greater of $750,000 or 40 percent of the minimum net worth amount in cash or cash equivalents.
(2)
(i)
(B) Up to 10 percent of the minimum net worth amount, if less than $1,000,000 of the minimum net worth amount is met through cash or cash equivalents, or if CMS has used its discretion under paragraph (a)(2) of this section.
(ii)
(B) Up to ten percent of the minimum net worth amount if the greater of $1,000,000 or 67 percent of the minimum net worth amount is not met by cash or cash equivalents.
(3)
(4)
(5)
(6)
(a)
(b)
(1) A detailed marketing plan;
(2) Statements of revenue and expense on an accrual basis;
(3) Cash-flow statements;
(4) Balance sheets;
(5) Detailed justifications and assumptions in support of the financial plan including, where appropriate, certification of reserves and actuarial liabilities by a qualified actuary; and
(6) If applicable, statements of the availability of financial resources to meet projected losses.
(c)
(1) Cover the first 12 months after the estimated effective date of a PSO's MA contract; or
(2) If the PSO is projecting losses, cover 12 months beyond the end of the period for which losses are projected.
(d)
(e)
(1) Meets CMS's requirements for guarantors and guarantee documents as specified in § 422.390; and
(2) Obtains from the guarantor cash or cash equivalents to fund the projected losses timely, as follows—
(i) Prior to the effective date of a PSO's MA contract, the amount of the projected losses for the first two quarters;
(ii) During the first quarter and prior to the beginning of the second quarter of a PSO's MA contract, the amount of projected losses through the end of the third quarter; and
(iii) During the second quarter and prior to the beginning of the third quarter of a PSO's MA contract, the amount of projected losses through the end of the fourth quarter.
(3) If the guarantor complies with the requirements in paragraph (e)(2) of this section, the PSO, in the third quarter, may notify CMS of its intent to reduce the period of advance funding of projected losses. CMS will notify the PSO within 60 days of receiving the PSO's request if the requested reduction in the period of advance funding will not be accepted.
(4) If the guarantee requirements in paragraph (e)(2) of this section are not met, CMS may take appropriate action, such as requiring funding of projected losses through means other than a guarantee. CMS retains discretion to require other methods or timing of funding, considering factors such as the financial condition of the guarantor and the accuracy of the financial plan.
(f)
(g)
(1) Lines of credit from regulated financial institutions;
(2) Legally binding agreements for capital contributions; or
(3) Legally binding agreements of a similar quality and reliability as permitted in paragraphs (g)(1) and (2) of this section.
(h)
(a) A PSO must have sufficient cash flow to meet its financial obligations as they become due and payable.
(b) To determine whether the PSO meets the requirement in paragraph (a) of this section, CMS will examine the following—
(1) The PSO's timeliness in meeting current obligations;
(2) The extent to which the PSO's current ratio of assets to liabilities is maintained at 1:1 including whether there is a declining trend in the current ratio over time; and
(3) The availability of outside financial resources to the PSO.
(c) If CMS determines that a PSO fails to meet the requirement in paragraph (b)(1) of this section, CMS will require the PSO to initiate corrective action and pay all overdue obligations.
(d) If CMS determines that a PSO fails to meet the requirement of paragraph (b)(2) of this section, CMS may require the PSO to initiate corrective action to—
(1) Change the distribution of its assets;
(2) Reduce its liabilities; or
(3) Make alternative arrangements to secure additional funding to restore the PSO's current ratio to 1:1.
(e) If CMS determines that there has been a change in the availability of outside financial resources as required by paragraph (b)(3) of this section, CMS requires the PSO to obtain funding from alternative financial resources.
(a)
(2) The deposit must be restricted to use in the event of insolvency to help assure continuation of services or pay costs associated with receivership or liquidation.
(3) At the time of the PSO's application for an MA contract and, thereafter, upon CMS's request, a PSO must provide CMS with proof of the insolvency deposit, such proof to be in a form that CMS considers appropriate.
(b)
(2) The deposit must at all times have a fair market value of an amount that is 120 percent of the PSO's outstanding liability for uncovered expenditures for enrollees, including incurred, but not reported claims.
(3) The deposit must be calculated as of the first day of each month required and maintained for the remainder of each month required.
(4) If a PSO is not otherwise required to file a quarterly report, it must file a report within 45 days of the end of the calendar quarter with information sufficient to demonstrate compliance with this section.
(5) The deposit required under this section is restricted and in trust for CMS's use to protect the interests of the PSO's Medicare enrollees and to pay the costs associated with administering the insolvency. It may be used only as provided under this section.
(c) A PSO may use the deposits required under paragraphs (a) and (b) of this section to satisfy the PSO's minimum net worth amount required under § 422.382(a) and (b).
(d) All income from the deposits or trust accounts required under paragraphs (a) and (b) of this section, are considered assets of the PSO. Upon CMS's approval, the income from the deposits may be withdrawn.
(e) On prior written approval from CMS, a PSO that has made a deposit under paragraphs (a) or (b) of this section, may withdraw that deposit or any part thereof if—
(1) A substitute deposit of cash or securities of equal amount and value is made;
(2) The fair market value exceeds the amount of the required deposit; or
(3) The required deposit under paragraphs (a) or (b) of this section is reduced or eliminated.
(a)
(b)
(1) Documentation that the guarantor meets the requirements for a guarantor under paragraph (c) of this section; and
(2) The guarantor's independently audited financial statements for the current year-to-date and for the two most recent fiscal years. The financial statements must include the guarantor's balance sheets, profit and loss statements, and cash flow statements.
(c)
(1) Be a legal entity authorized to conduct business within a State of the United States.
(2) Not be under Federal or State bankruptcy or rehabilitation proceedings.
(3) Have a net worth (not including other guarantees, intangibles and restricted reserves) equal to three times the amount of the PSO guarantee.
(4) If the guarantor is regulated by a State insurance commissioner, or other State official with authority for risk-bearing entities, it must meet the net worth requirement in § 422.390(c)(3) with all guarantees and all investments in and loans to organizations covered by guarantees excluded from its assets.
(5) If the guarantor is not regulated by a State insurance commissioner, or other similar State official it must meet the net worth requirement in § 422.390(c)(3) with all guarantees and all investments in and loans to organizations covered by a guarantee and to related parties (subsidiaries and affiliates) excluded from its assets.
(d)
(1) State the financial obligation covered by the guarantee;
(2) Agree to—
(i) Unconditionally fulfill the financial obligation covered by the guarantee; and
(ii) Not subordinate the guarantee to any other claim on the resources of the guarantor;
(3) Declare that the guarantor must act on a timely basis, in any case not more than 5 business days, to satisfy the financial obligation covered by the guarantee; and
(4) Meet other conditions as CMS may establish from time to time.
(e)
(f)
(1) Requests CMS's approval at least 90 days before the proposed effective date of the modification, substitution, or termination;
(2) Demonstrates to CMS's satisfaction that the modification, substitution, or termination will not result in insolvency of the PSO; and
(3) Demonstrates how the PSO will meet the requirements of this section.
(g)
(1) Meet the applicable requirements of this section within 15 business days; and
(2) If required by CMS, meet a portion of the applicable requirements in less than the time period granted in paragraph (g)(1) of this section.
Except in the case of a PSO granted a waiver under subpart H of this part, each MA organization must—
(a) Be licensed under State law, or otherwise authorized to operate under State law, as a risk-bearing entity (as defined in § 422.2) eligible to offer health insurance or health benefits coverage in each State in which it offers one or more MA plans;
(b) If not commercially licensed, obtain certification from the State that the organization meets a level of financial solvency and such other standards as the State may require for it to operate as an MA organization; and
(c) Demonstrate to CMS that—
(1) The scope of its license or authority allows the organization to offer the type of MA plan or plans that it intends to offer in the State; and
(2) If applicable, it has obtained the State certification required under paragraph (b) of this section.
The standards established under this part supersede any State law or regulation (other than State licensing laws or State laws relating to plan solvency) with respect to the MA plans that are offered by MA organizations.
(a)
(b)
CMS will not approve the offering of a local preferred provider organization plan during 2006 or 2007 in a service area unless the MA organization seeking to offer the plan was offering a local preferred provider organization plan in the service area before December 31, 2005.
(a)
(b)
(2)
(ii)
(3)
(i)
(ii)
(4)
(c)
(a)
(b)
(2)
(i) Its total amount of costs that the organization
incurred in providing benefits covered under the original Medicare fee-for-service program option for all enrollees under the plan (as described in paragraph (a) of this section).
(ii) Its total amount of costs that the organization incurred in providing rebatable integrated benefits for all enrollees under the plan (as described in paragraph (a) of this section), and, with respect to those benefits, the portion of those costs that is attributable to administrative expenses that is in addition to the administrative expense incurred in provision of benefits under
(c)
(2)
(ii)
(A) 2.5 percent of that target amount; and
(B) 80 percent of the difference between those allowable costs and 108 percent of that target amount.
(3)
(ii)
(A) 2.5 percent of that target amount; and
(B) 80 percent of the difference between 92 percent of that target amount and those allowable costs.
(d)
(2) According to § 422.504(d)(1)(iii), CMS has the right to inspect and audit any books and records of the organization that pertain to the information regarding costs provided to CMS under paragraph (b)(2) of this section.
(3)
(e)
(i) The MA organization must be licensed to bear risk in at least one State of the region.
(ii) For the other States in a region in which the organization is not licensed to bear risk, if it demonstrates to CMS that it has filed the necessary
(iii) If the State licensing application or applications are denied, CMS may extend the licensing waiver through the end of the plan year or as CMS determines appropriate to provide for a transition.
(2)
(a)
(b)
(1) Sale, exchange, or lease of property.
(2) Loan of money or extension of credit.
(3) Goods, services, or facilities furnished for a monetary consideration, including management services, but not including—
(i) Salaries paid to employees for services performed in the normal course of their employment; or
(ii) Health services furnished to the MA organization's enrollees by hospitals and other providers, and by MA organization staff, medical groups, or independent practice associations, or by any combination of those entities.
(1) A claim that has no defect, impropriety, lack of any required substantiating documentation (consistent with § 422.310(d)) or particular circumstance requiring special treatment that prevents timely payment; and
(2) A claim that otherwise conforms to the clean claim requirements for equivalent claims under original Medicare.
(1) Any director, officer, partner, or employee responsible for management or administration of an MA organization.
(2) Any person who is directly or indirectly the beneficial owner of more than 5 percent of the organization's equity; or the beneficial owner of a mortgage, deed of trust, note, or other interest secured by and valuing more than 5 percent of the organization.
(3) In the case of an MA organization organized as a nonprofit corporation, an incorporator or member of such corporation under applicable State corporation law.
(4) Any entity in which a person described in paragraph (1), (2), or (3) of this definition:
(i) Is an officer, director, or partner; or
(ii) Has the kind of interest described in paragraphs (1), (2), or (3) of this definition.
(5) Any person that directly or indirectly controls, is controlled by, or is under common control with, the MA organization.
(6) Any spouse, child, or parent of an individual described in paragraph (1), (2), or (3) of this definition.
(1) Performs some of the MA organization's management functions under contract or delegation;
(2) Furnishes services to Medicare enrollees under an oral or written agreement; or
(3) Leases real property or sells materials to the MA organization at a cost of more than $2,500 during a contract period.
(a)
(b)
(2) Submitting a Notice of Intent to Apply does not bind that organization to submit an application for the applicable contract year.
(3) An organization's decision not to submit an application after submitting a Notice of Intent To Apply will not form the basis of any action taken against the organization by CMS.
(c)
(i) Documentation of appropriate State licensure or State certification that the entity is able to offer health insurance or health benefits coverage that meets State-specified standards applicable to MA plans, and is authorized by the State to accept prepaid capitation for providing, arranging, or paying for the comprehensive health care services to be offered under the MA contract; or
(ii) For regional plans, documentation of application for State licensure in any State in the region that the organization is not already licensed.
(2) The authorized individual must thoroughly describe how the entity and MA plan meet, or will meet, all the requirements described in this part.
(d)
(2) A CMS determination that an entity is qualified to act as an MA organization is distinct from the bid negotiation that occurs under subpart F of this part and such negotiation is not subject to the appeals provisions included in subpart N of this part.
(e)
(f)
(a)
(2) After evaluating all relevant information, CMS determines whether the applicant's application meets all the requirements described in this part.
(b)
(2) In the absence of 14 months of performance history, CMS may deny an application based on a lack of information available to determine an applicant's capacity to comply with the requirements of the MA program.
(c)
(1)
(2)
(ii) Within 10 days from the date of the intent to deny notice, the contract applicant must respond in writing to the issues or other matters that were the basis for CMS' preliminary finding and must revise its application to remedy any defects CMS identified.
(iii) If CMS does not receive a revised application within 10 days from the date of the notice, or if after timely submission of a revised application, CMS still finds the applicant does not appear qualified to contract as an MA organization or has not provided enough information to allow CMS to evaluate the application, CMS will deny the application.
(3)
(i) That the applicant is not qualified to contract as an MA organization under Part C of title XVIII of the Act;
(ii) The reasons why the applicant is not qualified; and
(iii) The applicant's right to request a hearing in accordance with the procedures specified in subpart N of this part.
(a)
(b)
(1) Complete an application as described in § 422.501.
(2) Be licensed by the State as a risk bearing entity in each State in which
(3) Meet the minimum enrollment requirements of § 422.514, unless waived under § 422.514(b).
(4) Have administrative and management arrangements satisfactory to CMS, as demonstrated by at least the following:
(i) A policy making body that exercises oversight and control over the MA organization's policies and personnel to ensure that management actions are in the best interest of the organization and its enrollees.
(ii) Personnel and systems sufficient for the MA organization to organize, implement, control, and evaluate financial and marketing activities, the furnishing of services, the quality improvement program, and the administrative and management aspects of the organization.
(iii) At a minimum, an executive manager whose appointment and removal are under the control of the policy making body.
(iv) A fidelity bond or bonds, procured and maintained by the MA organization, in an amount fixed by its policymaking body but not less than $100,000 per individual, covering each officer and employee entrusted with the handling of its funds. The bond may have reasonable deductibles, based upon the financial strength of the MA organization.
(v) Insurance policies or other arrangements, secured and maintained by the MA organization and approved by CMS to insure the MA organization against losses arising from professional liability claims, fire, theft, fraud, embezzlement, and other casualty risks.
(vi) Adopt and implement an effective compliance program, which must include measures that prevent, detect, and correct non-compliance with CMS' program requirements as well as measures that prevent, detect, and correct fraud, waste, and abuse. The compliance program must, at a minimum, include the following core requirements:
(A) Written policies, procedures, and standards of conduct that—
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(B) The designation of a compliance officer and a compliance committee who report directly and are accountable to the organization's chief executive or other senior management.
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(C)(
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(D) Establishment and implementation of effective lines of communication, ensuring confidentiality, between the compliance officer, members of the compliance committee, the MA organization's employees, managers and governing body, and the MA organization's first tier, downstream, and related entities. Such lines of communication must be accessible to all and allow compliance issues to be reported including a method for anonymous and confidential good faith reporting of potential compliance issues as they are identified.
(E) Well-publicized disciplinary standards through the implementation of procedures which encourage good faith participation in the compliance program by all affected individuals. These standards must include policies that—
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(F) Establishment and implementation of an effective system for routine monitoring and identification of compliance risks. The system should include internal monitoring and audits and, as appropriate, external audits, to evaluate the MA organization, including first tier entities', compliance with CMS requirements and the overall effectiveness of the compliance program.
(G) Establishment and implementation of procedures and a system for promptly responding to compliance issues as they are raised, investigating potential compliance problems as identified in the course of self-evaluations and audits, correcting such problems promptly and thoroughly to reduce the potential for recurrence, and ensure ongoing compliance with CMS requirements.
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(5) Not accept new enrollees under a section 1876 reasonable cost contract in any area in which it seeks to offer an MA plan.
(6) The MA organization's contract must not have been non-renewed under § 422.506 within the past 2 years unless—
(i) During the 6-month period beginning on the date the organization notified CMS of the intention to non-renew the most recent previous contract, there was a change in the statute or regulations that had the effect of increasing MA payments in the payment area or areas at issue; or
(ii) CMS has otherwise determined that circumstances warrant special consideration.
(7) Not have terminated a contract by mutual consent under which, as a condition of the consent, the MA organization agreed that it was not eligible to apply for new contracts or service area expansions for a period of 2 years per § 422.508(c) of this subpart.
(c)
(d)
(2) Each contract under this section must provide that CMS, or any person or organization designated by CMS has the right to:
(i) Inspect or otherwise evaluate the quality, appropriateness, and timeliness of services performed under the MA contract;
(ii) Inspect or otherwise evaluate the facilities of the organization when there is reasonable evidence of some need for such inspection; and
(iii) Audit and inspect any books, contracts, and records of the MA organization that pertain to—
(A) The ability of the organization or its first tier or downstream providers to bear the risk of potential financial losses; or
(B) Services performed or determinations of amounts payable under the contract.
(e)
(1) The contract will be amended to exclude any MA plan or State-licensed entity specified by CMS; and
(2) A separate contract for any such excluded plan or entity will be deemed to be in place when such a request is made.
The contract between the MA organization and CMS must contain the following provisions:
(a)
(1) To accept new enrollments, make enrollments effective, process voluntary disenrollments, and limit involuntary disenrollments, as provided in subpart B of this part.
(2) That it will comply with the prohibition in § 422.110 on discrimination in beneficiary enrollment.
(3) To provide—
(i) The basic benefits as required under § 422.101 and, to the extent applicable, supplemental benefits under § 422.102; and
(ii) Access to benefits as required under subpart C of this part;
(iii) In a manner consistent with professionally recognized standards of health care, all benefits covered by Medicare.
(4) To disclose information to beneficiaries in the manner and the form prescribed by CMS as required under § 422.111;
(5) To operate a quality assurance and performance improvement program and have an agreement for external quality review as required under subpart D of this part;
(6) To comply with all applicable provider requirements in subpart E of this part, including provider certification requirements, anti-discrimination requirements, provider participation and consultation requirements, the prohibition on interference with provider advice, limits on provider indemnification, rules governing payments to providers, and limits on physician incentive plans;
(7) To comply with all requirements in subpart M of this part governing coverage determinations, grievances, and appeals;
(8) To comply with the reporting requirements in § 422.516 and the requirements in § 422.310 for submitting data to CMS;
(9) That it will be paid under the contract in accordance with the payment rules in subpart G of this part;
(10) To develop its annual bid, and submit all required information on premiums, benefits, and cost-sharing by not later than the first Monday in June, as provided in subpart F of this part;
(11) That its contract may not be renewed or may be terminated in accordance with this subpart and subpart N of this part.
(12) To comply with all requirements that are specific to a particular type of MA plan, such as the special rules for private fee-for-service plans in §§ 422.114 and 422.216 and the MSA requirements in §§ 422.56, 422.103, and 422.262; and
(13) To comply with the confidentiality and enrollee record accuracy requirements in § 422.118.
(14) Maintain a fiscally sound operation by at least maintaining a positive net worth (total assets exceed total liabilities).
(15) Address complaints received by CMS against the MAO by—
(i) Addressing and resolving complaints in the CMS complaint tracking system.
(ii) Displaying a link to the electronic complaint form on the Medicare.gov Internet Web site on the MA plan's main Web page.
(16) An MA organization's compliance with paragraphs (a)(1) through (15) and (c) of this section is material to performance of the contract.
(b)
(c)
(d)
(1) Are sufficient to do the following:
(i) Accommodate periodic auditing of the financial records (including data related to Medicare utilization, costs, and computation of the bid) of MA organizations.
(ii) Enable CMS to inspect or otherwise evaluate the quality, appropriateness and timeliness of services performed under the contract, and the facilities of the organization.
(iii) Enable CMS to audit and inspect any books and records of the MA organization that pertain to the ability of the organization to bear the risk of potential financial losses, or to services performed or determinations of amounts payable under the contract.
(iv) Properly reflect all direct and indirect costs claimed to have been incurred and used in the preparation of the bid proposal.
(v) Establish component rates of the bid for determining additional and supplementary benefits.
(vi) Determine the rates utilized in setting premiums for State insurance agency purposes and for other government and private purchasers; and
(2) Include at least records of the following:
(i) Ownership and operation of the MA organization's financial, medical, and other record keeping systems.
(ii) Financial statements for the current contract period and 10 prior periods.
(iii) Federal income tax or informational returns for the current contract period and 10 prior periods.
(iv) Asset acquisition, lease, sale, or other action.
(v) Agreements, contracts, and subcontracts.
(vi) Franchise, marketing, and management agreements.
(vii) Schedules of charges for the MA organization's fee-for-service patients.
(viii) Matters pertaining to costs of operations.
(ix) Amounts of income received by source and payment.
(x) Cash flow statements.
(xi) Any financial reports filed with other Federal programs or State authorities.
(e)
(1) HHS, the Comptroller General, or their designee may evaluate, through inspection, audit, or other means—
(i) The quality, appropriateness, and timeliness of services furnished to Medicare enrollees under the contract;
(ii) Compliance with CMS requirements for maintaining the privacy and
(iii) The facilities of the MA organization to include computer and other electronic systems; and
(iv) The enrollment and disenrollment records for the current contract period and 10 prior periods.
(2) HHS, the Comptroller General, or their designees may audit, evaluate, or inspect any books, contracts, medical records, patient care documentation, and other records of the MA organization, related entity, contractor, subcontractor, or its transferee that pertain to any aspect of services performed, reconciliation of benefit liabilities, and determination of amounts payable under the contract, or as the Secretary may deem necessary to enforce the contract.
(3) The MA organization agrees to make available, for the purposes specified in paragraph (d) of this section, its premises, physical facilities and equipment, records relating to its Medicare enrollees, and any additional relevant information that CMS may require.
(4) HHS, the Comptroller General, or their designee's right to inspect, evaluate, and audit extends through 10 years from the end of the final contract period or completion of audit, whichever is later unless—
(i) CMS determines there is a special need to retain a particular record or group of records for a longer period and notifies the MA organization at least 30 days before the normal disposition date;
(ii) There has been a termination, dispute, or allegation of fraud or similar fault by the MA organization, in which case the retention may be extended to 6 years from the date of any resulting final resolution of the termination, dispute, fraud, or similar fault; or
(iii) CMS determines that there is a reasonable possibility of fraud or similar fault, in which case CMS may inspect, evaluate, and audit the MA organization at any time.
(f)
(1) To CMS, certified financial information that must include the following:
(i) Such information as CMS may require demonstrating that the organization has a fiscally sound operation.
(ii) Such information as CMS may require pertaining to the disclosure of ownership and control of the MA organization.
(2) To CMS, all information that is necessary for CMS to administer and evaluate the program and to simultaneously establish and facilitate a process for current and prospective beneficiaries to exercise choice in obtaining Medicare services. This information includes, but is not limited to:
(i) The benefits covered under an MA plan;
(ii) The MA monthly basic beneficiary premium and MA monthly supplemental beneficiary premium, if any, for the plan or in the case of an MSA plan, the MA monthly MSA premium.
(iii) The service area and continuation area, if any, of each plan and the enrollment capacity of each plan;
(iv) Plan quality and performance indicators for the benefits under the plan including—
(A) Disenrollment rates for Medicare enrollees electing to receive benefits through the plan for the previous 2 years;
(B) Information on Medicare enrollee satisfaction;
(C) Information on health outcomes;
(D) The recent record regarding compliance of the plan with requirements of this part, as determined by CMS; and
(E) Other information determined by CMS to be necessary to assist beneficiaries in making an informed choice among MA plans and traditional Medicare;
(v) Information about beneficiary appeals and their disposition;
(vi) Information regarding all formal actions, reviews, findings, or other similar actions by States, other regulatory bodies, or any other certifying or accrediting organization;
(vii) To CMS, any other information deemed necessary by CMS for the administration or evaluation of the Medicare program.
(3) To its enrollees all informational requirements under § 422.64 and, upon
(g)
(1) Effective January 1, 2010, each MA organization must adopt and maintain arrangements satisfactory to CMS to protect its enrollees from incurring liability (for example, as a result of an organization's insolvency or other financial difficulties) for payment of any fees that are the legal obligation of the MA organization. To meet this requirement, the MA organization must—
(i) Ensure that all contractual or other written arrangements with providers prohibit the organization's providers from holding any enrollee liable for payment of any such fees;
(ii) Indemnify the enrollee for payment of any fees that are the legal obligation of the MA organization for services furnished by providers that do not contract, or that have not otherwise entered into an agreement with the MA organization, to provide services to the organization's enrollees; and
(iii) For all MA organizations with enrollees eligible for both Medicare and Medicaid, specify in contracts with providers that such enrollees will not be held liable for Medicare Part A and B cost sharing when the State is responsible for paying such amounts, and inform providers of Medicare and Medicaid benefits, and rules for enrollees eligible for Medicare and Medicaid. The MA plans may not impose cost-sharing that exceeds the amount of cost-sharing that would be permitted with respect to the individual under title XIX if the individual were not enrolled in such a plan. The contracts must state that providers will—
(A) Accept the MA plan payment as payment in full, or
(B) Bill the appropriate State source.
(2) The MA organization must provide for continuation of enrollee health care benefits—
(i) For all enrollees, for the duration of the contract period for which CMS payments have been made; and
(ii) For enrollees who are hospitalized on the date its contract with CMS terminates, or, in the event of an insolvency, through discharge.
(3) In meeting the requirements of this paragraph, other than the provider contract requirements specified in paragraph (g)(1)(i) of this section, the MA organization may use—
(i) Contractual arrangements;
(ii) Insurance acceptable to CMS;
(iii) Financial reserves acceptable to CMS; or
(iv) Any other arrangement acceptable to CMS.
(h)
(1) Federal laws and regulations designed to prevent or ameliorate fraud, waste, and abuse, including, but not limited to, applicable provisions of Federal criminal law, the False Claims Act (31 U.S.C. 3729 et. seq.), and the anti-kickback statute (section 1128B(b)) of the Act); and
(2) HIPAA administrative simplification rules at 45 CFR parts 160, 162, and 164.
(i)
(2) The MA organization agrees to require all first tier, downstream, and related entities to agree that—
(i) HHS, the Comptroller General, or their designees have the right to audit, evaluate, and inspect any books, contracts, computer or other electronic systems, including medical records and documentation of the first tier, downstream, and entities related to CMS' contract with the MA organization.
(ii) HHS', the Comptroller General's, or their designee's right to inspect, evaluate, and audit any pertinent information for any particular contract period will exist through 10 years from the final date of the contract period or from the date of completion of any audit, whichever is later.
(3) All contracts or written arrangements between MA organizations and
(i) Enrollee protection provisions that provide, consistent with paragraph (g)(1) of this section, arrangements that prohibit providers from holding an enrollee liable for payment of any fees that are the obligation of the MA organization.
(ii) Accountability provisions that indicate that the MA organization may only delegate activities or functions to a first tier, downstream, or related entity, in a manner consistent with the requirements set forth at paragraph (i)(4) of this section.
(iii) A provision requiring that any services or other activity performed by a first tier, downstream, or related entity in accordance with a contract or written agreement are consistent and comply with the MA organization's contractual obligations.
(4) If any of the MA organizations' activities or responsibilities under its contract with CMS are delegated to other parties, the following requirements apply to any first tier, downstream and related entity:
(i) Written arrangements must specify delegated activities and reporting responsibilities.
(ii) Written arrangements must either provide for revocation of the delegation activities and reporting requirements or specify other remedies in instances where CMS or the MA organization determine that such parties have not performed satisfactorily.
(iii) Written arrangements must specify that the performance of the parties is monitored by the MA organization on an ongoing basis.
(iv) Written arrangements must specify that either—
(A) The credentials of medical professionals affiliated with the party or parties will be either reviewed by the MA organization; or
(B) The credentialing process will be reviewed and approved by the MA organization and the MA organization must audit the credentialing process on an ongoing basis.
(v) All contracts or written arrangements must specify that the related entity, contractor, or subcontractor must comply with all applicable Medicare laws, regulations, and CMS instructions.
(5) If the MA organization delegates selection of the providers, contractors, or subcontractor to another organization, the MA organization's written arrangements with that organization must state that the CMS-contracting MA organization retains the right to approve, suspend, or terminate any such arrangement.
(j)
(k)
(1) The contract will be amended to exclude any MA plan or State-licensed entity specified by CMS; and
(2) A separate contract for any such excluded plan or entity will be deemed to be in place when such a request is made.
(l)
(1) The CEO, CFO, or an individual delegated the authority to sign on behalf of one of these officers, and who reports directly to such officer, must certify that each enrollee for whom the organization is requesting payment is validly enrolled in an MA plan offered by the organization and the information relied upon by CMS in determining payment (based on best knowledge, information, and belief) is accurate, complete, and truthful.
(2) The CEO, CFO, or an individual delegated with the authority to sign on
(3) If such data are generated by a related entity, contractor, or subcontractor of an MA organization, such entity, contractor, or subcontractor must similarly certify (based on best knowledge, information, and belief) the accuracy, completeness, and truthfulness of the data.
(4) The CEO, CFO, or an individual delegated the authority to sign on behalf of one of these officers, and who reports directly to such officer, must certify (based on best knowledge, information, and belief) that the information in its bid submission is accurate, complete, and truthful and fully conforms to the requirements in § 422.254.
(m)(1) CMS may determine that an MA organization is out of compliance with a Part C requirement when the organization fails to meet performance standards articulated in the Part C statutes, regulations, or guidance.
(2) If CMS has not already articulated a measure for determining noncompliance, CMS may determine that a MA organization is out of compliance when its performance in fulfilling Part C requirements represents an outlier relative to the performance of other MA organizations.
(n)
(1) For Part C, the following data—
(i) Average per member per month CMS payment amount for A/B (original Medicare) benefits for each MA plan offered, standardized to the 1.0 (average risk score) beneficiary.
(ii) Average per member per month CMS rebate payment amount for each MA plan offered (or, in the case of MSA plans, the monthly MSA deposit amount).
(iii) Average Part C risk score for each MA plan offered.
(iv) County level average per member per month CMS payment amount for each plan type in that county, weighted by enrollment and standardized to the 1.0 (average risk score) beneficiary in that county.
(2) For Part D plan sponsors, plan payment data in accordance with § 423.505(o) of this subchapter.
(a)
(b)
(c)
(d)
(a)
(2) If an MA organization does not intend to renew its contract, it must notify—
(i) CMS in writing, by the first Monday in June of the year in which the contract would end;
(ii) Each Medicare enrollee by mail at least 90 calendar days before the date on which the nonrenewal is effective. The MA organization must also provide information about alternative enrollment options by doing one or more of the following:
(A) Provide a CMS approved written description of alternative MA plan, MA-PD plan, and PDP options available for obtaining qualified Medicare services within the beneficiaries' region.
(B) Place outbound calls to all affected enrollees to ensure beneficiaries know who to contact to learn about their enrollment options.
(3) CMS may accept a nonrenewal notice submitted after the first Monday in June if—
(i) The MA organization notifies its Medicare enrollees in accordance with paragraph (a)(2)(ii) of this section; and
(ii) Acceptance is not inconsistent with the effective and efficient administration of the Medicare program.
(4) If an MA organization does not renew a contract under this paragraph (a), CMS will not enter into a contract with the organization for 2 years unless there are special circumstances that warrant special consideration, as determined by CMS.
(5) During the same 2-year period as specified in paragraph (a)(4) of this section, CMS will not contract with an organization whose covered persons also served as covered persons for the non-renewing sponsor. A “covered person” as used in this paragraph means one of the following:
(i) All owners of nonrenewed or terminated organizations who are natural persons, other than shareholders who have an ownership interest of less than 5 percent.
(ii) An owner in whole or part interest in any mortgage, deed of trust, note or other obligation secured (in whole or in part) by the organization, or any of the property or assets thereof, which whole or part interest is equal to or exceeds 5 percent of the total property, and assets of the organization.
(iii) A member of the board of directors or board of trustees of the entity, if the organization is organized as a corporation.
(b)
(i) The MA organization has not fully implemented or shown discernable progress in implementing quality improvement projects as defined in § 422.152(d).
(ii) For any of the reasons listed in § 422.510(a), which would also permit CMS to terminate the contract.
(iii) The MA organization has committed any of the acts in § 422.752(a) that would support the imposition of intermediate sanctions or civil money penalties under subpart O of this part.
(iv) The contract must be nonrenewed as to an individual MA plan if that plan does not have a sufficient number of enrollees to establish that it is a viable independent plan option.
(2)
(i) To the MA organization by August 1 of the contract year.
(ii) To each of the MA organization's Medicare enrollees by mail at least 90 calendar days before the date on which the nonrenewal is effective, or at the conclusion of the appeals process if applicable.
(3)
(ii) The MA organization is solely responsible for the identification, development, and implementation of its corrective action plan and for demonstrating to CMS that the underlying deficiencies have been corrected within the time period specified by CMS in the notice requesting corrective action.
(4)
(a) A contract may be modified or terminated at any time by written mutual consent.
(1) If the contract is terminated by mutual consent, except as provided in paragraph (b) of this section, the MA organization must provide notice to its Medicare enrollees and the general public as provided in § 422.512(b)(2) and (b)(3).
(2) If the contract is modified by mutual consent, the MA organization must notify its Medicare enrollees of any changes that CMS determines are appropriate for notification within timeframes specified by CMS.
(b) If the contract terminated by mutual consent is replaced the day following such termination by a new MA contract, the MA organization is not required to provide the notice specified in paragraph (a)(1) of this section.
(c)
(d)
(1) All owners of nonrenewal or terminated organizations who are natural persons, other than shareholders who have an ownership interest of less than 5 percent.
(2) An owner in whole or part interest in any mortgage, deed of trust, note or other obligation secured (in whole or in part) by the organization, or any of the property or assets thereof, which whole or part interest is equal to or exceeds 5 percent of the total property, and assets of the organization.
(3) A member of the board of directors of the entity, if the organization is organized as a corporation.
(a)
(1) Has failed substantially to carry out the contract.
(2) Is carrying out the contract in a manner that is inconsistent with the efficient and effective administration of this part.
(3) No longer substantially meets the applicable conditions of this part.
(4) Based on creditable evidence, has committed or participated in false, fraudulent or abusive activities affecting the Medicare, Medicaid or other State or Federal health care programs, including submission of false or fraudulent data.
(5) Substantially fails to comply with the requirements in subpart M of this part relating to grievances and appeals.
(6) Fails to provide CMS with valid data as required under § 422.310.
(7) Fails to implement an acceptable quality assessment and performance improvement program as required under subpart D of this part.
(8) Substantially fails to comply with the prompt payment requirements in § 422.520.
(9) Substantially fails to comply with the service access requirements in § 422.112 or § 422.114.
(10) Fails to comply with the requirements of § 422.208 regarding physician incentive plans.
(11) Substantially fails to comply with the marketing requirements in subpart V of this part.
(12) Fails to comply with the regulatory requirements contained in this part or part 423 of this chapter or both.
(13) Fails to meet CMS performance requirements in carrying out the regulatory requirements contained in this part or part 423 of this chapter or both.
(b)
(1)
(ii) The MA organization notifies its Medicare enrollees of the termination by mail at least 30 days before the effective date of the termination.
(iii) The MA organization notifies the general public of the termination at least 30 days before the effective date of the termination by publishing a notice in one or more newspapers of general circulation in each community or county located in the MA organization's service area.
(2)
(A) CMS determines that a delay in termination, resulting from compliance with the procedures provided in this part prior to termination, would pose an imminent and serious risk to the health of the individuals enrolled with the MA organization; or
(B) The MA organization experiences financial difficulties so severe that its ability to make necessary health services available is impaired to the point of posing an imminent and serious risk to the health of its enrollees, or otherwise fails to make services available to the extent that such a risk to health exists; or
(C) The contract is being terminated based on the grounds specified in paragraph (a)(4) of this section.
(ii) CMS notifies the MA organization in writing that its contract will be terminated on a date specified by CMS. If a termination is effective in the middle of a month, CMS has the right to recover the prorated share of the capitation payments made to the MA organization covering the period of the month following the contract termination.
(iii) CMS notifies the MA organization's Medicare enrollees in writing of CMS's decision to terminate the MA organization's contract. This notice occurs no later than 30 days after CMS notifies the plan of its decision to terminate the MA contract. CMS simultaneously informs the Medicare enrollees of alternative options for obtaining Medicare services, including alternative MA organizations in a similar geographic area and original Medicare.
(iv) CMS notifies the general public of the termination no later than 30 days after notifying the plan of CMS's decision to terminate the MA contract. This notice is published in one or more newspapers of general circulation in each community or county located in the MA organization's service area.
(c)
(ii) The MA organization is solely responsible for the identification, development, and implementation of its corrective action plan and for demonstrating to CMS that the underlying deficiencies have been corrected within the time period specified by CMS in the notice requesting corrective action.
(2)
(i) CMS determines that a delay in termination, resulting from compliance with the procedures provided in this part prior to termination, would pose an imminent and serious risk to the health of the individuals enrolled with the MA organization;
(ii) The MA organization experiences financial difficulties so severe that its ability to make necessary health services available is impaired to the point of posing an imminent and serious risk
(iii) The contract is being terminated based on the violation specified in (a)(4) of this section.
(d)
(a)
(b)
(1) To CMS, at least 90 days before the intended date of termination. This notice must specify the reasons why the MA organization is requesting contract termination.
(2) To its Medicare enrollees, at least 60 days before the termination effective date. This notice must include a written description of alternatives available for obtaining Medicare services within the services area, including alternative MA plans, Medigap options, original Medicare and must receive CMS approval.
(3) To the general public at least 60 days before the termination effective date by publishing an CMS-approved notice in one or more newspapers of general circulation in each community or county located in the MA organization's geographic area.
(c)
(d)
(e)
(2) During the same 2-year period specified in paragraph (e)(1) of this section, CMS will not contract with an organization whose covered persons also served as covered persons for the terminating sponsor. A “covered person” as used in this paragraph means one of the following:
(i) All owners of nonrenewal or terminated organizations who are natural persons, other than shareholders who have an ownership interest of less than 5 percent.
(ii) An owner in whole or part interest in any mortgage, deed of trust, note or other obligation secured (in whole or in part) by the organization, or any of the property or assets thereof, which whole or part interest is equal to or exceeds 5 percent of the total property and assets of the organization.
(iii) A member of the board of directors of the entity, if the organization is organized as a corporation.
(a)
(1) At least 5,000 individuals (or 1,500 individuals if the organization is a PSO) are enrolled for the purpose of receiving health benefits from the organization; or
(2) At least 1,500 individuals (or 500 individuals if the organization is a PSO) are enrolled for purposes of receiving health benefits from the organization and the organization primarily serves individuals residing outside of urbanized areas as defined in § 412.62(f) (or, in the case of a PSO, the PSO meets the requirements in § 422.352(c)).
(3) Except as provided for in paragraph (b) of this section, an MA organization must maintain a minimum enrollment as defined in paragraphs (a)(1) and (a)(2) of this section for the duration of its contract.
(b)
(i) The contract applicant or MA organization's management and providers have previous experience in managing and providing health care services under a risk-based payment arrangement to at least as many individuals as the applicable minimum enrollment for the entity as described in paragraph (a) of this section, or
(ii) The contract applicant or MA organization has the financial ability to bear financial risk under an MA contract. In determining whether an organization is capable of bearing risk, CMS considers factors such as the organization's management experience as described in paragraph (b)(1)(i) of this section and stop-loss insurance that is adequate and acceptable to CMS; and
(iii) The contract applicant or MA organization is able to establish a marketing and enrollment process that allows it to meet the applicable enrollment requirement specified in paragraph (a) of this section before completion of the third contract year.
(2) If an MA organization fails to meet the enrollment requirement in the first year, CMS may waive the minimum requirements for another year provided that the organization—
(i) Requests an additional minimum enrollment waiver no later than 120 days before the end of the first year;
(ii) Continues to demonstrate it is capable of administering and managing an MA contract and is able to manage the level of risk; and,
(iii) Demonstrates an acceptable marketing and enrollment process. Enrollment projections for the second year of the waiver will become the organization's transitional enrollment standard.
(3) If an MA organization fails to meet the enrollment requirement in the second year, CMS may waive the minimum requirements for the third year only if the organization has attained the transitional enrollment standard as described in paragraph (b)(2)(iii) of this section.
(c) Failure to meet enrollment requirements. CMS may elect not to renew its contract with an MA organization that fails to meet the applicable enrollment requirement in paragraph (a) of this section
(a)
(1) The cost of its operations.
(2) The patterns of utilization of its services.
(3) The availability, accessibility, and acceptability of its services.
(4) To the extent practical, developments in the health status of its enrollees.
(5) Information demonstrating that the MA organization has a fiscally sound operation.
(6) Other matters that CMS may require.
(b)
(1) A description of significant business transactions (as defined in § 422.500) between the MA organization and a party in interest.
(2) With respect to those transactions—
(i) A showing that the costs of the transactions listed in paragraph (c) of this section do not exceed the costs that would be incurred if these transactions were with someone who is not a party in interest; or
(ii) If they do exceed, a justification that the higher costs are consistent with prudent management and fiscal soundness requirements.
(3) A combined financial statement for the MA organization and a party in interest if either of the following conditions is met:
(i) Thirty-five percent or more of the costs of operation of the MA organization go to a party in interest.
(ii) Thirty-five percent or more of the revenue of a party in interest is from the MA organization.
(c)
(2) Inter-entity transactions must be eliminated in the consolidated column.
(3) The statements must have been examined by an independent auditor in accordance with generally accepted accounting principles and must include appropriate opinions and notes.
(4) Upon written request from an MA organization showing good cause, CMS may waive the requirement that the organization's combined financial statement include the financial information required in this paragraph (c) with respect to a particular entity.
(d)
(2) The MA organization must furnish the information to the employer or the employer's designee, or to the plan administrator, as the term “administrator” is defined in ERISA.
(e)
(f)
(g)
(a)
(2) The MA organization must pay interest on clean claims that are not paid within 30 days in accordance with sections 1816(c)(2)(B) and 1842(c)(2)(B).
(3) All other claims from non-contracted providers must be paid or denied within 60 calendar days from the date of the request.
(b)(1)
(2) The MA organization is obligated to pay contracted providers under the terms of the contract between the MA organization and the provider.
(c)
(1) For direct payment of the sums owed to providers, or MA private fee-for-service plan enrollees; and
(2) For appropriate reduction in the amounts that would otherwise be paid to the organization, to reflect the amounts of the direct payments and the cost of making those payments.
(d) A CMS decision to not conduct a hearing under paragraph (c) of this section does not disturb any potential remedy under State law for 1866(a)(1)(O) of the Act.
CMS will not implement, other than at the beginning of a calendar year, requirements under this part that impose a new significant cost or burden on MA organizations or plans, unless a different effective date is required by statute.
In order to participate as an MA organization, an RFB society—
(a) May not impose any limitation on membership based on any factor related to health status; and
(b) Must offer, in addition to the MA RFB plan, health coverage to individuals who are members of the church or convention or group of churches with which the society is affiliated, but who are not entitled to receive benefits from the Medicare program.
The contract between the MA organization and CMS must specify that—
(a) The MA organization must pay a Federally qualified health center (FQHC) a similar amount to what it pays other providers for similar services.
(b) Under such a contract, the FQHC must accept this payment as payment in full, except for allowable cost sharing which it may collect.
(c) Financial incentives, such as risk pool payments or bonuses, and financial withholdings are not considered in determining the payments made by CMS under § 422.316(a).
Nomenclature changes to subpart L appear at 63 FR 35106, June 26, 1998.
(a)
(2)
(3)
(ii) Transfer of corporate stock or the merger of another corporation into the MA organization's corporation, with the MA organization surviving, does not ordinarily constitute change of ownership.
(b)
(2) If the MA organization fails to give CMS the required notice timely, it continues to be liable for capitation payments that CMS makes to it on behalf of Medicare enrollees after the date of change of ownership.
(c)
(1) That is embodied in a document executed and signed by all three parties;
(2) That meets the requirements of § 422.552; and
(3) Under which CMS recognizes the new owner as the successor in interest to the current owner's Medicare contract.
(d)
(1) The existing contract becomes invalid; and
(2) If the new owner wishes to participate in the Medicare program, it must apply for, and enter into, a contract in accordance with subpart K of this part.
(e)
(a)
(1)
(2)
(3)
(i) The proposed new owner is in fact a successor in interest to the contract;
(ii) Recognition of the new owner as a successor in interest to the contract is in the best interest of the Medicare program; and
(iii) The successor organization meets the requirements to qualify as an MA organization under subpart K of this part.
(b)
(2)
(3)
(ii) The new owner must post a performance bond that is satisfactory to CMS.
(4)
(a)
(b)
(2) If the other entity wishes to participate in Medicare as an MA organization, it must apply for and enter into a contract in accordance with subpart K of this part.
(c)
(a)
(2) Section 1852(g) of the Act establishes requirements that an MA organization must meet concerning organization determinations and appeals.
(3) Section 1869 of the Act specifies the amount in controversy needed to pursue a hearing and judicial review and authorizes representatives to act on behalf of individuals that seek appeals. These provisions are incorporated for MA appeals by section 1852(g)(5) of the Act and part 405 of this chapter.
(b)
(1) Requirements for MA organizations with respect to grievance procedures, organization determinations, and appeal procedures.
(2) The rights of MA enrollees with respect to organization determinations, and grievance and appeal procedures.
(3) The rules concerning notice of noncoverage of inpatient hospital care.
(4) The rules that apply when an MA enrollee requests immediate QIO review of a determination that he or she no longer needs inpatient hospital care.
(c)
As used in this subpart, unless the context indicates otherwise—
(a)
(i) A grievance procedure as described in § 422.564 for addressing issues that do not involve organization determinations;
(ii) A procedure for making timely organization determinations;
(iii) Appeal procedures that meet the requirements of this subpart for issues that involve organization determinations; and
(2) An MA organization must ensure that all enrollees receive written information about the—
(i) Grievance and appeal procedures that are available to them through the MA organization; and
(ii) Complaint process available to the enrollee under the QIO process as set forth under section 1154(a)(14) of the Act.
(3) In accordance with subpart K of this part, if the MA organization delegates any of its responsibilities under this subpart to another entity or individual through which the organization provides health care services, the MA organization is ultimately responsible for ensuring that the entity or individual satisfies the relevant requirements of this subpart.
(4) An MA organization must employ a medical director who is responsible for ensuring the clinical accuracy of all organization determinations and reconsiderations involving medical necessity. The medical director must be a physician with a current and unrestricted license to practice medicine in a State, Territory, Commonwealth of the United States (that is, Puerto Rico), or the District of Columbia.
(b)
(1) The right to have grievances between the enrollee and the MA organization heard and resolved, as described in § 422.564.
(2) The right to a timely organization determination, as provided under § 422.566.
(3) The right to request an expedited organization determination, as provided under § 422.570.
(4) If dissatisfied with any part of an organization determination, the following appeal rights:
(i) The right to a reconsideration of the adverse organization determination by the MA organization, as provided under § 422.578.
(ii) The right to request an expedited reconsideration, as provided under § 422.584.
(iii) If, as a result of a reconsideration, an MA organization affirms, in whole or in part, its adverse organization determination, the right to an automatic reconsidered determination made by an independent, outside entity contracted by CMS, as provided in § 422.592.
(iv) The right to an ALJ hearing if the amount in controversy is met, as provided in § 422.600.
(v) The right to request MAC review of the ALJ hearing decision, as provided in § 422.608.
(vi) The right to judicial review of the hearing decision if the amount in controversy is met, as provided in § 422.612.
(c)
(i) The enrollee is not entitled to review of that issue by the MA organization; and
(ii) The QIO review decision is subject only to the appeal procedures set forth in parts 476 and 478 of this chapter.
(2) If an enrollee has no further liability to pay for services that were furnished by an MA organization, a determination regarding these services is not subject to appeal.
(d)
(a)
(b)
(c)
(d)
(2) An enrollee must file a grievance no later than 60 days after the event or incident that precipitates the grievance.
(e)
(2) The MA organization may extend the 30-day timeframe by up to 14 days if the enrollee requests the extension or if the organization justifies a need for additional information and documents how the delay is in the interest of the enrollee. When the MA organization extends the deadline, it must immediately notify the enrollee in writing of the reasons for the delay.
(3) The MA organization must inform the enrollee of the disposition of the grievance in accordance with the following procedures:
(i) All grievances submitted in writing must be responded to in writing.
(ii) Grievances submitted orally may be responded to either orally or in writing, unless the enrollee requests a written response.
(iii) All grievances related to quality of care, regardless of how the grievance is filed, must be responded to in writing. The response must include a description of the enrollee's right to file a written complaint with the QIO. For any complaint submitted to a QIO, the MA organization must cooperate with the QIO in resolving the complaint.
(f)
(1) The complaint involves an MA organization's decision to invoke an extension relating to an organization determination or reconsideration.
(2) The complaint involves an MA organization's refusal to grant an enrollee's request for an expedited organization determination under § 422.570 or reconsideration under § 422.584.
(g)
(a)
(b)
(1) Payment for temporarily out of the area renal dialysis services, emergency services, post-stabilization care, or urgently needed services.
(2) Payment for any other health services furnished by a provider other than the MA organization that the enrollee believes—
(i) Are covered under Medicare; or
(ii) If not covered under Medicare, should have been furnished, arranged for, or reimbursed by the MA organization.
(3) The MA organization's refusal to provide or pay for services, in whole or in part, including the type or level of services, that the enrollee believes should be furnished or arranged for by the MA organization.
(4) Reduction, or premature discontinuation, of a previously authorized ongoing course of treatment.
(5) Failure of the MA organization to approve, furnish, arrange for, or provide payment for health care services in a timely manner, or to provide the enrollee with timely notice of an adverse determination, such that a delay would adversely affect the health of the enrollee.
(c)
(i) The enrollee (including his or her representative);
(ii) Any provider that furnishes, or intends to furnish, services to the enrollee; or
(iii) The legal representative of a deceased enrollee's estate.
(2) Those who can request an expedited determination are—
(i) The enrollee (including his or her representative); or
(ii) A physician (regardless of whether the physician is affiliated with the MA organization).
(d)
(a)
(1) The request may be made orally or in writing, except as provided in paragraph (a)(2) of this section.
(2) Requests for payment must be made in writing (unless the MA organization or entity responsible for making the determination has implemented a voluntary policy of accepting verbal payment requests).
(b)
(c)
(d)
(1) An MA organization decides to deny service or payment in whole or in part, or reduce or prematurely discontinue the level of care for a previously authorized ongoing course of treatment.
(2) An enrollee requests an MA organization to provide an explanation of a practitioner's denial of an item or service, in whole or in part.
(e)
(1) Use approved notice language in a readable and understandable form;
(2) State the specific reasons for the denial;
(3) Inform the enrollee of his or her right to a reconsideration;
(4)(i) For service denials, describe both the standard and expedited reconsideration processes, including the enrollee's right to, and conditions for, obtaining an expedited reconsideration and the rest of the appeal process; and
(ii) For payment denials, describe the standard reconsideration process and the rest of the appeal process; and
(5) Comply with any other notice requirements specified by CMS.
(f)
(a)
(b)
(2) A physician may provide oral or written support for a request for an expedited determination.
(c)
(1) Establish an efficient and convenient means for individuals to submit
(2) Promptly decide whether to expedite a determination, based on the following requirements:
(i) For a request made by an enrollee the MA organization must provide an expedited determination if it determines that applying the standard timeframe for making a determination could seriously jeopardize the life or health of the enrollee or the enrollee's ability to regain maximum function.
(ii) For a request made or supported by a physician, the MA organization must provide an expedited determination if the physician indicates that applying the standard timeframe for making a determination could seriously jeopardize the life or health of the enrollee or the enrollee's ability to regain maximum function.
(d)
(1) Automatically transfer a request to the standard timeframe and make the determination within the 14-day timeframe established in § 422.568 for a standard determination. The 14-day period begins with the day the MA organization receives the request for expedited determination.
(2) Give the enrollee prompt oral notice of the denial and subsequently deliver, within 3 calendar days, a written letter that—
(i) Explains that the MA organization will process the request using the 14-day timeframe for standard determinations;
(ii) Informs the enrollee of the right to file an expedited grievance if he or she disagrees with the MA organization's decision not to expedite; and
(iii) Informs the enrollee of the right to resubmit a request for an expedited determination with any physician's support; and
(iv) Provides instructions about the grievance process and its timeframes.
(e)
(f)
(a)
(b)
(c)
(d)
(e)
(2) If the determination is not completely favorable to the enrollee, the notice must—
(i) Inform the enrollee of his or her right to a reconsideration;
(ii) Describe both the standard and expedited reconsideration processes, including the enrollee's right to request, and conditions for obtaining, an expedited reconsideration, and the rest of the appeal process; and
(iii) Comply with any other requirements specified by CMS.
(f)
The parties to the organization determination are—
(a) The enrollee (including his or her representative);
(b) An assignee of the enrollee (that is, a physician or other provider who has furnished a service to the enrollee and formally agrees to waive any right to payment from the enrollee for that service);
(c) The legal representative of a deceased enrollee's estate; or
(d) Any other provider or entity (other than the MA organization) determined to have an appealable interest in the proceeding.
The organization determination is binding on all parties unless it is reconsidered under §§ 422.578 through 422.596 or is reopened and revised under § 422.616.
Any party to an organization determination (including one that has been reopened and revised as described in § 422.616) may request that the determination be reconsidered under the procedures described in § 422.582, which address requests for a standard reconsideration. A physician who is providing treatment to an enrollee may, upon providing notice to the enrollee, request a standard reconsideration of a pre-service request for reconsideration on the enrollee's behalf as described in § 422.582. An enrollee or physician (acting on behalf of an enrollee) may request an expedited reconsideration as described in § 422.584.
A reconsideration consists of a review of an adverse organization determination, the evidence and findings upon which it was based, and any other evidence the parties submit or the MA organization or CMS obtains.
(a)
(b)
(c)
(2)
(i) Be in writing; and
(ii) State why the request for reconsideration was not filed on time.
(d)
(e)
(a)
(b)
(2) A physician may provide oral or written support for a request for an expedited reconsideration.
(c)
(1)
(2)
(i) For a request made by an enrollee, the MA organization must provide an expedited reconsideration if it determines that applying the standard timeframe for reconsidering a determination could seriously jeopardize the life or health of the enrollee or the enrollee's ability to regain maximum function.
(ii) For a request made or supported by a physician, the MA organization must provide an expedited reconsideration if the physician indicates that applying the standard timeframe for conducting a reconsideration could seriously jeopardize the life or health of the enrollee or the enrollee's ability to regain maximum function.
(d)
(1) Automatically transfer a request to the standard timeframe and make
(2) Give the enrollee prompt oral notice, and subsequently deliver, within 3 calendar days, a written letter that—
(i) Explains that the MA organization will process the enrollee's request using the 30-day timeframe for standard reconsiderations;
(ii) Informs the enrollee of the right to file a grievance if he or she disagrees with the organization's decision not to expedite;
(iii) Informs the enrollee of the right to resubmit a request for an expedited reconsideration with any physician's support; and
(iv) Provides instructions about the grievance process and its timeframes.
(e)
(f)
The MA organization must provide the parties to the reconsideration with a reasonable opportunity to present evidence and allegations of fact or law, related to the issue in dispute, in person as well as in writing. In the case of an expedited reconsideration, the opportunity to present evidence is limited by the short timeframe for making a decision. Therefore, the MA organization must inform the parties of the conditions for submitting the evidence.
(a)
(2) If the MA organization makes a reconsidered determination that affirms, in whole or in part, its adverse organization determination, it must prepare a written explanation and send the case file to the independent entity contracted by CMS as expeditiously as the enrollee's health condition requires, but no later than 30 calendar days from the date it receives the request for a standard reconsideration (or no later than the expiration of an extension described in paragraph (a)(1) of this section). The organization must make reasonable and diligent efforts to assist in gathering and forwarding information to the independent entity.
(b)
(2) If the MA organization affirms, in whole or in part, its adverse organization determination, it must prepare a written explanation and send the case file to the independent entity contracted by CMS no later than 60 calendar days from the date it receives the request for a standard reconsideration. The organization must make reasonable and diligent efforts to assist in gathering and forwarding information to the independent entity.
(c)
(d)
(2)
(3)
(4)
(5)
(e)
(f)
(g)
(2) When the issue is the MA organization's denial of coverage based on a lack of medical necessity (or any substantively equivalent term used to describe the concept of medical necessity), the reconsidered determination must be made by a physician with expertise in the field of medicine that is appropriate for the services at issue. The physician making the reconsidered determination need not, in all cases, be of the same specialty or subspecialty as the treating physician.
(a) When the MA organization affirms, in whole or in part, its adverse organization determination, the issues that remain in dispute must be reviewed and resolved by an independent, outside entity that contracts with CMS.
(b) The independent outside entity must conduct the review as expeditiously as the enrollee's health condition requires but must not exceed the deadlines specified in the contract.
(c) When the independent entity conducts a reconsideration, the parties to the reconsideration are the same parties listed in § 422.582(d) who qualified during the MA organization's reconsideration, with the addition of the MA organization.
(a)
(b)
(1) State the specific reasons for the entity's decisions in understandable language;
(2) If the reconsidered determination is adverse (that is, does not completely reverse the MA organization's adverse organization determination), inform the parties of their right to an ALJ hearing if the amount in controversy is $100 or more;
(3) Describe the procedures that a party must follow to obtain an ALJ hearing; and
(4) Comply with any other requirements specified by CMS.
A reconsidered determination is final and binding on all parties unless a party other than the MA organization files a request for a hearing under the provisions of § 422.602, or unless the reconsidered determination is revised under § 422.616.
(a) If the amount remaining in controversy after reconsideration meets the threshold requirement established annually by the Secretary, any party to the reconsideration (except the MA organization) who is dissatisfied with the reconsidered determination has a right to a hearing before an ALJ.
(b) The amount remaining in controversy, which can include any combination of Part A and Part B services, is computed in accordance with part 405 of this chapter.
(c) If the basis for the appeal is the MA organization's refusal to provide services, CMS uses the projected value of those services to compute the amount remaining in controversy.
(a)
(b)
(c)
(d)
(2) If, after a hearing is initiated, the ALJ finds that the amount in controversy is less than the amount required under § 422.600, the ALJ discontinues the hearing and does not rule on the substantive issues raised in the appeal.
Any party to the hearing, including the MA organization, who is dissatisfied with the ALJ hearing decision, may request that the MAC review the ALJ's decision or dismissal. The regulations under part 405 of this chapter regarding MAC review apply to matters addressed by this subpart to the extent that they are appropriate.
(a)
(1) The Board denied the party's request for review; and
(2) The amount in controversy meets the threshold requirement established annually by the Secretary.
(b)
(c)
(a) An organization or reconsidered determination made by an MA organization, a reconsidered determination made by the independent entity described in § 422.592, or the decision of an ALJ or the MAC that is otherwise final and binding may be reopened and revised by the entity that made the determination or decision, under the rules in part 405 of this chapter.
(b) Reopening may be at the instigation of any party.
(c) The filing of a request for reopening does not relieve the MA organization of its obligation to make payment or provide services as specified in § 422.618.
(d) Once an entity issues a revised determination or decision, any party may file an appeal.
(a)
(2)
(b)
(2)
(c)
(2)
(a)
(b)
(c)
(2)
(a)
(2) For purposes of §§ 422.620 and 422.622, a discharge is a formal release of an enrollee from an inpatient hospital.
(b)
(1)
(2)
(i) The enrollee's rights as a hospital inpatient, including the right to benefits for inpatient services and for post hospital services in accordance with 1866(a)(1)(M) of the Act.
(ii) The enrollee's right to request an immediate review, including a description of the process under § 422.622 and the availability of other appeals processes if the enrollee fails to meet the deadline for an immediate review.
(iii) The circumstances under which an enrollee will or will not be liable for charges for continued stay in the hospital in accordance with 1866(a)(1)(M) of the Act.
(iv) The enrollee's right to receive additional information in accordance with section § 422.622(e).
(v) Any other information required by CMS.
(3)
(i) The enrollee (or the enrollee's representative) has signed and dated the notice to indicate that he or she has received the notice and can comprehend its contents, except as provided in paragraph (b)(4) of this section; and
(ii) The notice is delivered in accordance with paragraph (b)(1) of this section and contains all the elements described in paragraph (b)(2) of this section.
(4)
(c)
(2) Follow up notification is not required if the notice required under 422.620(b) is delivered within 2 calendar days of discharge.
(d)
(a)
(b)
(2) The enrollee, or his or her representative, upon request by the QIO, must be available to discuss the case.
(3) The enrollee may, but is not required to, submit written evidence to be considered by a QIO in making its decision.
(4) An enrollee who makes a timely request for an immediate QIO review in accordance with paragraph (b)(1) of this section is subject to the financial liability protections under paragraph (f) of this section, as applicable.
(5) When an enrollee does not request an immediate QIO review in accordance with paragraph (b) of this section, he or she may request expedited reconsideration by the MA organization as described in § 422.584, but the financial liability rules of paragraph (f) of this section do not apply.
(c)
(d)
(2) The QIO determines whether the hospital delivered valid notice consistent with § 422.620(b)(3).
(3) The QIO examines the medical and other records that pertain to the services in dispute.
(4) The QIO must solicit the views of the enrollee (or his or her representative) who requested the immediate QIO review.
(5) The QIO must provide an opportunity for the MA organization to explain why the discharge is appropriate.
(6) When the enrollee requests an immediate QIO review in accordance with paragraph (b)(1) of this section, the QIO must make a determination and notify the enrollee, the hospital, the MA organization, and the physician of its determination within one calendar day after it receives all requested pertinent information.
(7) If the QIO does not receive the information needed to sustain an MA organization's decision to discharge, it may make its determination based on the evidence at hand, or it may defer a decision until it receives the necessary information. If this delay results in extended Medicare coverage of an individual's hospital services, the MA organization may be held financially liable for these services, as determined by the QIO.
(8) When the QIO issues its determination, the QIO must notify the enrollee, the MA organization, the physician, and hospital of its decision by telephone, followed by a written notice that must include the following information:
(i) The basis for the determination.
(ii) A detailed rationale for the determination.
(iii) An explanation of the Medicare payment consequences of the determination and the date an enrollee becomes fully liable for the services.
(iv) Information about the enrollee's right to a reconsideration of the QIO's determination as set forth in § 422.626(f), including how to request a reconsideration and the time period for doing so.
(e)
(i) A detailed explanation of why services are either no longer reasonable and necessary or are no longer covered.
(ii) A description of any applicable Medicare coverage rule, instruction, or other Medicare policy including information about how the enrollee may obtain a copy of the Medicare policy from the MA organization.
(iii) Any applicable MA organization policy, contract provision, or rationale upon which the discharge determination was based.
(iv) Facts specific to the enrollee and relevant to the coverage determination sufficient to advise the enrollee of the applicability of the coverage rule or policy to the enrollee's case.
(v) Any other information required by CMS.
(2) Upon notification by the QIO of a request for an immediate review, the MA organization must supply any and all information, including a copy of the notices sent to the enrollee, as specified in § 422.620(b) and (c) and paragraph (e)(1) of this section, that the QIO needs to decide on the determination. The MA organization must supply this information as soon as possible, but no later than noon of the day after the QIO notifies the MA organization that a request for an expedited determination has been received from the enrollee. The MA organization must make the information available by phone (with a written record made of any information not transmitted initially in writing) and/or in writing, as determined by the QIO.
(3) In response to a request from the MA organization, the hospital must supply all information that the QIO needs to make its determination, including a copy of the notices required as specified in § 422.620(b) and (c) and paragraph (e)(1) of this section. The hospital must furnish this information as soon as possible, but no later than by close of business of the day the MA organization notifies the hospital of the request for information. At the discretion of the QIO, the hospital must make the information available by phone or in writing (with a written record of any information not transmitted initially in writing).
(4) Upon an enrollee's request, the MA organization must provide the enrollee a copy of, or access to, any documentation sent to the QIO by the MA organization, including written records of any information provided by telephone. The MA organization may charge the enrollee a reasonable amount to cover the costs of duplicating the documentation for the enrollee and/or delivering the documentation to the enrollee. The MA organization must accommodate such a request by no later than close of business of the first day after the day the material is requested.
(f)
(2) When the MA organization determines that hospital services are not, or are no longer, covered,
(i) If the MA organization authorized coverage of the inpatient admission directly or by delegation (or the admission constitutes emergency or urgently needed care, as described in §§ 422.2 and 422.112(c)), the MA organization continues to be financially responsible for the costs of the hospital stay when an appeal is filed under paragraph (a)(1) of this section until noon of the day after the QIO notifies the enrollee of its review determination, except as provided in paragraph (b)(5) of this section. If coverage of the hospital admission was never approved by the MA organization or the admission does not constitute emergency or urgently needed care as described in §§ 422.2 and 422.112(c), the MA organization is liable for the hospital costs only if it is determined on appeal that the hospital stay should have been covered under the MA plan.
(ii) The hospital may not charge the MA organization (or the enrollee) if—
(A) It was the hospital (acting on behalf of the enrollee) that filed the request for immediate QIO review; and
(B) The QIO upholds the non-coverage determination made by the MA organization.
(3) If the QIO determines that the enrollee still requires inpatient hospital care, the hospital must provide the enrollee with a notice consistent with
(4) If the hospital determines that inpatient hospital services are no longer necessary, the hospital may not charge the enrollee for inpatient services received before noon of the day after the QIO notifies the enrollee of its review determination.
(g)
(1)
(2)
(a)
(2)
(b)
(1)
(2)
(i) The date that coverage of services ends.
(ii) The date that the enrollee's financial liability for continued services begins.
(iii) A description of the enrollee's right to a fast-track appeal under § 422.626, including information about how to contact an independent review entity (IRE), an enrollee's right (but not obligation) to submit evidence showing that services should continue, and the availability of other MA appeal procedures if the enrollee fails to meet the deadline for a fast-track IRE appeal.
(iv) The enrollee's right to receive detailed information in accordance with § 422.626 (e)(1) and (2).
(v) Any other information required by the Secretary.
(c)
(1) The enrollee (or the enrollee's representative) has signed and dated the notice to indicate that he or she has received the notice and can comprehend its contents; and
(2) The notice is delivered in accordance with paragraph (b)(1) of this section and contains all the elements described in paragraph (b)(2) of this section.
(d)
(a)
(1) An enrollee who desires a fast-track appeal must submit a request for an appeal to an IRE under contract with CMS, in writing or by telephone, by noon of the first day after the day of delivery of the termination notice. If, due to an emergency, the IRE is closed and unable to accept the enrollee's request for a fast-track appeal, the enrollee must file a request by noon of the next day that the IRE is open for business.
(2) When an enrollee fails to make a timely request to an IRE, he or she may request an expedited reconsideration by the MA organization as described in § 422.584.
(3) If, after delivery of the termination notice, an enrollee chooses to leave a provider or discontinue receipt of covered services on or before the proposed termination date, the enrollee may not later assert fast-track IRE appeal rights under this section relative to the services or expect the services to resume, even if the enrollee requests an appeal before the discontinuation date in the termination notice.
(b)
(c)
(1) To meet this burden, the MA organization must supply any and all information that an IRE requires to sustain the MA organization's termination decision, consistent with paragraph (e) of this section.
(2) The enrollee may submit evidence to be considered by an IRE in making its decision.
(3) The MA organization or an IRE may require an enrollee to authorize release to the IRE of his or her medical records, to the extent that the records are necessary for the MA organization to demonstrate the correctness of its decision or for an IRE to determine the appeal.
(d)
(2) When an enrollee requests a fast-track appeal, the IRE must determine whether the provider delivered a valid notice of the termination decision, and whether a detailed notice has been provided, consistent with paragraph (e)(1) of this section.
(3) The IRE must notify CMS about each case in which it determines that improper notification occurs.
(4) Before making its decision, the IRE must solicit the enrollee's views regarding the reason(s) for termination of services as specified in the detailed written notice provided by the MA organization, or regarding any other reason that the IRE uses as the basis of its review determination.
(5) An IRE must make a decision on an appeal and notify the enrollee, the MA organization, and the provider of services, by close of business of the day after it receives the information necessary to make the decision. If the IRE does not receive the information needed to sustain an MA organization's decision to terminate services, it may make a decision on the case based on the information at hand, or it may defer its decision until it receives the necessary information. If the IRE defers its decision, coverage of the services by the MA organization would continue until the decision is made, consistent with paragraph (b) of this section, but no additional termination notice would be required.
(e)
(i) A specific and detailed explanation why services are either no longer reasonable and necessary or are no longer covered.
(ii) A description of any applicable Medicare coverage rule, instruction or other Medicare policy including citations, to the applicable Medicare policy rules, or the information about how the enrollee may obtain a copy of the Medicare policy from the MA organization.
(iii) Any applicable MA organization policy, contract provision, or rationale upon which the termination decision was based.
(iv) Facts specific to the enrollee and relevant to the coverage determination that are sufficient to advise the enrollee of the applicability of the coverage rule or policy to the enrollee's case.
(v) Any other information required by CMS.
(2) Upon an enrollee's request, the MA organization must provide the enrollee a copy of, or access to, any documentation sent to the IRE by the MA organization, including records of any information provided by telephone. The MA organization may charge the enrollee a reasonable amount to cover the costs of duplicating the information for the enrollee and/or delivering the documentation to the enrollee. The MA organization must accommodate such a request by no later than close of business of the first day after the day the material is requested.
(3) Upon notification by the IRE of a fast-track appeal, the MA organization must supply any and all information, including a copy of the notice sent to the enrollee, that the IRE needs to decide on the appeal. The MA organization must supply this information as soon as possible, but no later than by close of business of the day that the IRE notifies the MA organization that an appeal has been received from the enrollee. The MA organization must make the information available by phone (with a written record made of what is transmitted in this manner) and/or in writing, as determined by the IRE.
(4) An MA organization is financially responsible for coverage of services as provided in paragraph (b) of this section, regardless of whether it has delegated responsibility for authorizing coverage or termination decisions to its providers.
(f)
(g)
(2) The IRE must issue its reconsidered determination as expeditiously as the enrollee's health condition requires
(3) If the IRE reaffirms its decision, in whole or in part, the enrollee may appeal the IRE's reconsidered determination to an ALJ, the MAC, or a Federal court, as provided for under this subpart.
(4) If on reconsideration the IRE determines that coverage of provider services should terminate on a given date, the enrollee is liable for the costs of continued services after that date unless the IRE's decision is reversed on appeal. If the IRE's decision is reversed on appeal, the MA organization must reimburse the enrollee, consistent with the appealed decision, for the costs of any covered services for which the enrollee has already paid the MA organization or provider.
This subpart establishes the procedures for making and reviewing the following contract determinations:
(a) A determination that an entity is not qualified to enter into a contract with CMS under Part C of title XVIII of the Act.
(b) A determination to terminate a contract with an MA organization in accordance with § 422.510(a).
(c) A determination not to authorize a renewal of a contract with an MA organization in accordance with § 422.506(b).
(a) When CMS makes a contract determination, it gives the MA organization written notice.
(b) The notice specifies—
(1) The reasons for the determination; and
(2) The MA organization's right to request a hearing.
(c)
(2)
(d) When CMS determines that it will not authorize a contract renewal, CMS mails the notice to the MA organization by August 1 of the current contract year.
The contract determination is final and binding unless a timely request for a hearing is filed under 422.662.
(a)
(1) A contract applicant that has been determined to be unqualified to enter into a contract with CMS under Part C of Title XVIII of the Act in accordance with § 422.501 and § 422.502.
(2) An MA organization whose contract has been terminated under § 422.510 of this part.
(3) An MA organization whose contract has not been renewed under § 422.506 of this part.
(4) An MA organization who has had an intermediate sanction imposed in accordance with § 422.752(a) through (b) of this part.
(b)
(2) During a hearing to review a contract determination as described at § 422.641(b) of this subpart, the MA organization has the burden of proving by a preponderance of the evidence that CMS' determination was inconsistent with the requirements of § 422.506 of this part.
(3) During a hearing to review a contract determination as described at § 422.641(c) of this subpart, the MA organization has the burden of proving by a preponderance of the evidence that CMS' determination was inconsistent with the requirements of § 422.510 of this part.
(4) During a hearing to review the imposition of an intermediate sanction as described at § 422.750 of this part, the MA organization has the burden of proving by a preponderance of the evidence that CMS' determination was inconsistent with the requirements of § 422.752 of this part.
(c)
(a)
(2) The request for the hearing must be filed in accordance with the requirements specified in the notice.
(b)
(c)
(1) The parties described in § 422.660;
(2) At the discretion of the hearing officer, any interested parties who make a showing that their rights may be prejudiced by the decision to be rendered at the hearing; and
(3) CMS.
(a)
(b)
(2) A contract terminated in accordance with § 422.510(b)(2)(i) of this part will be terminated on the date specified by CMS and will not be postponed if a hearing is requested.
CMS designates a hearing officer to conduct the hearing. The hearing officer need not be an ALJ.
(a) A hearing officer may not conduct a hearing in a case in which he or she is prejudiced or partial to any party or has any interest in the matter pending for decision.
(b) A party to the hearing who objects to the designated hearing officer must notify that officer in writing at the earliest opportunity.
(c) The hearing officer must consider the objections, and may, at his or her discretion, either proceed with the hearing or withdraw.
(1) If the hearing officer withdraws, CMS designates another hearing officer to conduct the hearing.
(2) If the hearing officer does not withdraw, the objecting party may,
(a) The hearing officer—
(1) Fixes a time and place for the hearing, which is not to exceed 30 calendar days after the receipt of the request for the hearing; and
(2) Sends written notice to the parties that informs the parties of the general and specific issues to be resolved, the burden of proof, and information about the hearing procedure.
(b)(1) The hearing officer may, on his or her own motion, change the time and place of the hearing.
(2) The hearing officer may adjourn or postpone the hearing.
(c)(1) The MA organization or CMS may request an extension by filing a written request no later than 10 calendar days prior to the scheduled hearing.
(2) When either the MA organization or CMS requests an extension, the hearing officer will provide a one-time 15 calendar day extension.
(3) Additional extensions may be granted at the discretion of the hearing officer.
A party may appoint as its representative at the hearing anyone not disqualified or suspended from acting as a representative before the Secretary or otherwise prohibited by law.
(a) A representative appointed and qualified in accordance with § 422.672 may, on behalf of the represented party—
(1) Gives or accepts any notice or request pertinent to the proceedings set forth in this subpart;
(2) Presents evidence and allegations as to facts and law in any proceedings affecting that party; and
(3) Obtains information to the same extent as the party.
(b) A notice or request sent to the representative has the same force and effect as if it had been sent to the party.
(a) The hearing is open to the parties and to the public.
(b) The hearing officer inquires fully into all the matters at issue and receives in evidence the testimony of witnesses and any documents that are relevant and material.
(c) The hearing officer provides the parties an opportunity to enter any objection to the inclusion of any document.
(d) The MA organization bears the burden of going forward and must first present evidence and argument before CMS presents its evidence and argument.
The hearing officer rules on the admissibility of evidence and may admit evidence that would be inadmissible under rules applicable to court procedures.
(a) The hearing officer may examine the witnesses.
(b) The parties or their representatives are permitted to examine their witnesses and cross-examine witnesses of other parties.
Witness lists and documents must be identified and exchanged at least 5 calendar days before the scheduled hearing.
(a)
(b)
(a) A complete record of the proceedings at the hearing is made and transcribed and made available to all parties upon request.
(b) The record may not be closed until a hearing decision has been issued.
In exercising his or her authority, the hearing officer must comply with the provisions of title XVIII and related provisions of the Act, the regulations issued by the Secretary, and general instructions issued by CMS in implementing the Act.
(a) As soon as practical after the close of the hearing, the hearing officer issues a written decision that—
(1) Is based upon the evidence of record; and
(2) Contains separately numbered findings of fact and conclusions of law.
(b) The hearing officer provides a copy of the hearing decision to each party.
(c) The hearing decision is final and binding unless it is reversed or modified by the Administrator following review under § 422.692, or reopened and revised in accordance with § 422.696.
(a)
(b)
(c)
(d)
(e)
A decision by the Administrator under section 422.692 is final and binding unless it is reopened and revised in accordance with § 422.696.
(a)
(b)
(c)
(d)
(2) The notice of revision specifies the reasons for revisions.
(a) The following intermediate sanctions may be imposed and will continue in effect until CMS is satisfied that the deficiencies that are the basis for the sanction determination have been corrected and are not likely to recur:
(1) Suspension of the MA organization's enrollment of Medicare beneficiaries.
(2) Suspension of payment to the MA organization for Medicare beneficiaries enrolled after the date CMS notifies the organization of the intermediate sanction.
(3) Suspension of all marketing activities to Medicare beneficiaries by an MA organization.
(b) CMS may impose civil money penalties as specified in 422.760.
(a)
(1) Fails substantially to provide medically necessary items and services that are required (under law or under the contract) to be provided to an individual covered under the contract, if the failure has adversely affected (or has the substantial likelihood of adversely affecting) the individual.
(2) Imposes on MA enrollees premiums in excess of the monthly basic and supplemental beneficiary premiums permitted under section 1854 of the Act and subpart F of this part.
(3) Acts to expel or refuses to re-enroll a beneficiary in violation of the provisions of this part.
(4) Engages in any practice that would reasonably be expected to have the effect of denying or discouraging enrollment (except as permitted by this part) by eligible individuals with the organization whose medical condition or history indicates a need for substantial future medical services.
(5) Misrepresents or falsifies information that it furnishes—
(i) To CMS; or
(ii) To an individual or to any other entity.
(6) Fails to comply with the requirements of § 422.206, which prohibits interference with practitioners' advice to enrollees.
(7) Fails to comply with § 422.216, which requires the organization to enforce the limit on balance billing under a private fee-for service plan.
(8) Employs or contracts with an individual or entity who is excluded from participation in Medicare under section 1128 or 1128A of the Act (or with an entity that employs or contracts with such an excluded individual or entity) for the provision of any of the following:
(i) Health care.
(ii) Utilization review.
(iii) Medical social work.
(iv) Administrative services.
(b)
(c)
(2)
(i) Violations listed at 422.752(a).
(ii) Determinations made pursuant to 422.510(a)(4).
(a)
(i) Sends a written notice to the MA organization stating the nature and basis of the proposed intermediate sanction and the MA organization's right to a hearing as specified in paragraph (b) of this section; and
(ii) Sends the OIG a copy of the notice.
(2)
(b)
(2) A written request must be received by the designated CMS office within 15 calendar days after the receipt of the notice.
(3) A request for a hearing under § 422.660 does not delay the date specified by CMS when the sanction becomes effective.
(4) The MA organization must follow the right to a hearing procedure as specified at § 422.660 through § 422.684.
(c)
(2)
(3)
(i) CMS may require that the MA organization hire an independent auditor to provide CMS with additional information to determine if the deficiencies that are the basis for the sanction determination have been corrected and are not likely to recur. The independent auditor must work in accordance with CMS specifications and must be willing to attest that a complete and full independent review has been performed.
(ii) In instances where marketing or enrollment or both intermediate sanctions have been imposed, CMS may require an MA organization to market or to accept enrollments or both for a limited period of time in order to assist CMS in making a determination as to whether the deficiencies that are the bases for the intermediate sanctions have been corrected and are not likely to recur.
(A) If, following this time period, CMS determines the deficiencies have not been corrected or are likely to recur, the intermediate sanctions will remain in effect until such time that CMS is assured the deficiencies have been corrected and are not likely to recur.
(B) The MA organization does not have a right to a hearing under § 422.660(a)(4) of this part to challenge CMS' determination to keep the intermediate sanctions in effect.
(d)
(e) Notice to impose
(2)
(i) A description of the basis for the determination.
(ii) The basis for the penalty.
(iii) The amount of the penalty.
(iv) The date the penalty is due.
(v) The MA organization's right to a hearing under subpart T of this part.
(vi) Information about where to file the request for hearing.
(a) When an MA organization does not request a hearing, CMS initiates collection of the civil money penalty following the expiration of the timeframe for requesting an ALJ hearing as specified in subpart T of this part.
(b) If an MA organization requests a hearing and CMS' decision to impose a civil money penalty is upheld, CMS may initiate collection of the civil money penalty once the administrative decision is final.
(a)
(1) The nature of the conduct;
(2) The degree of culpability of the MA organization;
(3) The harm which resulted or could have resulted from the conduct of MA organization;
(4) The financial condition of the MA organization;
(5) The history of prior offenses by the MA organization or principals of the MA organization; and,
(6) Such other matters as justice may require.
(b)
(1) If the deficiency on which the determination is based has directly adversely affected (or has the substantial likelihood of adversely affecting) one or more MA enrollees—up to $25,000 for each determination.
(2) If the deficiency on which the determination is based has directly adversely affected (or has the substantial likelihood of adversely affecting) one or more MA enrollees, CMS may calculate a CMP of up to $25,000 for each MA enrollee directly adversely affected (or with the substantial likelihood of being adversely affected) by a deficiency.
(3) For each week that a deficiency remains uncorrected after the week in which the MA organization receives CMS' notice of the determination—up to $10,000.
(4) If CMS makes a determination that a MA organization has terminated its contract other than in a manner described under 422.512 and that the MA organization has therefore failed to substantially carry out the terms of the contract—$250 per Medicare enrollee from the terminated MA plan or plans at the time the MA organization terminated its contract, or $100,000, whichever is greater.
For civil money penalties imposed by CMS, CMS may settle civil money penalty cases at any time before a final decision is rendered.
The provisions of section 1128A of the Act (except subsections (a) and (b)) apply to civil money penalties under this subpart to the same extent that they apply to a civil money penalty or procedure under section 1128A of the Act.
(a)
(2) Section 1857(g) of the Act provides that, for MA organizations out of compliance with the requirements in part 422 specified remedies may be imposed instead of, or in addition to, termination of the MA organization's contract. Section 1857(g)(4) of the Act makes certain provisions of section 1128A of the Act applicable to civil money penalties imposed on MA organizations.
(b) [Reserved]
As used in this subpart—
(a)
(b)
(a)
(2) MA organizations may request judicial review of the Departmental Appeals Board's decision that imposes a CMP.
(b) [Reserved]
(a) An affected party may appoint as its representative anyone not disqualified or suspended from acting as a representative in proceedings before the Secretary or otherwise prohibited by law.
(b) If the representative appointed is not an attorney, the party must file written notice of the appointment with the ALJ or the Departmental Appeals Board.
(c) If the representative appointed is an attorney, the attorney's statement that he or she has the authority to represent the party is sufficient.
(a) A representative appointed and qualified in accordance with 422.1008 may, on behalf of the represented party—
(1) Give and accept any notice or request pertinent to the proceedings set forth in this part;
(2) Present evidence and allegations as to facts and law in any proceedings affecting that party to the same extent as the party; and
(3) Obtain information to the same extent as the party.
(b) A notice or request may be sent to the affected party, to the party's representative, or to both. A notice or request sent to the representative has the same force and effect as if it had been sent to the party.
Fees for any services performed on behalf of an affected party by an attorney appointed and qualified in accordance with 422.1008 are not subject to the provisions of section 206 of Title II of the Act, which authorizes the Secretary to specify or limit those fees.
A party that requests a transcript of prehearing or hearing proceedings or Board review must pay the actual or estimated cost of preparing the transcript unless, for good cause shown by that party, the payment is waived by the ALJ or the Departmental Appeals Board, as appropriate.
(a)
(b)
(2) The ALJ or the Board will grant an opportunity to reply to the rebuttal statement only if the party shows good cause.
(a)
(b)
(1) The affected party requests a hearing; or
(2) CMS revises its decision.
(a)
(2) The MA organization or its legal representative or other authorized official must file the request, in writing, to the appropriate Departmental Appeals Board office, with a copy to CMS, within 60 calendar days from receipt of the notice of initial determination, to request a hearing before an ALJ to appeal any determination by CMS to impose a civil money penalty.
(b)
(1) Identify the specific issues, and the findings of fact and conclusions of law with which the affected party disagrees; and
(2) Specify the basis for each contention that the finding or conclusion of law is incorrect.
The parties to the hearing are the affected party and CMS, as appropriate.
(a) The Chair of the Departmental Appeals Board, or his or her delegate designates an ALJ or a member or members of the Departmental Appeals Board to conduct the hearing.
(b) If appropriate, the Chair or the delegate may substitute another ALJ or another member or other members of the Departmental Appeals Board to conduct the hearing.
(c) As used in this part, “ALJ” includes a member or members of the Departmental Appeals Board who are designated to conduct a hearing.
(a) An ALJ may not conduct a hearing in a case in which he or she is prejudiced or partial to the affected party or has any interest in the matter pending for decision.
(b) A party that objects to the ALJ designated to conduct the hearing must give notice of its objections at the earliest opportunity.
(c) The ALJ will consider the objections and decide whether to withdraw or proceed with the hearing.
(1) If the ALJ withdraws, another ALJ will be designated to conduct the hearing.
(2) If the ALJ does not withdraw, the objecting party may, after the hearing, present its objections to the Departmental Appeals Board as reasons for changing, modifying, or reversing the ALJ's decision or providing a new hearing before another ALJ.
(a) At any time before the hearing, the ALJ may call a prehearing conference for the purpose of delineating the issues in controversy, identifying the evidence and witnesses to be presented at the hearing, and obtaining stipulations accordingly.
(b) On the request of either party or on his or her own motion, the ALJ may adjourn the prehearing conference and reconvene at a later date.
(a)
(b)
(c)
(1) Either party gives timely notice to that effect to the ALJ and the other party; or
(2) The ALJ raises the issues in the notice of prehearing conference or at the conference.
(a) The prehearing conference is open to the affected party or its representative, to the CMS representatives and their technical advisors, and to any other persons whose presence the ALJ considers necessary or proper.
(b) The ALJ may accept the agreement of the parties as to the following:
(1) Facts that are not in controversy.
(2) Questions that have been resolved favorably to the affected party after the determination in dispute.
(3) Remaining issues to be resolved.
(c) The ALJ may request the parties to indicate the following:
(1) The witnesses that will be present to testify at the hearing.
(2) The qualifications of those witnesses.
(3) The nature of other evidence to be submitted.
(a)
(2) The record may be transcribed at the request of either party or the ALJ.
(b)
(2) Copies of the order are sent to all parties and the parties have 10 calendar days to file objections to the order.
(3) After the 10 calendar days have elapsed, the ALJ settles the order.
(c)
(a) The ALJ fixes a time and place for the hearing and gives the parties written notice at least 10 calendar days before the scheduled date.
(b) The notice informs the parties of the general and specific issues to be resolved at the hearing.
(a) The ALJ may change the time and place for the hearing either on his or her own initiative or at the request of a party for good cause shown, or may adjourn or postpone the hearing.
(b) The ALJ may reopen the hearing for receipt of new evidence at any time before mailing the notice of hearing decision.
(c) The ALJ gives the parties reasonable notice of any change in time or place or any adjournment or reopening of the hearing.
When two or more affected parties have requested hearings and the same or substantially similar matters are at issue, the ALJ may, if all parties agree, fix a single time and place for the prehearing conference or hearing and conduct all proceedings jointly. If joint hearings are held, a single record of the proceedings is made and a separate decision issued with respect to each affected party.
(a)
(2) The ALJ may consider new issues even if CMS has not made initial determinations on them, and even if they arose after the request for hearing was filed or after a prehearing conference.
(3) The ALJ may give notice of hearing on new issues at any time after the hearing request is filed and before the hearing record is closed.
(b)
(2) After giving notice, the ALJ will, except as provided in paragraph (c) of this section, proceed to hearing on new issues in the same manner as on an issue raised in the request for hearing.
(c)
(a)
(b)
(c)
(1) Identify the witnesses or documents to be produced;
(2) Describe their addresses or location with sufficient particularity to permit them to be found; and
(3) Specify the pertinent facts the party expects to establish by the witnesses or documents, and indicate why those facts could not be established without use of a subpoena.
(d)
(a)
(b)
(2) If the ALJ believes that there is relevant and material evidence available which has not been presented at the hearing, he may, at any time before mailing of notice of the decision, reopen the hearing to receive that evidence.
(3) The ALJ decides the order in which the evidence and the arguments of the parties are presented and the conduct of the hearing.
(4) CMS has the burden of coming forward with evidence related to disputed findings that is sufficient (together with any undisputed findings and legal authority) to establish a prima facie case that CMS has a legally sufficient basis for its determination.
(5) The affected party has the burden of coming forward with evidence sufficient to establish the elements of any affirmative argument or defense which it offers.
(6) The affected party bears the ultimate burden of persuasion. To prevail, the affected party must prove by a preponderance of the evidence on the record as a whole that there is no basis for the determination.
(c)
(1) Set a penalty of zero or reduce a penalty to zero, or
(2) Review the exercise of discretion by CMS to impose a civil money penalty.
Evidence may be received at the hearing even though inadmissible under the rules of evidence applicable to court procedure. The ALJ rules on the admissibility of evidence.
Witnesses at the hearing testify under oath or affirmation. The representative of each party is permitted to examine his or her own witnesses subject to interrogation by the representative of the other party. The ALJ may ask any questions that he or she deems necessary. The ALJ rules upon any objection made by either party as to the propriety of any question.
The parties to a hearing are allowed a reasonable time to present oral summation and to file briefs or other written statements of proposed findings of fact and conclusions of law. Copies of any briefs or other written statements must be sent in accordance with 422.1016.
A complete record of the proceedings at the hearing is made and transcribed in all cases.
(a)
(2) If the affected party wishes to withdraw a waiver, it may do so, for good cause, at any time before the ALJ mails notice of the hearing decision.
(b)
(1) The ALJ believes that the testimony of the affected party or its representatives or other witnesses is necessary to clarify the facts at issue.
(2) CMS shows good cause for requiring the presentation of oral evidence.
(c)
(d)
(1) Make a record of the relevant written evidence that was considered in making the determination being appealed, and of any additional evidence submitted by the parties;
(2) Furnish to each party copies of the additional evidence submitted by the other party; and
(3) Give both parties a reasonable opportunity for rebuttal.
(e) Handling of briefs and related statements. If the parties submit briefs
(a) The ALJ may, at any time before mailing the notice of the decision, dismiss a hearing request if a party withdraws its request for a hearing or the affected party asks that its request be dismissed.
(b) An affected party may request a dismissal by filing a written notice with the ALJ.
(a) The ALJ may dismiss a request for hearing if it is abandoned by the party that requested it.
(b) The ALJ may consider a request for hearing to be abandoned if the party or its representative—
(1) Fails to appear at the prehearing conference or hearing without having previously shown good cause for not appearing; and
(2) Fails to respond, within 10 calendar days after the ALJ sends a “show cause” notice, with a showing of good cause.
On his or her own motion, or on the motion of a party to the hearing, the ALJ may dismiss a hearing request either entirely or as to any stated issue, under any of the following circumstances:
(a)
(b)
(c)
(a) Notice of the ALJ's dismissal action is mailed to the parties. The notice advises the affected party of its right to request that the dismissal be vacated as provided in 422.1066.
(b) The dismissal of a request for hearing is binding unless it is vacated by the ALJ or the Departmental Appeals Board.
An ALJ may vacate any dismissal of a request for hearing if a party files a request to that effect within 60 calendar days from receipt of the notice of dismissal and shows good cause for vacating the dismissal.
(a)
(b)
(1) A party requests review by the Departmental Appeals Board within the time period specified in 422.846, and the Board reviews the case;
(2) The Departmental Appeals Board denies the request for review and the party seeks judicial review by filing an action in a United States District Court or, in the case of a civil money penalty, in a United States Court of Appeals;
(3) The decision is revised by an ALJ or the Departmental Appeals Board; or
(4) The decision is a recommended decision directed to the Board.
(a) At any time before the ALJ receives oral testimony, the Board may remove to itself any pending request for a hearing.
(b) Notice of removal is mailed to each party.
(c) The Board conducts the hearing in accordance with the rules that apply to ALJ hearings under this subpart.
(a) If CMS requests remand, and the affected party concurs in writing or on the record, the ALJ may remand any case properly before him or her to CMS for a determination satisfactory to the affected party.
(b) The ALJ may remand at any time before notice of hearing decision is mailed.
Either of the parties has a right to request Departmental Appeals Board review of the ALJ's decision or dismissal order, and the parties are so informed in the notice of the ALJ's action.
(a)
(2) The requesting party or its representative or other authorized official must file the request with the DAB within 60 calendar days from receipt of the notice of decision or dismissal, unless the Board, for good cause shown by the requesting party, extends the time for filing.
(b)
(a)
(b)
(1) The affected party requests dismissal of its request for review.
(2) The affected party did not file timely or show good cause for late filing.
(3) The affected party does not have a right to review.
(4) A previous determination or decision, based on the same facts and law, and regarding the same issue, has become final through judicial affirmance or because the affected party failed to timely request reconsideration, hearing, Board review, or judicial review, as appropriate.
(c)
(d)
The parties are given, upon request, a reasonable opportunity to file briefs or other written statements as to fact and law, and to appear before the Departmental Appeals Board to present evidence or oral arguments. Copies of any brief or other written statement must be sent in accordance with 422.1016.
(a) The Departmental Appeals Board may admit evidence into the record in addition to the evidence introduced at the ALJ hearing, (or the documents considered by the ALJ if the hearing was waived), if the Board considers that the additional evidence is relevant and material to an issue before it.
(b) If it appears to the Board that additional relevant evidence is available, the Board will require that it be produced.
(c) Before additional evidence is admitted into the record—
(1) Notice is mailed to the parties (unless they have waived notice) stating that evidence will be received regarding specified issues; and
(2) The parties are given a reasonable time to comment and to present other evidence pertinent to the specified issues.
(d) If additional evidence is presented orally to the Board, a transcript is prepared and made available to any party upon request.
(a) When the Departmental Appeals Board reviews an ALJ's decision or order of dismissal, or receives a case remanded by a court, the Board may either issue a decision or remand the case to an ALJ for a hearing and decision or a recommended decision for final decision by the Board.
(b) In a remanded case, the ALJ initiates additional proceedings and takes other actions as directed by the Board in its order of remand, and may take other action not inconsistent with that order.
(c) Upon completion of all action called for by the remand order and any other consistent action, the ALJ promptly makes a decision or, as specified by the Board, certifies the case to the Board with a recommended decision.
(d) The parties have 20 calendar days from the date of a notice of a recommended decision to submit to the Board any exception, objection, or comment on the findings of fact, conclusions of law, and recommended decision.
(e) After the 20-calendar day period, the Board issues its decision adopting, modifying or rejecting the ALJ's recommended decision.
(f) If the Board does not remand the case to an ALJ, the following rules apply:
(1) The Board's decision—
(i) Is based upon the evidence in the hearing record and any further evidence that the Board receives during its review;
(ii) Is in writing and contains separate numbered findings of fact and conclusions of law; and
(iii) May modify, affirm, or reverse the ALJ's decision.
(2) A copy of the Board's decision is mailed to each party.
(a)
(1) The affected party has a right to judicial review and timely files a civil action in a United States District Court or, in the case of a civil money penalty, in a United States Court of Appeals; or
(2) The Board reopens and revises its decision in accordance with 422.862.
(b)
(c)
(a) Any affected party that is dissatisfied with a Departmental Appeals Board decision and is entitled to judicial review must commence civil action within 60 calendar days from receipt of the notice of the Board's decision, unless the Board extends the time in accordance with paragraph (c) of this section.
(b) The request for extension must be filed in writing with the Board before the 60-calendar day period ends.
(c) For good cause shown, the Board may extend the time for commencing civil action.
(a)
(b)
(2) A decision of an ALJ may be reopened by that ALJ, by another ALJ if that one is not available, or by the Departmental Appeals Board. For purposes of this paragraph, an ALJ is considered to be unavailable if the ALJ has died, terminated employment, or been transferred to another duty station, is on leave of absence, or is unable to conduct a hearing because of illness.
(a)
(1) Notifies the parties of the proposed revision; and
(2) Unless the parties waive their right to hearing or appearance—
(i) Grants a hearing in the case of an ALJ revision; and
(ii) Grants opportunity to appear in the case of a Board revision.
(b)
(1) If a revised decision is necessary, the ALJ or the Departmental Appeals Board, as appropriate, renders it on the basis of the entire record.
(2) If the decision is revised by an ALJ, the Departmental Appeals Board may review that revised decision at the request of either party or on its own motion.
(a)
(b)
(2)
As used in this subpart—
(1) Promote the MA organization, or any MA plan offered by the MA organization.
(2) Inform Medicare beneficiaries that they may enroll, or remain enrolled in, an MA plan offered by the MA organization.
(3) Explain the benefits of enrollment in an MA plan, or rules that apply to enrollees.
(4) Explain how Medicare services are covered under an MA plan, including conditions that apply to such coverage.
(5) May include, but are not limited to, the following:
(i) General audience materials such as general circulation brochures, newspapers, magazines, television, radio, billboards, yellow pages, or the Internet.
(ii) Marketing representative materials such as scripts or outlines for telemarketing or other presentations.
(iii) Presentation materials such as slides and charts.
(iv) Promotional materials such as brochures or leaflets, including materials for circulation by third parties (for example, physicians or other providers).
(v) Membership communication materials such as membership rules, subscriber agreements, member handbooks and wallet card instructions to enrollees.
(vi) Letters to members about contractual changes; changes in providers, premiums, benefits, plan procedures etc.
(vii)
(6)
(i) Are targeted to current enrollees;
(ii) Are customized or limited to a subset of enrollees or apply to a specific situation;
(iii) Do not include information about the plan's benefit structure; and
(iv) Apply to a specific situation or cover claims processing or other operational issues.
(a)
(i) At least 45 days (or 10 days if using certain types of marketing materials that use, without modification, proposed model language and format, including standardized language and formatting, as specified by CMS) before the date of distribution the MA organization has submitted the material or form to CMS for review under the guidelines in § 422.2264 of this subpart; and
(ii) CMS does not disapprove the distribution of new material or form.
(2) [Reserved]
(b)
(c)
(d)
In reviewing marketing material or election forms under § 422.2262 of this part, CMS determines that the marketing materials—
(a) Provide, in a format (and, where appropriate, print size), and using standard terminology that may be specified by CMS, the following information to Medicare beneficiaries interested in enrolling:
(1) Adequate written description of rules (including any limitations on the providers from whom services can be obtained), procedures, basic benefits and services, and fees and other charges;
(2) Adequate written description of any supplemental benefits and services;
(3) Adequate written explanation of the grievance and appeals process, including differences between the two, and when it is appropriate to use each; and
(4) Any other information necessary to enable beneficiaries to make an informed decision about enrollment.
(b) Notify the general public of its enrollment period in an appropriate manner, through appropriate media, throughout its service area and if applicable, continuation areas.
(c) Include in written materials notice that the MA organization is authorized by law to refuse to renew its contract with CMS, that CMS also may refuse to renew the contract, and that termination or non-renewal may result in termination of the beneficiary's enrollment in the plan.
(d) Ensure that materials are not materially inaccurate or misleading or otherwise make material misrepresentations.
(e) For markets with a significant non-English speaking population, provide materials in the language of these
If CMS has not disapproved the distribution of marketing materials or forms submitted by an MA organization with respect to an MA plan in an area, CMS is deemed not to have disapproved the distribution in all other areas covered by the MA plan and organization except with regard to any portion of the material or form that is specific to the particular area.
In conducting marketing activities, MA organizations may not—
(a) Provide cash or other monetary rebates as an inducement for enrollment or otherwise.
(b) Offer gifts to potential enrollees, unless the gifts are of nominal (as defined in the CMS Marketing Guidelines) value, are offered to all potential enrollees without regard to whether or not the beneficiary enrolls, and are not in the form of cash or other monetary rebates.
(c) Engage in any discriminatory activity such as, for example, attempts to recruit Medicare beneficiaries from higher income areas without making comparable efforts to enroll Medicare beneficiaries from lower income areas.
(d) Solicit door-to-door for Medicare beneficiaries or through other unsolicited means of direct contact, including calling a beneficiary without the beneficiary initiating the contact.
(e) Engage in activities that could mislead or confuse Medicare beneficiaries, or misrepresent the MA organization. The MA organization may not claim it is recommended or endorsed by CMS or Medicare or that CMS or Medicare recommends that the beneficiary enroll in the MA plan. It may, however, explain that the organization is approved for participation in Medicare.
(f) Market non-health care related products to prospective enrollees during any MA or Part D sales activity or presentation. This is considered cross-selling and is prohibited.
(g) Market any health care related product during a marketing appointment beyond the scope agreed upon by the beneficiary, and documented by the plan, prior to the appointment.
(h) Market additional health related lines of plan business not identified prior to an in-home appointment without a separate appointment that may not be scheduled until 48 hours after the initial appointment.
(i) Distribute marketing materials for which, before expiration of the 45-day period, the MA organization receives from CMS written notice of disapproval because it is inaccurate or misleading, or misrepresents the MA organization, its marketing representatives, or CMS.
(j) Use providers or provider groups to distribute printed information comparing the benefits of different health plans unless the providers, provider groups, or pharmacies accept and display materials from all health plans with which the providers, provider groups, or pharmacies contract. The use of publicly available comparison information is permitted if approved by CMS in accordance with the Medicare marketing guidance.
(k) Conduct sales presentations or distribute and accept MA plan enrollment forms in provider offices or other areas where health care is delivered to individuals, except in the case where such activities are conducted in common areas in health care settings.
(l) Conduct sales presentations or distribute and accept plan applications at educational events.
(m) Employ MA plan names that suggest that a plan is not available to all Medicare beneficiaries. This prohibition shall not apply to MA plan names in effect on July 31, 2000.
(n) Display the names and/or logos of co-branded network providers on the organization's member identification card, unless the provider names, and/or logos are related to the member selection of specific provider organizations (for example, physicians, hospitals). Other marketing materials (as defined
(o) Engage in any other marketing activity prohibited by CMS in its marketing guidance.
(p) Provide meals for potential enrollees, which is prohibited, regardless of value.
(q) Use a plan name that does not include the plan type. The plan type should be included at the end of the plan name.
At 76 FR 54634, Sept. 1, 2011, § 422.2268 was amended by revising paragraphs (g) and (h), effective October 31, 2011. For the convenience of the user, the revised text is set forth as follows:
(g) Market any health care related product during a marketing appointment beyond the scope agreed upon by the beneficiary, and documented by the plan, prior to the appointment (48 hours in advance, when practicable).
(h) Market additional health related lines of plan business not identified prior to an individual appointment without a separate scope of appointment identifying the additional lines of business to be discussed.
In its marketing, the MA organization must:
(a) Demonstrate to CMS' satisfaction that marketing resources are allocated to marketing to the disabled Medicare population as well as beneficiaries age 65 and over.
(b) Establish and maintain a system for confirming that enrolled beneficiaries have, in fact, enrolled in the MA plan, and understand the rules applicable under the plan.
(c) Employ as marketing representatives only individuals who are licensed by the State to conduct marketing activities (as defined in the Medicare Marketing Guidelines) in that State, and whom the organization has informed that State it has appointed, consistent with the appointment process provided for under State law.
(d) Report to the State in which the MAO appoints an agent or broker, the termination of any such agent or broker, including the reasons for such termination if State law requires that the reasons for the termination be reported.
(e) Terminate upon discovery any unlicensed agent or broker employed as a marketing representative and notify any beneficiaries enrolled by an unqualified agent or broker of the agent's or broker's status and, if requested, of their options to confirm enrollment or make a plan change (including a special election period, as described in § 422.62(b)(3)(ii)).
For purposes of this section “compensation” includes pecuniary or nonpecuniary remuneration of any kind relating to the sale or renewal of a policy including, but not limited to, commissions, bonuses, gifts, prizes, awards, and finder's fees. “Compensation” does not include the payment of fees to comply with State appointment laws, training, certification, and testing costs; reimbursement for mileage to, and from, appointments with beneficiaries; or reimbursement for actual costs associated with beneficiary sales appointments such as venue rent, snacks, and materials. If a MA organization markets through independent (that is, non-employee) brokers or agents, the requirements in paragraph (a) of this section must be met. The requirements in paragraphs (b) through (e) of this section must be met if a MA organization markets through any broker or agent, whether independent (that is, non-employee) or employed.
(a) Agents and brokers must be compensated as follows:
(1) An MA organization (or other entity on its behalf) may provide compensation to a broker or agent for the sale of an MA product if the following requirements are met:
(i) The compensation amount paid to the broker or agent for an initial enrollment of a Medicare beneficiary into an MA plan in 2009 is one of the following:
(A) The compensation paid by the MA organization in the geographic area for initial enrollment for the plan type in question in 2006, adjusted by the average change in MA rates as published by CMS in the MA rate announcement; or
(B) A compensation amount commensurate with the market rate for initial enrollments paid by (or on behalf of) MA organizations offering plans in the geographic area for the plan type in question during 2006 and 2007, adjusted by the average change in MA rates as published by CMS in the MA rate announcement.
(ii) For 2010 and subsequent years, the compensation amount paid to an agent or broker for enrollment of a Medicare beneficiary into an MA plan is:
(A) For an initial enrollment, the prior year's initial compensation adjusted by the change in MA rates that CMS announces each year.
(B) For renewals, an amount equal to 50 percent of the initial compensation in (A) above.
(iii) The broker or agent is paid a renewal compensation for each of the next 5 years the enrollee remains in the plan in an amount equal to 50 percent of the initial year compensation amount (creating a 6-year compensation cycle). For purposes of paragraph (a)(1)(i), individuals enrolling in an MA plan in 2009 are initially deemed to be in the first renewal year (the second year) in the 6-year cycle. With respect to an individual identified by the MA organization as in an Initial Coverage Election Period (ICEP) or subsequently identified by CMS as in an ICEP or new to the MA program, the individual is considered to be in the initial year of the 6-year cycle. The MA organization must adjust the compensation paid for these new enrollees from renewal compensation to the amount that would have been paid for an initial enrollment under the 6-year compensation structure initiated in the year the enrollment occurred.
(iv) If the MA organization contracts with a third party entity such as a Field Marketing Organization or similar type entity to sell its insurance products, or perform services (for example, training, customer service, or agent recruitment), the amount paid to the third party must be fair-market value and must not exceed an amount that is commensurate with the amounts paid by the MA organization to a third party for similar services during each of the previous 2 years.
(2) [Reserved]
(3) No entity shall provide aggregate compensation to its agents or brokers and no agent or broker shall receive aggregate compensation greater than the renewal compensation payable by the replacing plan on renewal policies if an existing policy is replaced with a like plan type during the first year and 5 renewal years (6-year compensation cycle).
(i) For purposes of this section, “like plan type” means PDP replaced with another PDP, MA or MA-PD replaced with another MA or MA-PD, or cost plan replaced with another cost plan.
(ii) Replacements between different plan types (for which a new compensation is paid) include—PDP and MA-PD, PDP and cost plans, or MA-PD and cost plans.
(4) Compensation shall be earned for months 4 through 12 of the enrollment year.
(i) Plans may pay agents and brokers up-front or prorate compensation payments over 12 months or over months 4 through 12, but
(ii) When a beneficiary disenrolls from the plan, the plan must recover all compensation paid: for months in which the beneficiary is not enrolled; and during months 1 through 3 if the beneficiary disenrolls during the first three months.
(5) Organizations and sponsors must establish a compensation structure for new and replacement enrollments and renewals effective in a given plan year. Compensation structures must be in place by the beginning of the plan marketing period, October 1.
(6) Compensation structures must be available upon CMS request including for audits, investigations, and to resolve complaints.
(b) It must ensure that all agents selling Medicare products are trained annually through a CMS endorsed or approved training program or as specified by CMS, on Medicare rules and regulations specific to the plan products they intend to sell.
(c) It must ensure agents selling Medicare products are tested annually by CMS endorsed or approved training program or as specified by CMS.
(d) Upon CMS' request, the organization must provide to CMS, in a form consistent with current CMS guidance, the information necessary for it to conduct oversight of marketing activities.
(e) It must comply with State requests for information about the performance of a licensed agent or broker as part of a state investigation into the individual's conduct. CMS will establish and maintain a memorandum of understanding (MOU) to share compliance and oversight information with States that agree to the MOU.
At 76 FR 54634, Sept. 1, 2011, § 422.2274 was amended by revising paragraphs (a)(1)(ii) introductory text, (a)(1)(ii)(B), (a)(1)(iv) and (a)(4), effective October 31, 2011. For the convenience of the user, the revised text is set forth as follows:
(a) * * *
(1) * * *
(ii) The compensation amount paid to an agent or broker for enrollment of a Medicare beneficiary into an M A plan is as follows:
(B) For renewals, an amount equal to 50 percent of the initial compensation in paragraph (a)(1)(ii)(A) of this section.
(iv) If the MA organization contracts with a third party entity such as a Field Marketing Organization or similar type entity to sell its insurance products, or perform services (for example, training, customer service, or agent recruitment)—
(A) The total amount paid by the MA organization to the third party and its agents for enrollment of a beneficiary into a plan, if any, must be made in accordance with paragraph (a)(1) of this section; and
(B) The amount paid to the third party for services other than selling insurance products, if any, must be fair-market value and must not exceed an amount that is commensurate with the amounts paid by the MA organization to a third party for similar services during each of the previous 2 years.
(4) Compensation may only be paid for the beneficiary's months of enrollment during a plan year (that is, January through December).
(i) Subject to paragraph (a)(4)(ii) of this section, compensation payments may be made up front for the entire current plan year or in installments throughout the year.
(ii) When a beneficiary disenrolls from a plan during the—
(A) First 3 months of enrollment, the plan must recover all compensation paid to agents and brokers.
(B) Fourth through 12th month of their enrollment (within a single plan year), the plan must recover compensation paid to agents and brokers for those months of the plan year for which the beneficiary is not enrolled.
MA organizations may develop marketing materials designed for members of an employer group who are eligible for employer-sponsored benefits through the MA organization, and furnish these materials only to the group members. These materials are not subject to CMS prior review and approval.
Sections 1102, 1106, 1860D-1 through 1860D-42, and 1871 of the Social Security Act (42 U.S.C. 1302, 1306, 1395w-101 through 1395w-152, and 1395hh).
(a)
1106. Disclosure of Information in Possession of Agency.
1860D-1. Eligibility, enrollment, and information.
1860D-2. Prescription drug benefits.
1860D-3. Access to a choice of qualified prescription drug coverage.
1860D-4. Beneficiary protections for qualified prescription drug coverage.
1860D-11. PDP regions; submission of bids; plan approval.
1860D-12. Requirements for and contracts with prescription drug plan (PDP) sponsors.
1860D-13. Premiums; late enrollment penalty.
1860D-14. Premium and cost-sharing subsidies for low-income individuals.
1860D-15. Subsidies for Part D eligible individuals for qualified prescription drug coverage.
1860D-16. Medicare Prescription Drug Account in the Federal Supplementary Medical Insurance Trust Fund.
1860D-21. Application to Medicare Advantage program and related managed care programs.
1860D-22. Special rules for Employer-Sponsored Programs
1860D-23. State pharmaceutical assistance programs.
1860D-24. Coordination requirements for plans providing prescription drug coverage.
1860D-31. Medicare prescription drug discount card and transitional assistance program.
1860D-41. Definitions; treatment of references to provisions in Part C.
1860D-42. Miscellaneous provisions.
(2) The following specific sections of the Medicare Modernization Act also address the prescription drug benefit program:
Sec. 102 Medicare Advantage conforming amendments.
Sec. 103 Medicaid amendments.
Sec. 104 Medigap.
Sec. 109 Expanding the work of Medicare Quality Improvement Organizations to include Parts C and D.
(b)
The following definitions apply to this part, unless the context indicates otherwise:
(1) Performs some of the Part D plan sponsor's management functions under contract or delegation;
(2) Furnishes services to Medicare enrollees under an oral or written agreement; or
(3) Leases real property or sells materials to the Part D plan sponsor at a cost of more than $2,500 during a contract period.
(1) A prescription drug plan, an area established in § 423.112(a) within which access standards under § 423.120(a) are met;
(2) An MA-PD plan, an area that meets the definition of MA service area as described in § 422.2 of this chapter, and within which access standards under § 423.120(a) are met;
(3) A fallback prescription drug plan, the service area described in § 423.859(b);
(4) A PACE plan offering qualified prescription drug coverage, the service area described in § 460.22 of this chapter; and
(5) A cost plan offering qualified prescription drug coverage, the service area defined in § 417.1 of this chapter.
The requirements of section 1857(e)(2) of the Act and § 422.6 of this chapter with regard to the payment of fees established by CMS for cost sharing of enrollment related costs apply to PDP sponsors under Part D.
(a)
(i) Is entitled to Medicare benefits under Part A or enrolled in Medicare Part B; and
(ii) Lives in the service area of a Part D plan, as defined under § 423.4.
(2) Except as provided in paragraphs (b), (c), and (d) of this section, an individual is eligible to enroll in a PDP if:
(i) The individual is eligible for Part D in accordance with paragraph (a)(1) of this section;
(ii) The individual resides in the PDP's service area; and
(iii) The individual is not enrolled in another Part D plan.
(3) Retroactive Part A or Part B determinations. Individuals who become entitled to Medicare Part A or enrolled in Medicare Part B for a retroactive effective date are Part D eligible as of the month in which a notice of entitlement Part A or enrollment in Part B is provided.
(b)
(1) A Part D eligible individual is eligible to enroll in a PDP if the individual is enrolled in a MA private fee-for-service plan (as defined in section 1859(b)(2) of the Act) that does not provide qualified prescription drug coverage; and
(2) A Part D eligible individual is eligible to enroll in a PDP if the individual is enrolled in a MSA plan (as defined in section 1859(b)(3) of the Act).
(c)
(d)
(a)
(b)
(i) The enrollment must be completed by the individual and include an acknowledgement by the beneficiary for disclosure and exchange of necessary information between the U.S. Department of Health and Human Services (or its designees) and the PDP sponsor. Individuals who assist beneficiaries in completing the enrollment, including authorized representatives, must indicate they have provided assistance and their relationship to the beneficiary.
(ii) Part D eligible individuals enrolling or enrolled in a Part D plan must provide information regarding reimbursement for Part D costs through other insurance, group health plan or other third-party payment arrangement, and consent to the release of the information provided by the individual on other insurance, group health plan or other third-party payment arrangements, as well as any other information on reimbursement of Part D costs collected or obtained from other sources, in a form and manner approved by CMS.
(c)
(d)
(e)
enrolled in a PDP remains enrolled in that PDP until one of the following occurs:
(i) The individual successfully enrolls in another PDP or MA-PD plan;
(ii) The individual voluntarily disenrolls from the PDP;
(iii) The individual is involuntary disenrolled from the PDP in accordance with § 423.44(b)(2);
(iv) The PDP is discontinued within the area in which the individual resides; or
(iv) The individual is enrolled after the initial enrollment, in accordance with § 423.34(c).
(f)
(g)
(1)
(i) Decline the plan selected by CMS, in a form and manner determined by CMS; or
(ii) Request enrollment in another plan.
(2)
(3)
(a)
(b)
(1) Determined eligible by the State for—
(i) Medical assistance for full-benefits under Title XIX of the Act for the month under any eligibility category covered under the State plan or comprehensive benefits under a demonstration under section 1115 of the Act; or
(ii) Medical assistance under section 1902(a)(10(C) of the Act (medically needy) or section 1902(f) of the Act (States that use more restrictive eligibility criteria than are used by the SSI program) for any month if the individual was eligible for medical assistance in any part of the month.
(2) Eligible for Part D in accordance with § 423.30(a) of this subpart.
(c)
(2)
(d)
(2)
(3)
(ii) Before effectuating such an enrollment, CMS provides notice to such individuals of their choices and advises them to discuss the potential impact of Medicare Part D coverage on their group health plan coverage. The notice informs individuals that they will be deemed to have declined to enroll in Part D unless they affirmatively enroll in a Part D plan or contact CMS and confirm that they wish to be auto-enrolled in a PDP. Individuals who elect not to be auto-enrolled, may enroll in Medicare Part D at a later time if they choose to do so.
(iii) All other low income subsidy eligible beneficiaries who are qualified covered retirees are not enrolled by CMS into PDPs.
(4)
(e)
(1) Affirmatively declining enrollment in Part D; or
(2) Disenrolling from the Part D plan in which the individual is enrolled and electing to enroll in another Part D plan during the special enrollment period provided under § 423.38.
(f)
(1) January 1, 2006 for individuals who are full-benefit dual-eligible individuals as of December 31, 2005.
(2) The first day of the month the individual is eligible for Part D under § 423.30(a)(1) for individuals who are Medicaid eligible and subsequently become newly eligible for Part D under § 423.30(a)(1) on or after January 1, 2006.
(3) For individuals who are eligible for Part D under § 423.30(a)(1) of this subpart and subsequently become newly eligible for Medicaid on or after
(g)
(a)
(b)
(1) Submit a disenrollment notice to CMS within timeframes CMS specifies;
(2) Provide the enrollee with a notice of disenrollment as CMS determines and approves; and
(3) File and retain disenrollment requests for the period specified in CMS instructions.
(c)
(1) There never was a legally valid enrollment; or
(2) A valid request for disenrollment was properly made but not processed or acted upon.
(a)
(1)
(2)
(3)
(ii) Exception. For those individuals who are not eligible to enroll in a Part D plan at any time during their initial enrollment period for Medicare Part B, their initial enrollment period under this Part is the 3 months before becoming eligible for Part D, the month of eligibility, and the three months following eligibility to Part D.
(iii) An individual who becomes entitled to Medicare Part A or enrolled in Part B for a retroactive effective date has an initial enrollment period under this Part beginning with the month in which notification of the Medicare determination is received and ending on the last day of the third month following the month in which the notification was received.
(b)
(2)
(3)
(c)
(1) The individual involuntarily loses creditable prescription drug coverage or such coverage is involuntarily reduced so that it is no longer creditable coverage as defined under § 423.56(a).
(2) The individual was not adequately informed, as required by standards established by CMS under § 423.56, that he or she has lost his or her creditable prescription drug coverage, that he or she never had credible prescription drug coverage, or the coverage is involuntarily reduced so that it is no longer creditable prescription drug coverage.
(3) The individual's enrollment or non-enrollment in a Part D plan is unintentional, inadvertent, or erroneous because of the error, misrepresentation, or inaction of a Federal employee, or any person authorized by the Federal government to act on its behalf.
(4) The individual is a full-subsidy eligible individual or other subsidy-eligible individual as defined in § 423.772 of this part.
(5) The individual elects to disenroll from a MA-PD plan and elects coverage under Medicare Part A and Part B in accordance with § 422.62(c) of this chapter.
(6) The PDP sponsor's contract is terminated by the PDP sponsor or by CMS, as provided under § 423.507 through § 423.510, or the PDP plan is no longer offered in the area when the individual resides.
(7) The individual is no longer eligible for the PDP because of a change in his or her place of residence to a location outside of the PDP region(s) in which the PDP is offered.
(8) The individual demonstrates to CMS, in accordance with guidelines issued by CMS, that—
(i) The PDP sponsor offering the PDP substantially violated a material provision of its contract under this part in relation to the individual, including, but not limited to the following—
(A) Failure to provide the individual on a timely basis benefits available under the plan;
(B) Failure to provide benefits in accordance with applicable quality standards; or
(C) The PDP (or its agent, representative, or plan provider) materially misrepresented the plan's provisions in marketing the plan to the individual.
(ii) The individual meets other exceptional circumstances as CMS may provide.
(d)
(a)
(2) Except as otherwise provided under § 423.34(f), an enrollment made during or after the month of entitlement to Part A or enrollment in Part B is effective the first day of the calendar month following the month in which the enrollment in Part D is made.
(3) If the individual is not eligible to enroll in Part D on the first day of the calendar month following the month in which the election to enroll in Part D is made, the enrollment in Part D is effective the first day of the month the individual is eligible for Part D.
(4) In no case is an enrollment in Part D effective before January 1, 2006 or before entitlement to Part A or enrollment Part B.
(b)
(2)
(c)
(d)
(a)
(1) Involuntarily disenroll an individual from any PDP it offers; or
(2) Orally or in writing, or by any action or inaction, request or encourage an individual to disenroll.
(b)
(i) Any monthly premium is not paid on a timely basis, as specified under paragraph (d)(1) of this section; or
(ii) The individual has engaged in disruptive behavior, as specified under paragraph (d)(2) of this section.
(2)
(i) The individual no longer resides in the PDP's service area.
(ii) The individual loses eligibility for Part D.
(iii) Death of the individual.
(iv) The PDP sponsor's contract is terminated by CMS
or by a PDP or through mutual consent. The PDP sponsor must disenroll affected enrollees in accordance with the procedures for disenrollment set forth at § 423.507 through § 423.510.
(v) The individual materially misrepresents
information, as determined by CMS, to the PDP sponsor that the individual has or expects to receive reimbursement for third-party coverage.
(c)
(2) Notices for reasons specified in paragraphs (b)(1) through (b)(2)(i) and (b)(2)(iii) of this section must—
(i) Be provided to the individual before submission of the disenrollment notice to CMS; and
(ii) Include an explanation of the individual's right to file a grievance under the PDP's grievance procedures.
(d)
(i) The PDP sponsor can demonstrate to CMS that it made reasonable efforts to collect the unpaid premium amount.
(ii) The PDP sponsor gives the enrollee notice of
disenrollment that meets the requirements set forth in paragraph (c) of this section.
(iii) The PDP sponsor provides the individual with a grace period, that is, an opportunity to pay past due premiums in full. The grace period must—
(A) Be at least 2 months; and
(B) Begin on the first day of the month for which the premium is unpaid or the first day of the month following the date on which premium payment is requested, whichever is later.
(iv)
(v) A PDP sponsor may not disenroll an individual who had monthly premiums withheld per § 423.293(a) and (e) of this part or who is in premium withhold status, as defined by CMS.
(vi)
(vii)
(2)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(3)
(4)
disenrollment is effective the first day of the calendar month following the month of death.
(5)
(ii)
(6)
(ii) The notice must be sent before the effective date of the plan termination or area reduction, and in the timeframes specified by CMS.
(7)
(ii)
(e)
(2)
(3)
(4)
(5)
(a)
(1) The individual was eligible to enroll in a Part D plan;
(2) The individual was not covered under any
creditable prescription drug coverage; and
(3) The individual was not enrolled in a Part D plan.
(b)
(c)
(d)
Each Part D plan must provide, on an annual basis, and in a format and using standard terminology that CMS may specify in guidance, the information necessary to enable CMS to provide to current and potential Part D eligible individuals the information they need to make informed decisions among the available choices for Part D coverage.
(a)
(b)
(1) Prescription drug coverage under a PDP or MA-PD plan.
(2) Medicaid coverage under title XIX of the Act or under a waiver under section 1115 of the Act.
(3) Coverage under a group health plan, including the Federal employees health benefits program, and qualified retiree prescription drug plans as defined in section 1860D-22(a)(2) of the Act.
(4) Coverage under State Pharmaceutical
Assistance Programs (SPAP) as defined at § 423.454.
(5) Coverage of prescription drugs for veterans, survivors and dependents under chapter 17 of title 38, U.S.C.
(6) Coverage under a Medicare supplemental policy (Medigap policy) as defined at § 403.205 of this chapter.
(7) Military coverage under chapter 55 of title 10,
U.S.C., including TRICARE.
(8) Individual health insurance coverage (as defined in section 2791(b)(5) of the Public Health Service Act) that includes coverage for outpatient prescription drugs and that does not meet the definition of an excepted benefit (as defined in section 2791(c) of the Public Health Service Act).
(9) Coverage provided by the medical care program of the Indian Health Service, Tribe or Tribal organization, or Urban Indian organization (I/T/U).
(10) Coverage provided by a PACE organization.
(11) Coverage provided by a cost-based HMO or CMP under part 417 of this chapter.
(12) Coverage provided through a State High-Risk Pool as defined under 42 CFR 146.113(a)(1)(vii).
(13) Other coverage as the Secretary may determine appropriate.
(c)
(d)
(1) The fact that the coverage is not creditable prescription drug coverage, as provided by CMS;
(2) That there are limitations on the periods in a year in which the individual may enroll in Part D plans; and
(3) That the individual may be subject to a late enrollment penalty, as described under § 423.46.
(e)
(f)
(1) Prior to an individual's initial enrollment period for Part D, as described under § 423.38(a);
(2) Prior to the effective date of enrollment in the prescription drug coverage and upon any change that affects whether the coverage is creditable prescription drug coverage;
(3) Prior to the commencement of the Annual Coordinated Election Period that begins on November 15 of each year, as defined in § 423.38(b); and
(4) Upon request by the individual.
(g)
As used in this part, unless otherwise specified-
(1)
(2)
(1) Is enrolled in a prescription drug plan or an MA-PD plan;
(2) Is not enrolled in a qualified retiree prescription drug plan;
(3) Is not entitled to an income-related subsidy under section 1860D-14(a) of the Act;
(4) Has reached or exceeded the initial coverage limit under section 1860D-2(b)(3) of the Act during the year;
(5) Has not incurred costs for covered part D drugs in the year equal to the annual out-of-pocket threshold specified in section 1860D-2(b)(4)(B) of the Act; and
(6) Has a claim that—
(i) Is within the coverage gap;
(ii) Straddles the initial coverage period and the coverage gap;
(iii) Straddles the coverage gap and the annual out-of-pocket threshold; or
(iv) Spans the coverage gap from the initial coverage period and exceeds the annual out-of-pocket threshold.
(1)(i) Approved under a new drug application under section 505(b) of the Federal Food, Drug, and Cosmetic Act (FDCA); or
(ii) In the case of a biological product, licensed under section 351 of the Public Health Service Act (other than a product licensed under subsection (k) of such section 351); and
(2)(i) If the PDP sponsor of the prescription drug plan or the MA organization offering the MA-PD plan uses a formulary, which is on the formulary of the prescription drug plan or MA-PD plan that the applicable beneficiary is enrolled in;
(ii) If the PDP sponsor of the prescription drug plan or the MA organization offering the MA-PD plan does not use a formulary, for which benefits are available under the prescription drug plan or MA-PD plan that the applicable beneficiary is enrolled in; or
(iii) Is provided to a particular applicable beneficiary through an exception or appeal for that particular applicable beneficiary.
(1) Are incurred at the point of sale and pay for costs in excess of the ingredient cost of a covered Part D drug each time a covered Part D drug is dispensed;
(2) Include only pharmacy costs associated with ensuring that possession of the appropriate covered Part D drug is transferred to a Part D enrollee. Pharmacy costs include, but are not limited to, any reasonable costs associated with a pharmacist's time in checking the computer for information about an individual's coverage, performing quality assurance activities consistent with § 423.153(c)(2), measurement or mixing of the covered Part D drug, filling the container, physically providing the completed prescription to the Part D enrollee, delivery, special packaging, and salaries of pharmacists and other pharmacy workers as well as the costs associated with maintaining the pharmacy facility and acquiring and maintaining technology and equipment necessary to operate the pharmacy. Dispensing fees should take into consideration the number of dispensing events in a billing cycle, the incremental costs associated with the type of dispensing methodology, and with respect to Part D drugs dispensed in LTC facilities, the techniques to minimize the dispensing of unused drugs. Dispensing fees may also take into account costs associated with data collection on unused Part D drugs and restocking fees associated with return for credit and reuse in long-term care pharmacies, when return for credit and reuse is permitted under the State in law and is allowed under the contract between the Part D sponsor and the pharmacy.
(3) Do not include administrative costs incurred by the Part D plan in
(1) An approved State child health plan under title XXI of the Act providing benefits for child health assistance that meets the requirements of section 2103 of the Act;
(2) The Medicaid program under title XIX of the Act or a waiver under section 1115 of the Act;
(3) The veterans' health care program under Chapter 17 of title 38 of the United States Code;
(4) The Indian Health Service program under the Indian Health Care Improvement Act under Chapter 18 of title 25 of the United States Code; and
(5) Any other government-funded program whose principal activity is the direct provision of health care to persons.
(1)(i) Covered Part D drugs that are not paid for under the Part D plan as a result of application of any annual deductible or other cost-sharing rules for covered Part D drugs prior to the Part D enrollee satisfying the out-of-pocket threshold under § 423.104(d)(5)(iii), including any price differential for which the Part D enrollee is responsible under § 423.124(b); or
(ii) Nominal cost-sharing paid by or on behalf of an enrollee, which is associated with drugs that would otherwise be covered Part D drugs, as defined in § 423.100, but are instead paid for, with the exception of said nominal cost-sharing, by a patient assistance program providing assistance outside the Part D benefit, provided that documentation of such nominal cost-sharing has been submitted to the Part D plan consistent with the plan processes and instructions for the submission of such information; and
(2) That are paid for—
(i) By the Part D enrollee or on behalf of the Part D enrollee by another person, and the Part D enrollee (or person paying on behalf of the Part D enrollee) is not reimbursed through insurance or otherwise, a group health plan, or other third party payment arrangement, or the person paying on behalf of the Part D enrollee is not paying under insurance or otherwise, a group health plan, or third party payment arrangement;
(ii) Under a State Pharmaceutical Assistance Program (as defined in § 423.464); by the Indian Health Service, an Indian tribe or tribal organization, or an urban Indian organization (as defined in section 4 of the Indian Health Care Improvement Act) or under an AIDS Drug Assistance Program (as defined in part B of title XXVI of the Public Health Service); or
(iii) Under § 423.782 of this part.
(1) Health insurance coverage (as defined in 42 U.S.C. 300gg-91(b)(1));
(2) A Medicare Advantage plan (as described under section 1851(a)(2) of the Act); and
(3) A PACE organization (as defined under sections 1894(a)(3) and 1934(a)(13) of the Act)
but specifically excluding a personal health savings vehicle.
(1) The Part D sponsor (or other intermediary contracting organization) and the network dispensing pharmacy or other network dispensing provider have negotiated as the amount such network entity will receive, in total, for a particular drug;
(2) Are reduced by those discounts, direct or indirect subsidies, rebates, other price concessions, and direct or indirect remuneration that the Part D sponsor has elected to pass through to Part D enrollees at the point of sale; and
(3) Includes any dispensing fees.
(1) Unless excluded under paragraph (2) of this definition, any of the following if used for a medically accepted indication (as defined in section 1860D-2(e)(4) of the Act)—
(i) A drug that may be dispensed only upon a prescription and that is described in sections 1927(k)(2)(A)(i) through (iii) of the Act.
(ii) A biological product described in sections 1927(k)(2)(B)(i) through (iii) of the Act.
(iii) Insulin described in section 1927(k)(2)(C) of the Act.
(iv) Medical supplies associated with the injection of insulin, including syringes, needles, alcohol swabs, and gauze.
(v) A vaccine licensed under section 351 of the Public Health Service Act and for vaccine administration on or after January 1, 2008, its administration.
(vi) Supplies that are directly associated with delivering insulin into the body, such as an inhalation chamber used to deliver the insulin through inhalation.
(2) Does not include—
(i) Drugs for which payment as so prescribed and dispensed or administered to an individual is available for that individual under Part A or Part B (even though a deductible may apply, or even though the individual is eligible for coverage under Part A or Part B but has declined to enroll in Part A or Part B); and
(ii) Drugs or classes of drugs, or their medical uses, which may be excluded from coverage or otherwise restricted under Medicaid under sections 1927(d)(2) or (d)(3) of the Act, except for smoking cessation agents.
(1) A Health Savings Account (as defined under section 220 of the Internal Revenue Code);
(2) A Flexible Spending Account (as defined in section 106(c)(2) of the Internal Revenue Code) offered in conjunction with a cafeteria plan under section 125 of the Internal Revenue Code; and
(3) An Archer Medical Savings Account (as defined under section 223 of the Internal Revenue Code);
but specifically excluding a Health Reimbursement Arrangement (as described under Internal Revenue Ruling
(1) Basic prescription drug coverage; or
(2) Enhanced alternative coverage, provided there is no MA monthly supplemental beneficiary premium (as defined under section 1854(b)(2)(C) of the Act) applied under the plan due to the application of a credit against the premium of a rebate under § 422.266(b) of this chapter.
(1)
(2)
(a)
(b)
(1) To all Part D eligible beneficiaries residing in the plan's service area; and
(2) At a uniform premium, with uniform benefits and level of cost-sharing throughout the plan's service area.
(c)
(d)
(1)
(i)
(ii)
(2)
(A) Equal to 25 percent of actual cost; or
(B) Actuarially equivalent to an average expected coinsurance of no more than 25 percent of actual cost, as determined through processes and methods established under § 423.265(c) and (d).
(ii)
(3)
(i)
(ii)
(4)
(A) Equal to the generic gap coinsurance percentage described in paragraph (d)(4)(iii) of this section; or
(B) Actuarially equivalent to an average expected coinsurance for covered Part D drugs that are not applicable drugs under the Medicare coverage gap discount program, as determined through processes and methods established under § 423.265 (c) and (d).
(ii) Coinsurance in the coverage gap for the actual cost minus the dispensing fee and any vaccine administration fee for covered Part D drugs that are applicable drugs under the Medicare coverage gap discount program that is—
(A) Equal to the difference between the applicable gap coinsurance percentage described in paragraph (d)(4)(iv) of this section and the discount percentage determined under the Medicare coverage gap discount program; or
(B) Actuarially equivalent to an average expected coinsurance for covered Part D drugs that are applicable drugs under the Medicare coverage gap discount program, as determined through processes and methods established under § 423.265 (c) and (d).
(iii)
(A) For 2011, 93 percent.
(B) For years 2012 through 2019, the amount specified in this paragraph for the previous year, decreased by 7 percentage points.
(C) For 2020 and each subsequent year, 25 percent.
(iv)
(A) For 2013 and 2014, 97.5 percent.
(B) For 2015 and 2016, 95 percent.
(C) For 2017, 90 percent.
(D) For 2018, 85 percent.
(E) For 2019, 80 percent.
(F) For 2020 and subsequent years, 75 percent.
(5)
(A)
(
(B)
(ii) As determined through processes and methods established under § 423.265(c) and (d), a Part D plan may substitute for cost-sharing under paragraph (d)(5)(i) of this section an amount that is actuarially equivalent to expected cost-sharing under paragraph (d)(5)(i) of this section.
(iii)
(A)
(B)
(C)
(D)
(
(
(E)
(F)
(iv)
(v)
(e)
(1) Has an annual deductible that does not exceed the annual deductible specified in paragraph (d)(1) of this section;
(2) Imposes cost-sharing no greater than that specified in paragraphs (d)(5)(i) or (ii) of this section once the annual out-of-pocket threshold described in paragraph (d)(5)(iii) of this section is met;
(3) Has a total or gross value that is at least equal to the total or gross value of defined standard coverage.
(4) Has an unsubsidized value that is at least equal to the unsubsidized value of standard prescription drug coverage. For purposes of this subparagraph, the unsubsidized value of coverage is the amount by which the actuarial value of the coverage exceeds the actuarial value of the subsidy payments under § 423.782 for the coverage; and
(5) Provides coverage that is designed, based upon an actuarially representative pattern of utilization, to provide for the payment, for costs incurred for covered Part D drugs, that are equal to the initial coverage limit under paragraph (d)(3) of this section,
(i) The amount by which the initial coverage limit described in paragraph (d)(3) of this section for the year exceeds the deductible described in paragraph (d)(1) of this section; and
(ii) 100 percent minus the coinsurance percentage specified in paragraph (d)(2)(i) of this section.
(f)
(i) Basic prescription drug coverage, as defined in § 423.100; and
(ii) Supplemental benefits, which include-
(A) Coverage of drugs that are specifically excluded as Part D drugs under paragraph (2)(ii) of the definition of Part D drug under § 423.100; or
(B) Any of the following changes or combination of changes that increase the actuarial value of benefits under the Part D plan above the actuarial value of defined standard prescription drug coverage, as determined through processes and methods established under § 423.265—
(
(
(
(C) Both the coverage described in paragraph (f)(1)(ii)(A) of this section and the changes or combination of changes described in paragraph (f)(1)(ii)(B) of this section.
(2)
(3)
(i) May not offer an MA coordinated care plan, as defined in § 422.4 of this chapter, in an area unless either that plan (or another MA plan offered by the MA organization in that same service area) includes required prescription drug coverage; and
(ii) May not offer prescription drug coverage (other than that required under Parts A and B of title XVIII of the Act) to an enrollee—
(A) Under an MSA plan, as defined in § 422.2 of this chapter; or
(B) Under another MA plan (including a private fee-for-service plan, as defined in § 422.4 of this chapter) unless the drug coverage under the other plan provides qualified prescription drug coverage and unless the requirements of paragraph (f)(3)(i) of this section are met.
(4)
(ii) A cost plan that offers qualified prescription drug coverage as an optional supplemental benefit under § 417.440(b)(2)(ii) of this chapter may not offer prescription drug coverage that is not qualified prescription drug coverage. A cost plan that does not offer qualified prescription drug coverage under § 417.440(b)(2)(ii) of this chapter may offer prescription drug coverage that is not qualified prescription drug coverage under § 417.440(b)(2)(i) of this chapter.
(g)
(2)
(i) A Part D plan, as defined in § 423.4; or
(iii) A qualified retiree prescription drug plan (as defined in § 423.882) for Part D eligible individuals.
(3)
(ii) Information on negotiated prices disclosed to CMS under paragraph (g)(3) of this section is protected under the confidentiality provisions applicable under section 1927(b)(3)(D) of the Act.
(4)
(a)
(b)
(2)
(c)
(d)
(e)
(a)
(i) At least 90 percent of Medicare beneficiaries, on average, in urban areas served by the Part D sponsor live within 2 miles of a network pharmacy that is a retail pharmacy or a pharmacy described under paragraph (a)(2) of this section.
(ii) At least 90 percent of Medicare beneficiaries, on average, in suburban areas served by the Part D sponsor live within 5 miles of a network pharmacy that is a retail pharmacy or a pharmacy described under paragraph (a)(2) of this section.
(iii) At least 70 percent of Medicare beneficiaries, on average, in rural areas served by the Part D sponsor live within 15 miles of a network pharmacy that is a retail pharmacy or a pharmacy described under paragraph (a)(2) of this section.
(2)
(3)
(4)
(i) Are capable of delivering home-infused drugs in a form that can be administered in a clinically appropriate fashion.
(ii) Are capable of providing infusible Part D drugs for both short-term acute care and long-term chronic care therapies.
(iii) Ensure that the professional services and ancillary supplies necessary for home infusion therapy are in place before dispensing Part D home infusion drugs.
(iv) Provide delivery of home infusion drugs within 24 hours of discharge from an acute care setting, or later if so prescribed.
(5)
(6)
(7)
(i) An MA organization or cost contract (as described in section 1876(h) of the Act) that provides its enrollees with access to covered Part D drugs through pharmacies owned and operated by the MA organization or cost contract, provided the organization's or plan's pharmacy network meets the access standard set forth—
(A) At § 422.112 of this chapter for an MA organization; or
(B) At § 417.416(e) of this chapter for a cost contract.
(ii) An MA organization offering a private fee-for-service plan described in § 422.4 of this chapter that—
(A) Offers qualified prescription drug coverage; and
(B) Provides plan enrollees with access to covered Part D drugs dispensed at all pharmacies, without regard to whether they are contracted network pharmacies and without charging cost-sharing in excess of that described in § 423.104(d)(2) and (d)(5).
(8) Pharmacy network contracting requirements. In establishing its contracted pharmacy network, a Part D sponsor offering qualified prescription drug coverage—
(i) Must contract with any pharmacy that meets the Part D sponsor's standard terms and conditions; and
(ii) May not require a pharmacy to accept insurance risk as a condition of participation in the Part D sponsor's contracted pharmacy network.
(9)
(10)
(b)
(1)
(i) Includes a majority of members who are practicing physicians and/or practicing pharmacists.
(ii) Includes at least one practicing physician and at least one practicing pharmacist who are independent and free of conflict relative to-
(A) The Part D sponsor and Part D plan; and
(B) Pharmaceutical manufacturers.
(iii) Includes at least one practicing physician and one practicing pharmacist who are experts regarding care of elderly or disabled individuals.
(iv) Bases clinical decisions on the strength of scientific evidence and standards of practice, including assessing peer-reviewed medical literature, pharmacoeconomic studies, outcomes research data, and other such information as it determines appropriate.
(v) Considers whether the inclusion of a particular Part D drug in a formulary or formulary tier has any therapeutic advantages in terms of safety and efficacy.
(vi) Reviews policies that guide exceptions and other utilization management processes, including drug utilization review, quantity limits, generic substitution, and therapeutic interchange.
(vii) Evaluates and analyzes treatment protocols and procedures related to the plan's formulary at least annually consistent with written policy guidelines and other CMS instructions.
(viii) Documents in writing its decisions regarding formulary development and revision and utilization management activities.
(ix) Reviews and approves all clinical prior authorization criteria, step therapy protocols, and quantity limit restrictions applied to each covered Part D drug.
(x) Meets other requirements consistent with written policy guidelines and other CMS instructions.
(2) Provision of an Adequate Formulary. A Part D plan's formulary must—
(i) Except as provided in paragraphs (b)(2)(ii) and (v) of this section, include within each therapeutic category and class of Part D drugs at least two Part D drugs that are not therapeutically equivalent and bioequivalent, with different strengths and dosage forms available for each of those drugs, except that only one Part D drug must be included in a particular category or
(ii) Include at least one Part D drug within a particular category or class of Part D drugs to the extent the Part D plan demonstrates, and CMS approves, the following-
(A) That only two drugs are available in that category or class of Part D drugs; and
(B) That one drug is clinically superior to the other drug in that category or class of Part D drugs.
(iii) Include adequate coverage of the types of drugs most commonly needed by Part D enrollees, as recognized in national treatment guidelines.
(iv) Be approved by CMS consistent with § 423.272(b)(2).
(v) Effective contract year 2010, a Part D Sponsor's formulary will include all Part D drugs in a category or class that CMS has identified as meeting the two conditions set forth in section 1860D-4(b)(3)(G)(i) of the Act. CMS may establish certain exceptions, which may include the application of drug utilization management under certain circumstances, through a process that provides for public notice and comment, and ensures that any exception to such requirements is based upon scientific evidence and medical standards of practice (and, in the case of antiretroviral medications, is consistent with the Department of Health and Human Services Guidelines for the Use of Antiretroviral Agents in HIV-1-Infected Adults and Adolescents).
(vi) Exceptions to paragraph (b)(2)(v) of this section are as follows:
(A) Drug products that are rated as therapeutically equivalent (under the Food and Drug Administration's most recent publication of “Approved Drug Products with Therapeutic Equivalence Evaluations,” also known as the Orange Book).
(B) Utilization management processes that limit the quantity of drugs due to safety.
(C) Other drugs that CMS specifies through a process that is based upon scientific evidence and medical standards of practice (and, in the case of antiretroviral medications, is consistent with the Department of Health and Human Services Guidelines for the Use of Antiretroviral Agents in HIV-1-Infected Adults and Adolescents) and which permits public notice and comment.
(3)
(i) Be applicable to all of the following:
(A) New enrollees into Part D plans following the annual coordinated election period.
(B) Newly eligible Medicare enrollees from other coverage.
(C) Individuals who switch from one plan to another after the start of the contract year.
(D) Current enrollees remaining in the plan affected by formulary changes.
(ii) Ensure access to a temporary supply of drugs within the first 90 days of coverage under a new plan. This 90 day timeframe applies to retail, home infusion, long-term care and mail-order pharmacies,
(iii) Ensure the provision of a temporary fill when an enrollee requests a fill of a non-formulary drug during the time period specified in paragraph (b)(3)(ii) of this section (including Part D drugs that are on a plan's formulary but require prior authorization or step therapy under a plan's utilization management rules).
(A) In the outpatient setting, the one-time, temporary supply of non-formulary Part D drugs (including Part D drugs that are on a sponsor's formulary but require prior authorization or step therapy under a sponsor's utilization management rules) must be for at least 30 days of medication, unless the prescription is written by a prescriber for less than 30 days and requires the Part D sponsor to allow multiple fills to provide up to a total of 30 days of medication.
(B) In the long-term care setting, the temporary supply of non-formulary Part D drugs (including Part D drugs that are on a sponsor's formulary but
(iv) Ensure written notice is provided to each affected enrollee within 3 business days after adjudication of the temporary fill. For long-term care residents dispensed multiple supplies of a Part D drug, in increments of 14-days-or-less, consistent with the requirements under § 423.154, the written notice must be provided within 3 business days after adjudication of the first temporary fill.
(v) Ensure that reasonable efforts are made to notify prescribers of affected enrollees who receive a transition notice under paragraph (b)(3)(iv) of this section.
(4)
(5)
(A) Provide direct written notice to affected enrollees at least 60 days prior to the date the change becomes effective; or
(B) At the time an affected enrollee requests a refill of the Part D drug, provide such enrollee with a 60 day supply of the Part D drug under the same terms as previously allowed, and written notice of the formulary change.
(ii) The written notice must contain the following information-
(A) The name of the affected covered Part D drug;
(B) Whether the plan is removing the covered Part D drug from the formulary, or changing its preferred or tiered cost-sharing status;
(C) The reason why the plan is removing such covered Part D drug from the formulary, or changing its preferred or tiered cost-sharing status;
(D) Alternative drugs in the same therapeutic category or class or cost-sharing tier and expected cost-sharing for those drugs; and
(E) The means by which enrollees may obtain a coverage determination under § 423.566 or exception under § 423.578.
(iii) Part D sponsors may immediately remove from their Part D plan formularies covered Part D drugs deemed unsafe by the Food and Drug Administration or removed from the market by their manufacturer without meeting the requirements of paragraphs (b)(5)((i) of this section. Part D sponsors must provide retrospective notice of any such formulary changes to affected enrollees, CMS, State Pharmaceutical Assistance Programs (as defined in § 423.454), entities providing other prescription drug coverage (as described in § 423.464(f)(1)), authorized prescribers, network pharmacies, and pharmacists consistent with the requirements of paragraphs (b)(5)(ii)(A), (b)(5)(ii)(B), (b)(5)(ii)(C), and (b)(5)(ii)(D) of this section.
(6)
(7)
(c)
(2) When processing Part D claims, a Part D sponsor or its intermediary must comply with the electronic transaction standards established by 45 CFR 162.1102. CMS will issue guidance on the use of conditional fields within such standards.
(3) A Part D sponsor must require its network pharmacies to submit claims to the Part D sponsor or its intermediary whenever the card described in paragraph (c)(1) of this section is presented or on file at the pharmacy unless the enrollee expressly requests that a particular claim not be submitted to the Part D sponsor or its intermediary.
(4) Beginning January 1, 2012, a part D sponsor must assign and exclusively use a unique—
(i) Part D BIN or RxBIN and Part D processor control number (RxPCN) combination in its Medicare line of business; and
(ii) Part D cardholder identification number (RxID) to each Medicare Part D enrollee to clearly identify Medicare Part D beneficiaries.
(d)
(1) Make a determination as to whether the compound is covered under Part D.
(i) A compound that contains at least one ingredient covered under Part B as prescribed and dispensed or administered is considered a Part B compound, regardless of whether other ingredients in the compound are covered under Part B as prescribed and dispensed or administered.
(ii) Only compounds that contain at least one ingredient that independently meets the definition of a Part D drug, and that do not meet the criteria under paragraph (d)(1)(i) of this section, may be covered under Part D. For purposes of this paragraph (d) these compounds are referred to as Part D compounds.
(iii) For a Part D compound to be considered on-formulary, all ingredients that independently meet the definition of a Part D drug must be considered on-formulary (even if the particular Part D drug would be considered off-formulary if it were provided separately—that is, not as part of the Part D compound).
(iv) For a Part D compound that is considered off-formulary—
(A) Transition rules apply such that all ingredients in the Part D compound that independently meet the definition of a Part D drug must become payable in the event of a transition fill under § 423.120(b)(3); and
(B) All ingredients that independently meet the definition of a Part D drug must be covered if an exception under § 423.578(b) is approved for coverage of the compound.
(2) Establish consistent rules for beneficiary payment liabilities for both ingredients of the Part D compound that independently meet the definition of a Part D drug and non-Part D ingredients.
(i) For low income subsidy beneficiaries the copayment amount is based on whether the most expensive ingredient that independently meets the definition of a Part D drug in the Part D compound is a generic or brand name drug (as described under § 423.782).
(ii) For any non-Part D ingredient of the Part D compound (including drugs described under § 423.104(f)(1)(ii)(A)), the Part D sponsor's contract with the pharmacy must prohibit balance billing the beneficiary for the cost of any such ingredients.
(a)
(i) Cannot reasonably be expected to obtain such drugs at a network pharmacy; and
(ii) Do not access covered Part D drugs at an out-of-network pharmacy on a routine basis.
(2)
(b)
(c)
(a)
(1) To each enrollee of a Part D plan offered by the Part D sponsor under this part;
(2) In a clear, accurate, and standardized form; and
(3) At the time of enrollment and at least annually thereafter, 15 days before the annual coordinated election period.
(b)
(1)
(2)
(i) Applicable conditions and limitations.
(ii) Premiums.
(iii) Cost-sharing (such as copayments,
deductibles, and coinsurance), and cost-sharing for subsidy eligible individuals.
(iv) Any other conditions associated with receipt or use of benefits.
(3)
(4)
(i) A list of drugs included on the plan's formulary;
(ii) The manner in which the formulary (including any tiered formulary structure and utilization management procedures used) functions;
(iii) The process for obtaining an exception to a plan's formulary or tiered cost-sharing structure; and
(iv) A description of how a Part D eligible individual may obtain additional information on the formulary, in accordance with paragraph (d) of this section.
(5)
(6)
(7)
(i) Access to a uniform model form used to request a coverage determination under § 423.568 or § 423.570, and a uniform model form used to request a redetermination under § 423.582 or § 423.584, to the extent such uniform model forms have been approved for use by CMS;
(ii) Immediate access to the coverage determination and redetermination processes via an Internet Web site; and
(iii) A system that transmits codes to network pharmacies so that the network pharmacy is notified to populate and/or provide a printed notice at the point-of-sale to an enrollee explaining how the enrollee can request a coverage determination by contacting the plan sponsor's toll free customer service line or by accessing the plan sponsor's internet Web site.
(8)
(9)
(10)
(c)
(1)
(i)
(ii)
(iii)
(B) Any beneficiary cost-sharing, such as deductibles, coinsurance, and copayment amounts, including cost-sharing for subsidy eligible individuals;
(C) Any maximum limitations on out-of-pocket expenses;
(D) The extent to which an enrollee may obtain benefits from out-of-network providers;
(E) The types of pharmacies that participate in the Part D plan's network and the extent to which an enrollee may select among those pharmacies; and
(F) The Part D plan's out-of-network pharmacy access policy.
(iv) Premiums;
(v) The Part D plan's formulary;
(vi) The Part D plan's service area; and
(vii) Quality and performance indicators for benefits under the Part D plan as determined by CMS.
(2) The procedures the Part D sponsor uses to control utilization of services and expenditures.
(3) The number of disputes, and the disposition in the aggregate, in a manner and form described by CMS. These disputes are categorized as—
(i) Grievances according to § 423.564;
(ii) Appeals according to § 423.580 et. seq.; and
(iii) Exceptions according to § 423.578.
(4) Financial condition of the Part D sponsor, including the most recently audited information regarding, at a minimum, a description of the financial condition of the Part D sponsor offering the Part D plan.
(d)
(1) A toll-free customer call center that—
(i) Is open during usual business hours.
(ii) Provides customer telephone service, including to pharmacists, in accordance with standard business practices.
(iii) Provides interpreters for non-English speaking and limited English proficient (LEP) individuals.
(iv) Provides immediate access to the coverage determination and redetermination processes.
(2) An Internet website that—
(i) Includes, at a minimum, the information required in paragraph (b) of this section.
(ii) Includes a current formulary for its Part D plan, updated at least monthly.
(iii) Provides current and prospective Part D enrollees with at least 60 days notice regarding the removal or change in the preferred or tiered cost-sharing status of a Part D drug on its Part D plan's formulary.
(3) The provision of information in writing, upon request.
(e)
(1) List the item or service for which payment was made and the amount of the payment for each item or service.
(2) Include a notice of the individual's right to request an itemized statement.
(3) Include the cumulative, year-to-date total amount of benefits provided, in relation to—
(i) The deductible for the current year.
(ii) The initial coverage limit for the current year.
(iii) The annual out-of-pocket threshold for the current year.
(4) Include the cumulative, year-to-date total of incurred costs to the extent practicable.
(5) Include any applicable formulary changes for which Part D plans are required to provide notice as described in § 423.120(b)(5).
(6) Be provided no later than the end of the month following any month when prescription drug benefits are provided under this part, including the covered Part D spending between the initial coverage limit described in § 423.104(d)(3) and the out-of-pocket threshold described in § 423.104(d)(5)(iii).
(f)
(a)
(b)
(c)
(1) An MA private fee-for-service plan described in § 422.4 of this chapter that—
(i) Offers qualified prescription drug coverage and provides plan enrollees with access to covered Part D drugs dispensed at all pharmacies, without regard to whether they are contracted network pharmacies; and
(ii) Does not charge additional cost-sharing for access to covered Part D drugs dispensed at out-of-network pharmacies.
(2) An out-of-network pharmacy.
(3) An I/T/U network pharmacy.
(4) A network pharmacy that is located in any of the U.S. territories.
(5) A long-term care network pharmacy.
(6) Other circumstances where CMS deems compliance with the requirements of paragraph (a) of this section to be impossible or impracticable.
(d)
For any medical records or other health and enrollment information it maintains with respect to enrollees, a PDP sponsor must establish procedures to do the following—
(a) Abide by all Federal and State laws regarding confidentiality and disclosure of medical records, or other health and enrollment information. The PDP sponsor must safeguard the privacy of any information that identifies a particular enrollee and have procedures that specify—
(1) For what purposes the information is used within the organization; and
(2) To whom and for what purposes it discloses the information outside the organization.
(b) Ensure that medical information is released only in accordance with applicable Federal or State law, or under court orders or subpoenas.
(c) Maintain the records and information in an accurate and timely manner.
(d) Ensure timely access by enrollees to the records and information that pertain to them.
This subpart sets forth the requirements relating to the following:
(a) Drug utilization management programs, quality assurance measures and systems, and medication therapy management programs (MTMP) for Part D sponsors.
(b) Appropriate dispensing of prescription drugs in long-term care facilities under PDPs and MA-PD plans.
(c) Consumer satisfaction surveys of Part D plans.
(d) Electronic prescription drug programs for prescribers, dispensers, and Part D sponsors.
(e) Quality improvement organization (QIO) activities.
(f) Compliance deemed on the basis of accreditation.
(g) Accreditation organizations.
(h) Procedures for the approval of accreditation organizations as a basis for deeming compliance.
(a)
(b)
(1) Includes incentives to reduce costs when medically appropriate;
(2) Maintains policies and systems to assist in preventing over-utilization and under-utilization of prescribed medications; and
(3) Provides CMS with information concerning the procedures and performance of its drug utilization management program, according to guidelines specified by CMS.
(c)
(1) Representation that network providers are required to comply with minimum standards for pharmacy practice as established by the States.
(2) Concurrent drug utilization review systems, policies, and procedures designed to ensure that a review of the prescribed drug therapy is performed before each prescription is dispensed to an enrollee in a sponsor's Part D plan, typically at the point-of-sale or point of distribution. The review must include, but not be limited to,
(i) Screening for potential drug therapy problems due to therapeutic duplication.
(ii) Age/gender-related contraindications.
(iii) Over-utilization and under-utilization.
(iv) Drug-drug interactions.
(v) Incorrect drug dosage or duration of drug therapy. (vi) Drug-allergy contraindications.
(vii) Clinical abuse/misuse.
(3) Retrospective drug utilization review systems, policies, and procedures designed to ensure ongoing periodic examination of claims data and other records, through computerized drug claims processing and information retrieval systems, in order to identify patterns of inappropriate or medically unnecessary care among enrollees in a sponsor's Part D plan, or associated with specific drugs or groups of drugs.
(4) Internal medication error identification and reduction systems.
(5) Provision of information to CMS regarding its quality assurance measures and systems, according to guidelines specified by CMS.
(d)
(i) Is designed to ensure that covered Part D drugs prescribed to targeted beneficiaries described in paragraph (d)(2) of this section are appropriately used to optimize therapeutic outcomes through improved medication use;
(ii) Is designed to reduce the risk of adverse events, including adverse drug interactions, for targeted beneficiaries described in paragraph (d)(2) of this section;
(iii) May be furnished by a pharmacist or other qualified provider; and
(iv) May distinguish between services in ambulatory and institutional settings.
(v) Must enroll targeted beneficiaries using an opt-out method of enrollment only.
(vi) Must target beneficiaries for enrollment in the MTMP at least quarterly during each plan year.
(vii) Must offer a minimum level of medication therapy management services for each beneficiary enrolled in the MTMP that includes all of the following:
(A) Interventions for both beneficiaries and prescribers.
(B) Annual comprehensive medication review with written summaries. The comprehensive medication review must include an interactive, person-to-person, or telehealth consultation performed by a pharmacist or other qualified provider unless the beneficiary is in a long-term care setting and may result in a recommended medication action plan.
(C) Quarterly targeted medication reviews with follow-up interventions when necessary.
(D) Standardized action plans and summaries that comply with requirements as specified by CMS for the standardized format.
(2)
(i) Have multiple chronic diseases, with three chronic diseases being the maximum number a Part D plan sponsor may require for targeted enrollment.
(ii) Are taking multiple Part D drugs, with eight Part D drugs being the maximum number of drugs a Part D plan sponsor may require for targeted enrollment.
(iii) Are likely to incur the following annual Part D drug costs:
(A) For 2011, costs for covered Part D drugs greater than or equal to $3,000.
(B) For 2012 and subsequent years, costs for covered Part D drugs in an amount greater than or equal to $3000 increased by the annual percentage specified in § 423.104(d)(5)(iv) of this part.
(3)
(4)
(5)
(i) Describe in its application how it takes into account the resources used and time required to implement the MTMP it chooses to adopt in establishing fees for pharmacists or others providing MTMP services for covered Part D drugs under a Part D plan.
(ii) Disclose to CMS upon request the amount of the management and dispensing fees and the portion paid for MTMP services to pharmacists and others upon request. Reports of these amounts are protected under the provisions of section 1927(b)(3)(D) of the Act.
(6)
(e)
(a)
(1) Require all pharmacies servicing long-term care facilities, as defined in § 423.100 to—
(i) Dispense solid oral doses of brand-name drugs, as defined in § 423.4, to enrollees in such facilities in no greater than 14-day increments at a time;
(ii) Permit the use of uniform dispensing techniques for Part D drugs dispensed to enrollees in long-term care facilities under paragraph (a)(1)(i) of this section as defined by each of the long-term care facilities in which such enrollees reside; and
(2) Collect and report information, in a form and manner specified by CMS, on the dispensing methodology used for each dispensing event described by paragraph (a)(1) of this section, and on the nature and quantity of unused brand and generic drugs, as defined in § 423.4, dispensed by the pharmacy to enrollees residing in a LTC facility. Reporting on unused drugs is waived for Part D sponsors for drugs dispensed by pharmacies that dispense both brand and generic drugs, as defined in § 423.4, in no greater than 7-day increments.
(b)
(1) Solid oral doses of antibiotics; or
(2) Solid oral doses that are dispensed in their original container as indicated in the Food and Drug Administration Prescribing Information or are customarily dispensed in their original packaging to assist patients with compliance (for example, oral contraceptives).
(c)
(d)
(e)
(f)
Part D contracts with 600 or more enrollees as of July of the prior year must contract with approved Medicare Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey vendors to conduct the Medicare CAHPS satisfaction survey of Part D plan enrollees in accordance with CMS specifications and submit the survey data to CMS.
(a)
(b) [Reserved]
(c)
(d)
(a)
(2) Except as provided in paragraph (a)(3) of this section, prescribers and dispensers that transmit, directly or through an intermediary, prescriptions and prescription-related information using electronic media must comply
(3)
(ii) After January 1, 2009, electronic transmission of prescriptions or prescription-related information by means of computer-generated facsimile is only permitted in instances of temporary/transient transmission failure and communication problems that would preclude the use of the NCPDP SCRIPT Standard adopted by this section.
(iii) Entities may use either HL7 messages or the NCPDP SCRIPT Standard to transmit prescriptions or prescription-related information internally when the sender and the recipient are part of the same legal entity. If an entity sends prescriptions outside the entity (for example, from an HMO to a non-HMO pharmacy), it must use the adopted NCPDP SCRIPT Standard or other applicable adopted standards. Any pharmacy within an entity must be able to receive electronic prescription transmittals for Medicare beneficiaries from outside the entity using the adopted NCPDP SCRIPT Standard. This exemption does not supersede any HIPAA requirement that may require the use of a HIPAA transaction standard within an organization.
(iv) Entities transmitting prescriptions or prescription-related information where the prescriber is required by law to issue a prescription for a patient to a non-prescribing provider (such as a nursing facility) that in turn forwards the prescription to a dispenser are exempt from the requirement to use the NCPDP SCRIPT Standard adopted by this section in transmitting such prescriptions or prescription-related information.
(4) In accordance with section 1860D-4(e)(5) of the Act, the standards under this paragraph (b) of this section supersede any State law or regulation that—
(i) Is contrary to the standards or restricts the ability to carry out Part D of Title XVIII of the Act; and
(ii) Pertains to the electronic transmission of medication history and of information on eligibility, benefits, and prescriptions with respect to covered Part D drugs under Part D of Title XVIII of the Act.
(b)
(i) Before April 1, 2009 the standards specified in paragraphs (b)(2)(i) and (b)(3) of this section.
(ii) On or after April 1, 2009, the standards specified in paragraphs (b)(2)(ii) and (b)(3) through (b)(6) of this section.
(2)
(A) Get message transaction.
(B) Status response transaction.
(C) Error response transaction.
(D) New prescription transaction.
(E) Prescription change request transaction.
(F) Prescription change response transaction.
(G) Refill prescription request transaction.
(H) Refill prescription response transaction.
(I) Verification transaction.
(J) Password change transaction.
(K) Cancel prescription request transaction.
(L) Cancel prescription response transaction.
(ii) The National Council for Prescription Drug Programs SCRIPT standard, Implementation Guide Version 10.6, approved November 12, 2008 (incorporated by reference in paragraph (c)(1)(v) of this section), or the National Council for Prescription Drug Programs Prescriber/Pharmacist Interface SCRIPT Standard, Implementation Guide, Version 8, Release 1 (Version 8.1), October 2005 (incorporated by reference in paragraph (c)(1)(i) of this section), to provide for the communication of a prescription or prescription-related information between prescribers and dispensers, for the following:
(A) Get message transaction.
(B) Status response transaction.
(C) Error response transaction.
(D) New prescription transaction.
(E) Prescription change request transaction.
(F) Prescription change response transaction.
(G) Refill prescription request transaction.
(H) Refill prescription response transaction.
(I) Verification transaction.
(J) Password change transaction.
(K) Cancel prescription request transaction.
(L) Cancel prescription response transaction.
(M) Fill status notification transaction.
(3)
(ii) The National Council for Prescription Drug Programs Telecommunication Standard Specification, Version 5, Release 1 (Version 5.1), September 1999, and equivalent NCPDP Batch Standard Batch Implementation Guide, Version 1, Release 1 (Version 1.1), January 2000 supporting Telecommunications Standard Implementation Guide, Version 5, Release 1 (Version 5.1), September 1999, for the NCPDP Data Record in the Detail Data Record (incorporated by reference in paragraph (c)(1)(iii) of this section), for transmitting eligibility inquiries and responses between dispensers and Part D sponsors.
(4)
(5)
(6)
(c)
(1) National Council for Prescription Drug Programs, Incorporated, 9240 E. Raintree Drive, Scottsdale, AZ 85260-7518; Telephone (480) 477-1000; and Facsimile (480) 767-1042 or
(i) National Council for Prescription Drug Programs Prescriber/Pharmacist Interface SCRIPT Standard, Implementation Guide, Version 8, Release 1, October 2005.
(ii) The National Council for Prescription Drug Programs Formulary and Benefits Standard, Implementation Guide, Version 1, Release 0, October 2005.
(iii) National Council for Prescription Drug Programs Telecommunication Standard Specification, Version 5, Release 1 (Version 5.1), September 1999 and equivalent National Council for Prescription Drug Programs (NCPDP) Batch Standard Batch Implementation Guide, Version 1, Release 1 (Version 1.1), January 2000 supporting Telecommunication Standard Implementation Guide, Version 5, Release 1 (Version 5.1) for the NCPDP Data Record in the Detail Data Record.
(iv) National Council for Prescription Drug Programs SCRIPT Standard, Implementation Guide, Version 5, Release 0, May 12, 2004, excluding the Prescription Fill Status Notification Transaction (and its three business cases; Prescription Fill Status Notification Transaction—Filled, Prescription Fill Status Notification Transaction—Not Filled, and Prescription Fill Status Notification Transaction—Partial Fill).
(v) National Council for Prescription Drug Programs SCRIPT Standard, Implementation Guide Version 10.6, approved November 12, 2008.
(2) Accredited Standards Committee, 7600 Leesburg Pike, Suite 430, Falls Church, VA 22043; Telephone (301) 970-4488; and Facsimile: (703) 970-4488 or
(i) Accredited Standards Committee (ASC) X12N 270/271-Health Care Eligibility Benefit Inquiry and Response, Version 4010, May 2000, Washington Publishing Company, 004010X092 and Addenda to Health Care Eligibility Benefit Inquiry and Response, Version 4010A1, October 2002, Washington Publishing Company, 004010X092A1.
(ii) [Reserved]
(a)
(b)
(c)
(a)
(1) The Part D sponsor is fully accredited (and periodically reaccredited) for the standards related to the applicable area under paragraph (b) of this section by a private, national accreditation organization approved by CMS; and
(2) The accreditation organization uses the standards approved by CMS for the purposes of assessing the Part D sponsor's compliance with Medicare requirements.
(b) Deemable requirements. The requirements relating to the following areas are deemable:
(1) Access to covered drugs, as provided under §§ 423.120 and 423.124.
(2) Drug utilization management programs, quality assurance measures and systems, and MTMPs as provided under § 423.153.
(3) Privacy, confidentiality, and accuracy of enrollee records, as provided under § 423.136.
(c)
(1) The date the accreditation organization is approved by CMS.
(2) The date the Part D sponsor is accredited by the accreditation organization.
(d)
(1) Submit to surveys by CMS to validate its accreditation organization's accreditation process; and
(2) Authorize its accreditation organization to release to CMS a copy of its most recent accreditation survey, together with any survey-related information that CMS may require (including corrective action plans and summaries of unmet CMS requirements).
(e)
(1) CMS determines, on the basis of its own investigation, that the Part D sponsor does not meet the Medicare requirements for which deemed status was granted.
(2) CMS withdraws its approval of the accreditation organization that accredited the Part D sponsor.
(3) The Part D sponsor fails to meet the requirements of paragraph (d) of this section.
(f)
(a)
(1) In accrediting Part D sponsors and Part D plans, it applies and enforces standards that are at least as stringent as Medicare requirements for the standard or standards in question.
(2) It complies with the application and reapplication procedures set forth in § 423.171.
(3) It ensures that—
(i) Any individual associated with it, who is also associated with an entity it accredits, does not influence the accreditation decision concerning that entity;
(ii) The majority of the membership of its governing body is not comprised of managed care organizations, Part D sponsors or their representatives; and
(iii) Its governing body has a broad and balanced representation of interests and acts without bias.
(b)
(i) Announces CMS's receipt of the accreditation organization's application for approval;
(ii) Describes the criteria CMS uses in evaluating the application; and
(iii) Provides at least a 30-day comment period.
(2)
(ii) If CMS grants the request, the final notice specifies the effective date and the term of the approval that may not exceed 6 years.
(c)
(1) Provide to CMS in written form and on a monthly basis all of the following:
(i) Copies of all accreditation surveys, together with any survey-related information that CMS may require including corrective action plans and summaries of unmet CMS requirements).
(ii) Notice of all accreditation decisions.
(iii) Notice of all complaints related to deemed Part D sponsors.
(iv) Information about any Part D sponsor against which the accrediting organization has taken remedial or adverse action, including revocation, withdrawal, or revision of the Part D sponsor's accreditation. (The accreditation organization must provide this information within 30 days of taking the remedial or adverse action.)
(v) Notice of any proposed changes in its accreditation standards or requirements or survey process. If the organization implements the changes before or without CMS approval, CMS may withdraw its approval of the accreditation organization.
(2) Within 30 days of a change in CMS requirements, submit the following to CMS—
(i) An acknowledgment of CMS's notification of the change.
(ii) A revised crosswalk reflecting the new requirements.
(iii) An explanation of how the accreditation organization plans to alter its standards to conform to CMS's new requirements, within the timeframes specified in the notification of change it receives from CMS.
(3) Permit its surveyors to serve as witnesses if CMS takes an adverse action based on accreditation findings.
(4) Within 3 days of identifying, in an accredited Part D sponsor, a deficiency that as determined by the accrediting organization poses immediate jeopardy to the plan's enrollees or to the general public, give CMS written notice of the deficiency.
(5) Within 10 days of CMS's notice of withdrawal of approval, give written notice of the withdrawal to all accredited Part D sponsors.
(6) On an annual basis, provide summary data specified by CMS that relate to the past year's accreditation activities and trends.
(d)
(1)
(i) CMS imposes new requirements or changes its survey process;
(ii) An accreditation organization proposes to adopt new standards or changes in its survey process; or
(iii) The term of an accreditation organization's approval expires.
(2)
(i) A 20 percent rate of disparity between certification by the accreditation organization and certification by CMS or its agent on standards that do not constitute immediate jeopardy to patient health and safety if unmet;
(ii) Any disparity between certification by the accreditation organization and certification by CMS or its agent on standards that constitute immediate jeopardy to patient health and safety if unmet; or
(iii) That, regardless of the rate of disparity, there are widespread or systematic problems in an organization's accreditation process that accreditation no longer provides assurance that the Medicare requirements are met or exceeded.
(3)
(i) Reviewing documents.
(ii) Auditing meetings concerning the accreditation process.
(iii) Evaluating survey results or the accreditation status decision-making process.
(iv) Interviewing the organization's staff.
(4)
(5)
(i) Deeming, based on accreditation, no longer guarantees that the Part D sponsor meets the requirements for offering qualified prescription drug coverage, and failure to meet those requirements may jeopardize the health or safety of Medicare enrollees and constitute a significant hazard to the public health; or
(ii) The accreditation organization has failed to meet its obligations under this section or under § 423.165 or § 423.171.
(6)
(a)
(1) The types of Part D plans and sponsors that it reviews as part of its accreditation process.
(2) A detailed comparison of the organization's accreditation requirements and standards with the Medicare requirements (for example, a crosswalk).
(3) Detailed information about the organization's survey process, including the following:
(i) Frequency of surveys and whether surveys are announced or unannounced.
(ii) Copies of survey forms, and guidelines and instructions to surveyors.
(iii) Descriptions of—
(A) The survey review process and the accreditation status decision making process;
(B) The procedures used to notify accredited Part D sponsors of deficiencies and to monitor the correction of those deficiencies; and
(C) The procedures used to enforce compliance with accreditation requirements.
(4) Detailed information about the individuals who perform surveys for the accreditation organization, including the—
(i) Size and composition of accreditation survey teams for each type of plan reviewed as part of the accreditation process;
(ii) Education and experience requirements surveyors must meet;
(iii) Content and frequency of the in-service training provided to survey personnel;
(iv) Evaluation systems used to monitor the performance of individual surveyors and survey teams; and
(v) Organization's policies and practice for the participation, in surveys or in the accreditation decision process by an individual who is professionally or financially affiliated with the entity being surveyed.
(5) A description of the organization's data management and analysis system for its surveys and accreditation decisions, including the kinds of reports, tables, and other displays generated by that system.
(6) A description of the organization's procedures for responding to and investigating complaints against accredited organizations, including policies and procedures regarding coordination of
(7) A description of the organization's policies and procedures for the withholding or removal of accreditation for failure to meet the accreditation organization's standards or requirements, and other actions the organization takes in response to noncompliance with its standards and requirements.
(8) A description of all types (for example, full or partial) and categories (for example, provisional, conditional, or temporary) of accreditation offered by the organization, the duration of each type and category of accreditation, and a statement identifying the types and categories that serve as a basis for accreditation if CMS approves the accreditation organization.
(9) A list of all currently accredited Part D sponsors and MA organizations and the type, category, and expiration date of the accreditation held by each of them.
(10) A list of all full and partial accreditation surveys scheduled to be performed by the accreditation organization as requested by CMS.
(11) The name and address of each person with an ownership or control interest in the accreditation organization.
(b)
(1) A written presentation that demonstrates its ability to furnish CMS with electronic data in CMS compatible format.
(2) A resource analysis that demonstrates that it's staffing, funding, and other resources are adequate to perform the required surveys and related activities.
(3) A statement acknowledging that, as a condition for approval, it agrees to comply with the ongoing responsibility requirements of § 423.168(c).
(c)
(d)
(e)
(1) States whether the request for approval is granted or denied;
(2) Gives the rationale for any denial; and
(3) Describes the reconsideration and reapplication procedures.
(f)
(g)
(h)
(i) Has revised its accreditation program to correct the deficiencies on which the denial was based.
(ii) Can demonstrate that the Part D sponsors that it has accredited meet or exceed applicable Medicare requirements; and
(iii) Resubmits the application in its entirety.
(2) An accreditation organization that has requested reconsideration of CMS' denial of its request for approval may not submit a new request until the reconsideration is administratively final.
This section sets forth the requirements and limitations on submission, review, negotiation and approval of competitive bids for prescription drug plans and MA-PD plans; the calculation of the national average bid amount; and the determination of enrollee premiums.
For the purposes of this subpart, the following definitions apply:
(a)
(b)
(2)
(3) CMS may decline to accept any or every bid submitted by a Part D sponsor or potential Part D sponsor.
(c)
(1)
(2)
(3)
(d)
(1)
(2)
(i) The actuarial value of the qualified prescription drug coverage to be offered under each plan for a Part D eligible individual with a national average risk profile for the factors described in § 423.329(b)(1) and the basis for the estimate.
(ii) The portion of the bid attributable to basic prescription drug coverage and the portion (if any) attributable to supplemental benefits.
(iii) The assumptions regarding reinsurance amounts payable under § 423.329(c) used in calculating the bid.
(iv) The assumptions regarding low-income cost-sharing payable under § 423.329(d) used in calculating the bid.
(v) The amount of administrative costs and return on investment or profit included in the bid.
(3)
(4)
(5)
(6)
(e)
(1)
(2)
(3)
(f)
(a)
(b)
(1)
(2)
(ii) If the design of the categories and classes within a formulary is consistent with the model guidelines (if any) established by the United States Pharmacopeia, the formulary categories and classes alone will not be found to discourage enrollment.
(iii) A plan that adopts the categories and classes discussed in paragraph (b)(2)(ii) of this section may nevertheless be found to discourage enrollment because it excludes specific drugs from the formulary.
(3)
(ii)
(4) CMS may decline to approve a bid if the Part D sponsor proposes significant increases in cost sharing or decreases in benefits offered under the plan.
(c)
(2)
(3)
(d)
(1)
(2)
(3)
(e)
(a)
(b)
(2) For purposes of calculating the monthly national average monthly bid amount for 2006, CMS assigns equal weighting to PDP sponsors (other than fallback entities) and assigns MA-PD plans included in the national average bid a weight based on prior enrollment (new MA-PD plans are assigned zero weight).
(c)
(2) CMS does not apply any geographic adjustments if CMS determines that price variations among PDP regions are negligible.
(3) CMS applies any geographic adjustment in a budget neutral manner so as to not result in a change in the aggregate payments that may have been made if CMS had not applied an adjustment.
(4) CMS does not apply any geographic adjustment until an appropriate methodology is developed.
(a)
(b)
(1) Numerator of which is 25.5 percent; and
(2) Denominator of which is as follows:
(i) 100 percent minus the percentage established in paragraph (b)(2)(ii) of this section.
(ii) The percentage established in this paragraph equals:
(A) The total reinsurance payments that CMS estimates will be paid under § 423.329(c) for the coverage year; divided by—
(B) The amount estimated under paragraph (b)(2)(ii)(A) of this section for the year plus total payments that CMS estimates will be paid to Part D plans that are attributable to the standardized bid amount during the year, taking into account amounts paid by both CMS and enrollees.
(c)
(1) Beneficiary premium percentage as specified in paragraph (b) of this section; and
(2) National average monthly bid amount (computed under § 423.279) for the month.
(d)
(1)
(2)
(3)
(i)
(A) An amount that CMS determines is actuarially sound for each uncovered month in the same continuous period of eligibility; or
(B) 1 percent of the base beneficiary premium (computed under paragraph (c) of this section) for each uncovered month in the period.
(ii)
(4)
(i)
(B) If an individual disagrees with SSA's determination that such individual is subject to the Part D—
(ii)
(e)
(f)
(a)
(1) Charge enrollees a consolidated monthly Part D premium equal to the sum of the Part D monthly premium for basic prescription drug coverage (if any) and the premium for supplemental coverage (if any and if the beneficiary has enrolled in such supplemental coverage).
(2) Permit payment of monthly Part D premiums (if any) under the timing of payments established in § 422.262(e) of this chapter; and
(3) Permit each enrollee, at the enrollee's option, to make payment of premiums (if any) under this part to the sponsor using any of the methods listed in § 422.262(f) of this chapter.
(4)
(b)
(c)
(2)
(d)
(2)
(3)
(e)
(f)
This subpart sets forth rules for the calculation and payment of CMS direct and reinsurance subsidies for Part D plans; the application of risk corridors and risk-sharing adjustments to payments; and retroactive adjustments and reconciliations to actual enrollment and interim payments. This subpart does not apply to fallback entities or fallback prescription drug plans.
For the purposes of this subpart, the following definitions apply—
(1) The subset of costs incurred under a Part D plan (not including administrative costs, but including dispensing fees) that are attributable to basic prescription drug coverage only and that are incurred and actually paid by the Part D sponsor to—
(i) A dispensing pharmacy or other dispensing provider (whether directly or through an intermediary contracting organization) under the Part D plan;
(ii) The parties listed in § 423.464(f)(1) of this part with which the Part D sponsor must coordinate benefits, including other Part D plans, as the result of any reconciliation process developed by CMS under § 423.464 of this part; or
(iii) An enrollee (or third party paying on behalf of the enrollee) to indemnify the enrollee when the reimbursement is associated with obtaining drugs under the Part D plan; and
(2) These costs must be based upon imposition of the maximum amount of copayments permitted under § 423.782 of this part. The costs for any Part D plan offering enhanced alternative coverage must be adjusted not only to exclude any costs attributable to benefits beyond basic prescription drug coverage, but also to exclude any prescription drug coverage costs determined to be attributable to increased utilization over standard prescription drug coverage as the result of the insurance effect of enhanced alternative coverage in accordance with CMS guidelines on actuarial valuation.
(1) The share of actual costs (as defined by § 423.100 of this part) actually paid by the Part D plan that is received as reimbursement by the pharmacy, or other dispensing entity, reimbursement paid to indemnify an enrollee when the reimbursement is associated with an enrollee obtaining covered Part D drugs under the Part D plan, or payments made by the Part D sponsor to other parties listed in § 423.464(f)(1) of this part with which the Part D sponsor must coordinate benefits, including other Part D plans, or as the result of any reconciliation process developed by CMS under § 423.464 of this part.
(2) Nominal cost-sharing paid by or on behalf of an enrollee which is associated with drugs that would otherwise be covered Part D drugs, as defined in § 423.100 of this part, but are instead paid for, with the exception of said nominal cost-sharing, by a patient assistance program providing assistance outside the Part D benefit, provided that documentation of such nominal cost-sharing has been submitted to the Part D plan consistent with the plan processes and instructions for the submission of such information.
(3) All amounts paid under the Part D plan by or on behalf of an enrollee (such as the deductible, coinsurance, cost sharing, or amounts between the initial coverage limit and the out-of-pocket threshold) in order to obtain Part D drugs that are covered under
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(2)
(a)
(b)
(1) This restriction does not limit OIG's authority to fulfill the Inspector General's responsibilities in accordance with applicable Federal law.
(2) This restriction does not limit CMS' ability to use data regarding drug claims in accordance with section 1848(m) of the Act.
(a)
(2)
(3)
(b)
(2)
(3)
(i) PDP sponsors to submit data regarding drug claims that can be linked at the individual level to Part A and Part B data in a form and manner similar to the process provided under § 422.310 of this chapter and other information as CMS determines necessary; and
(ii) MA organizations that offer MA-PD plans to submit data regarding drug claims that can be linked at the individual level to other data that the organizations are required to submit to CMS in a form and manner similar to the process provided under § 422.310 of this chapter and other information as CMS determines necessary.
(4)
(c)
(2)
(i) Payments during the coverage year. CMS establishes a payment method by which payments of amounts
under this section are made on a monthly basis during a year based on either estimated or incurred allowable reinsurance costs.
(ii)
(3)
(i) Bases the amount on CMS' estimate of the amount of the payments that are payable if the plan were an MA-PD plan described in section 1851(a)(2)(A)(i) of the Act; and
(ii) Takes into account the average reinsurance payments made under § 423.329(c) for populations of similar risk under MA-PD plans described in section 1851(a)(2)(A)(i) of the Act.
(d)
(2)
(i)
(ii)
(a)
(i) The allowable risk corridor costs for the Part D plan for the coverage year, reduced by—
(ii) The sum of—
(A) The total reinsurance payments made under § 423.329(c) to the Part D sponsor of the Part D plan for the year; and
(B) The total non-premium subsidy payments made under § 423.782 to the Part D sponsor of the Part D plan for the coverage year.
(2)
(A)
(
(
(B)
(
(
(C)
(
(
(D)
(
(
(ii)
(
(
(
(B)
(1) 2006 and 2007, 5.0 percent;
(2) 2008 through 2011, 10 percent
(3) 2012 and subsequent years, a percentage CMS establishes that is greater than the percent established for the
(iii)
(3)
(b)
(2)
(ii)
(A) 50 percent (or, for 2006 and 2007, 75 percent or 90 percent if the conditions specified in paragraph (b)(2)(iii) of this section are met for the year) of the difference between the second threshold upper limit and the first threshold upper limit; and
(B) 80 percent of the difference between the adjusted allowable risk corridor costs and the second threshold upper limit of the risk corridor.
(iii)
(A) At least 60 percent of Part D plans to which this paragraph applies have adjusted allowable risk corridor costs for the Part D plan for the year that are more than the first threshold upper limit of the risk corridor for the Part D plan for the year; and
(B) Such plans represent at least 60 percent of Part D eligible individuals enrolled in any Part D plan.
(3)
(ii)
(A) 50 percent (or, for 2006 and 2007, 75 percent) of the difference between the first threshold lower limit and the second threshold lower limit; and
(B) 80 percent of the difference between the second threshold upper limit of the risk corridor and the adjusted allowable risk corridor costs.
(c)
(1)
(2)
(d)
(a)
(b)
(c)
(1)
(2)
(d)
(1)
(2)
(a) CMS may reopen and revise an initial or reconsidered final payment determination (including a determination on the final amount of direct subsidy described in § 423.329(a)(1), final reinsurance payments described in § 423.329(c), the final amount of the low income subsidy described in § 423.329(d), or final risk corridor payments as described in § 423.336)—
(1) For any reason, within 12 months from the date of the notice of the final determination to the Part D sponsor
(2) After that 12-month period, but within 4 years after the date of the notice of the initial or reconsidered determination to the Part D sponsor, upon establishment of good cause for reopening; or
(3) At any time, in instances of fraud or similar fault of the Part D sponsor or any subcontractor of the Part D sponsor.
(b) For purposes of this section, CMS will find good cause if—
(1) New and material evidence that was not readily available at the time the final determination was made is furnished;
(2) A clerical error in the computation of payments was made; or
(3) The evidence that was considered in making the determination clearly shows on its face that an error was made.
(c) For purposes of this section, CMS will not find good cause if the only reason for reopening is a change of legal interpretation or administrative ruling upon which the final determination was made.
(d) A decision not to reopen under this section is final and is not subject to review.
(a)
(i) The reconciled health status risk adjustment of the direct subsidy as provided in § 423.343(b).
(ii) The reconciled reinsurance payments under § 423.343(c).
(iii) The reconciled final payments made for low-income cost sharing subsidies provided in § 423.343(d); or
(iv) Final risk-sharing payments made under § 423.336).
(2)
(b)
(i) For risk adjustment, the date of the final reconciled payment under § 423.343(b) of this subpart.
(ii) For reinsurance, the date of the final reconciled payment under § 423.343(c) of this subpart; for low-income cost sharing subsidies, the date of the final reconciled payment under § 423.343(d) of this subpart.
(iii) For risk-sharing payments, the date of the final payments under § 423.336 of this subpart.
(2)
(3)
(4)
(5)
(c)
(1)
(2)
(3)
(ii) The hearing are conducted by a CMS hearing officer who neither receives testimony nor accepts any new evidence that was not presented with the reconsideration request. The CMS hearing officer is limited to the review of the record that was before CMS when CMS made both its initial and reconsideration determinations.
(iii) If CMS did not issue a written reconsideration decision, the hearing officer may request, but not require, a written statement from CMS or its contractors explaining CMS' determination, or CMS or its contractors may, on their own, submit the written statement to the hearing officer. Failure of CMS to submit a written statement does not result in any adverse findings against CMS and may not in any way be taken into account by the hearing officer in reaching a decision.
(4)
(5)
(d)
(2) The Administrator may review the hearing officer's decision, any written documents submitted to CMS or to the hearing officer, as well as any other information included in the record of the hearing officer's decision and determine whether to uphold, reverse or modify the hearing officer's decision.
(3) The Administrator's determination is final and binding.
(a)
(1)
(2)
(b)
(c)
(a)
(b)
(1)
(2)
(i) The State imposed material requirements,
procedures, or standards (other than solvency requirements) not generally applied by the State to other entities engaged in a substantially similar business; or
(ii) The State required, as a condition of licensure, that the organization offer any product or plan other than a prescription drug plan.
(3)
(i) The solvency requirements are different from the solvency standards CMS establishes in accordance with § 423.420; or
(ii) CMS determines that the State imposed, as a condition of licensing, any documentation or information requirements relating to solvency that are different from the standards CMS establishes in accordance with § 423.420.
(4)
(c)
(d)
(e)
(1)
(2)
(3)
(a)
(b)
(c)
(d)
(a)
(b)
The fact that a Part D sponsor is State licensed or has a waiver application approved under § 423.410 or § 423.415 does not deem the sponsor to meet other requirements imposed under this part for a Part D sponsor.
(a)
(b)
(2)
This section sets forth the application of Part D rules to Part C plans; establishes waivers for MA-PD plans, employer-sponsored group prescription drug plans, cost plans, and PACE organizations; and establishes requirements for coordination of benefits with State Pharmaceutical Assistance Programs and other providers of prescription drug coverage.
For purposes of this part, the following definitions apply—
(a)
(b)
(1)
(2)
seeking to offer a MA-PD plan may request from CMS in writing—
(i) A waiver of those requirements under this part otherwise applicable to the MA-PD plan or MA organization under paragraph (a) of this section that are duplicative of, or that are in conflict with, provisions otherwise applicable to the MA-PD plan, proposed MA-PD plan, or a MA organization under Part C of Medicare.
(ii) A waiver of a requirement under this part otherwise applicable to the MA-PD plan or MA organization under paragraph (a) of this section, if such waiver improves coordination of benefits provided under Part C of Medicare with benefits under this Part.
(c)
(2)
(d)
(1)
(2)
(i) A waiver of those requirements under this part otherwise applicable to cost plans or PACE organizations that are duplicative of, or that are in conflict with, provisions otherwise applicable to cost plans or PACE organizations.
(ii) A waiver of a requirement under this part otherwise applicable to cost plans or PACE organizations, if such waiver improves coordination of benefits provided by the cost plan under section 1876 of the Act, or by the PACE organization under sections 1894 and 1934 of the Act, with the benefits under Part D.
(a)
(b)
(a)
(1) Payment of premiums and coverage; and
(2) Payment for supplemental prescription drug benefits as described in § 423.104(f)(1)(ii)(including payment to a Part D plan on a lump sum per capita basis) for Part D eligible individuals enrolled in the Part D plan and the SPAP or entity providing other prescription drug coverage.
(3) Retroactive claims adjustments, underpayment reimbursements, and overpayment recoveries as described in paragraph (g) of this section and § 423.466(a) of this subpart.
(b)
(c)
(d)
(e)
(i) Provides financial assistance for the purchase or provision of supplemental prescription drug coverage or benefits on behalf of Part D eligible individuals;
(ii) Provides assistance to Part D eligible individuals in all Part D plans without discriminating based upon the Part D plan in which an individual enrolls;
(iii) Meets the benefit coordination requirements specified in this subpart;
(iv) Does not follow or adopt rules that change or affect the primary payer status of a Part D plan.
The definition of SPAP excludes State Medicaid programs, section 1115 demonstration programs, and any other program where program funding is from Federal grants, awards, contracts, entitlement programs, or other Federal sources of funding; and
(v) Provides supplemental drug coverage to individuals based on financial need, age, or medical condition, and not based on current or former employment status.
(vi) Does not engage in midyear plan or noncalendar year plan enrollment changes on behalf of a substantial number of its members when authorized to do so on the beneficiary's behalf.
(2)
(3)
(f)
(i)
(ii) Group health plans.
(iii)
(iv)
(v)
(vi)
(vii)
(viii) Other Part D plans.
(ix)
(2)
(A) Include the enrollee's incurred costs (as defined in § 423.100); and
(B) Exclude expenditures for covered Part D drugs made by insurance or otherwise, a group health plan, or other third party payment arrangements, including expenditures by plans offering other prescription drug coverage.
(ii) A Part D enrollee must disclose all these expenditures to a Part D plan in accordance with requirements under § 423.32(b)(ii).
(3)
(4)
(5)
(6)
(g)
(1) Adjustments involving payments by other plans and programs providing prescription drug coverage have been made.
(2) Reimbursements for excess cost-sharing and premiums for low-income subsidy eligible individuals have been processed in accordance with the requirements in § 423.800(c).
(3) Recoveries of erroneous payments for enrollees as specified in § 423.464(f)(4) have been sought.
(h)
(a)
(b)
This subpart sets forth application procedures and contracts with Part D
For purposes of this subpart, the following definitions apply:
(1) Sale, exchange, or lease of property.
(2) Loan of money or extension of credit.
(3) Goods, services, or facilities furnished for a monetary consideration, including management services, but not including—
(i) Salaries paid to employees for services performed in the normal course of their employment; or
(ii) Health services furnished to the Part D plan sponsor's enrollees by pharmacies and other providers, by Part D plan sponsor staff, medical groups, or independent practice associations, or by any combination of those entities.
(1) Any director, officer, partner, or employee responsible for management or administration of a Part D plan sponsor.
(2) Any person who is directly or indirectly the beneficial owner of more than 5 percent of the organization's equity; or the beneficial owner of a mortgage, deed of trust, note, or other interest secured by and valuing more than 5 percent of the organization.
(3) In the case of a PDP sponsor organized as a nonprofit corporation, an incorporator or member of the corporation under applicable State corporation law.
(4) Any entity in which a person specified in paragraphs (1), (2), or (3) of this definition—
(i) Is an officer, director, or partner; or
(ii) Has the kind of interest described in paragraphs (1), (2), or (3) of this definition.
(5) Any person that directly or indirectly controls, is controlled by, or is under common control with the Part D plan sponsor.
(6) Any spouse, child, or parent of an individual specified in paragraphs (1), (2), or (3) of this definition.
(1) Performs some of the Part D plan sponsor's management functions under contract or delegation;
(2) Furnishes services to Medicare enrollees under an oral or written agreement; or
(3) Leases real property or sells materials to the Part D plan sponsor at a cost of more than $2,500 during a contract period.
(a)
(b)
(2) Submitting a Notice of Intent to Apply does not bind that organization to submit an application for the applicable contract year.
(3) An organization's decision not to submit an application after submitting an Notice of Intent to Apply will not form the basis of any action taken against the organization by CMS.
(c)
(i) Documentation of appropriate State licensure or State certification that the entity is able to offer health insurance or health benefits coverage that meets State-specified standards as specified in subpart I of this part; or
(ii) A Federal waiver as specified in subpart I of this part.
(2) The authorized individual must describe thoroughly how the entity is qualified to meet the all requirements described in this part.
(d)
(2) A CMS determination that an entity is qualified to act as a Part D plan sponsor is distinct from the bid negotiations that occur under subpart F of part 423 and such negotiations are not subject to the appeals provisions included in subpart N of this part.
(e)
(a)
(2) After evaluating all relevant information, CMS determines whether the application meets all the requirements described in this part.
(b)
(2) In the absence of 14 months of performance history, CMS may deny an application based on a lack of information available to determine an applicant's capacity to comply with the requirements of the Part D program.
(c)
(1)
(2)
(ii) Within 10 days from the date of the notice, the applicant may respond in writing to the issues or other matters that were the basis for CMS's preliminary finding and may revise its application to remedy any defects CMS identified.
(iii) If CMS does not receive a revised application within 10 days from the date of the notice, or if after timely submission of a revised application, CMS still finds the applicant does not appear qualified to contract as a Part D plan sponsor or has not provided enough information to allow CMS to evaluate the application, CMS denies the application.
(3) Denial of application. If CMS denies the application, it gives written notice to the applicant indicating—
(i) That the applicant is not qualified to contract as a Part D sponsor under Part D of title XVIII of the Act;
(ii) The reasons why the applicant does is not so qualified; and
(iii) The applicant's right to request a hearing in accordance with the procedures specified in subpart N of this part.
(a)
(b)
(1) Complete an application as described in § 423.502 demonstrating that the entity has the capability to meet the requirements of this part, including those listed in § 423.505.
(2) Be organized and licensed under State law as a risk bearing entity eligible to offer health insurance or health benefits coverage in each State in which it offers a Part D plan, or have secured a Federal waiver, as described in subpart I of this part. (Fallback entity applicants need not be licensed as risk-bearing entities, nor are they required to obtain State licensure demonstrating that the applicant is eligible to offer health insurance or health benefits coverage in each State in which it applies to operate.)
(3) Meet the minimum enrollment requirements of § 423.512(a) unless waived under § 423.512(b).
(4) Have administrative and management arrangements satisfactory to CMS, as demonstrated by at least the following:
(i) A policy making body that exercises oversight and control over the Part D plan sponsor's policies and personnel to ensure that management actions are in the best interest of the organization and its enrollees.
(ii) Personnel and systems sufficient for the Part D plan sponsor to organize, implement, control, and evaluate financial and marketing activities, the furnishing of prescription drug services, the quality assurance, medical therapy management, and drug and or utilization management programs, and the administrative and management aspects of the organization.
(iii) At a minimum, an executive manager whose appointment and removal are under the control of the policy making body.
(iv) A fidelity bond or bonds, procured and maintained by the Part D sponsor, in an amount fixed by its policymaking body but not less than $100,000 per individual, covering each officer and employee entrusted with the handling of its funds. The bond may have reasonable deductibles, based
(v) Insurance policies or other arrangements, secured and maintained by the Part D plan sponsor and approved by CMS to insure the Part D plan sponsor against losses arising from professional liability claims, fire, theft, fraud, embezzlement, and other casualty risks.
(vi) Adopt and implement an effective compliance program, which must include measures that prevent, detect, and correct noncompliance with CMS' program requirements as well as measures that prevent, detect, and correct fraud, waste, and abuse. The compliance program must, at a minimum, include the following core requirements:
(A) Written policies, procedures, and standards of conduct that—
(
(
(
(
(
(
(
(B) The designation of a compliance officer and a compliance committee who report directly and are accountable to the Part D plan sponsor's chief executive or other senior management.
(
(
(
(C)(
(
(
(D) Establishment and implementation of effective lines of communication, ensuring confidentiality, between the compliance officer, members of the compliance committee, the Part D plan sponsor's employees, managers and governing body, and the Part D plan sponsor's first tier, downstream, and related entities. Such lines of communication must be accessible to all and allow compliance issues to be reported including a method for anonymous and confidential good faith reporting of potential compliance issues as they are identified.
(E) Well-publicized disciplinary standards through the implementation of procedures which encourage good
(
(
(
(F) Establishment and implementation of an effective system for routine monitoring and identification of compliance risks. The system should include internal monitoring and audits and, as appropriate, external audits, to evaluate the Part D plan sponsors, including first tier entities', compliance with CMS requirements and the overall effectiveness of the compliance program.
(G) Establishment and implementation of procedures and a system for promptly responding to compliance issues as they are raised, investigating potential compliance problems as identified in the course of self-evaluations and audits, correcting such problems promptly and thoroughly to reduce the potential for recurrence, and ensure ongoing compliance with CMS requirements.
(
(
(
(5) Not have non-renewed a contract under § 423.507 within the past 2 years unless—
(i) During the 6-month period, beginning on the date the entity notified CMS of the intention to non-renew the most recent previous contract, there was a change in the statute or regulations that had the effect of increasing Part D sponsor payments in the payment area or areas at issue; or
(ii) CMS has otherwise determined that circumstances warrant special consideration.
(6) Not have terminated a contract by mutual consent under which, as a condition of the consent, the Part D plan sponsor agreed that it was not eligible to apply for new contracts or service area expansions for a period up to 2 years per § 423.508(e) of this subpart.
(7) For a full risk or limited risk PDP applicant, not submitted a bid or offered a fallback prescription drug plan in accordance with the following rules.
(i) CMS does not contract with a potential PDP sponsor for the offering of a full risk or limited risk prescription drug plan in a PDP region for a year if the applicant—
(A) Submitted a bid under § 423.863 for the year (as the first year of a contract period under § 423.863 to offer a fallback prescription drug plan in any PDP region;
(B) Offers a fallback prescription drug plan in any PDP region during the year; or
(C) Offered a fallback prescription drug plan in that PDP region during the previous year.
(ii)
(c)
(d)
(2) Each contract under this section must provide that CMS, or any person or organization designated by CMS, has the right to—
(i) Inspect or otherwise evaluate the quality, appropriateness, and timeliness of services performed under the Part D plan sponsor's contract;
(ii) Inspect or otherwise evaluate the facilities of the Part D sponsor when there is reasonable evidence of some need for the inspection; and
(iii) Audit and inspect any books, contracts, and records of the Part D plan sponsor that pertain to—
(A) The ability of the organization or its first tier or downstream providers to bear the risk of potential financial losses; or
(B) Services performed or determinations of amounts payable under the contract.
(e)
(1) The contract could be amended to exclude any State-licensed entity, or a Part D plan specified by CMS; and
(2) A separate contract for any excluded plan or entity must be deemed to be in place when a request is made.
(a)
(b)
(1) All the applicable requirements and conditions set forth in this part and in general instructions.
(2) Accept new enrollments, make enrollments effective, process voluntary disenrollments, and limit involuntary disenrollments, as provided in subpart B of this part.
(3) Comply with the prohibition in § 423.34(a) on discrimination in beneficiary enrollment.
(4) Provide the basic prescription drug coverage as defined under § 423.100 and, to the extent applicable, supplemental benefits as defined in § 423.100. (Fallback entities may offer only standard prescription drug coverage as specified in § 423.855.)
(5) Disclose information to beneficiaries in the manner and the form specified by CMS under § 423.128.
(6) Operate quality assurance, cost and utilization management, medication therapy management, and support e-prescribing as required under subpart D of this part.
(7) Comply with all requirements in subpart M of this part governing coverage determinations, grievances, and appeals, and formulary exceptions.
(8) Comply with the disclosure and reporting requirements in § 423.505(f), § 423.514, and the requirements in § 423.329(b) of this part for submitting current and prior drug claims and related information to CMS for its use in risk adjustment calculations and for the purposes of implementing § 423.505(f), (l), and (m) and § 423.329(b) of this part.
(9) Provide CMS with the information CMS determines is necessary to carry out payment provisions in subpart G of this part (or for fallback entities, the information necessary to carry out the payment provisions in subpart Q of this part).
(10) Allow CMS to inspect and audit any books and records of a Part D plan sponsor and its delegated first tier, downstream and related entities, that pertain to the information regarding costs provided to CMS under paragraph (b)(9) of this section, or, if a fallback entity, the information submitted under subpart Q of this part.
(11) Be paid under the contract in accordance with the payment rules in subpart G of this part, or, if a fallback entity, in accordance with the payment rules of subpart Q of this part.
(12) Except for fallback entities, submit a future year's bid, including all required information on premiums, benefits, and cost-sharing, by any applicable due date, as provided in subpart F so that CMS and the Part D plan sponsor may conduct negotiations regarding the terms and conditions of the proposed bid and benefit plan renewal.
(13) Permit CMS to determine that it is not qualified to renew its contract or that its contract may be terminated in accordance with this subpart and subpart N of this part. (Subpart N applies to fallback entities only to the extent a fallback contract is terminated.)
(14) Comply with the confidentiality and enrollee record accuracy specified in § 423.136.
(15) Comply with State law and preemption by Federal law requirements described in subpart I of this part.
(16) Comply with the coordination requirements with SPAPs and plans that provide other prescription drug coverage as described in subpart J of this part.
(17) Provide benefits by means of point of service systems to adjudicate in a drug claims in a timely and efficient manner in compliance with CMS standards, except when necessary to provide access in underserved areas, I/T/U pharmacies (as defined in § 423.100), and long-term care pharmacies (as defined in § 423.100).
(18) To agree to have a standard contract with reasonable and relevant terms and conditions of participation whereby any willing pharmacy may access the standard contract and participate as a network pharmacy.
(19) Effective contract year 2010, include the prompt payment provisions described in § 423.520.
(20) Effective contract year 2010, provide that pharmacies located in, or having a contract with, a long-term care facility (as defined in § 423.100) must have not less than 30 days, nor more than 90 days, to submit to the Part D sponsor claims for reimbursement under the plan.
(21) Effective contract year 2009, update any prescription drug pricing standard for reimbursement of network pharmacies based on the cost of a drug used by the Part D sponsor on—
(i) January 1 of each contract year; and
(ii) Not less frequently than once every 7 days after the date in paragraph (b)(21)(i) of this section.
(22) Address complaints received by CMS against the Part D sponsor by—
(i) Addressing and resolving complaints in the CMS complaint tracking system.
(ii) Displaying a link to the electronic complaint form on the Medicare.gov Internet Web site on the Part D plan's main Web page.
(23) Maintain a fiscally sound operation by at least maintaining a positive net worth (total assets exceed total liabilities).
(c)
(d)
(1) Are sufficient to do the following:
(i) Accommodate periodic auditing of the financial records (including data related to Medicare utilization, costs, and computation of the bid of part D plan sponsors).
(ii) Enable CMS to inspect or otherwise evaluate the quality, appropriateness, and timeliness of services performed under the contract and the facilities of the organization.
(iii) Enable CMS to audit and inspect any books and records of the Part D plan sponsor that pertain to the ability of the organization to bear the risk of potential financial losses, or to services performed or determinations of amounts payable under the contract.
(iv) Except for fallback entities, properly reflect all direct and indirect costs claimed to have been incurred and used in the preparation of the Part D plan sponsor's bid and necessary for the calculation of gross covered prescription drug costs, allowable reinsurance costs, and allowable risk corridor costs (as defined in § 423.308).
(v) Except for fallback entities, establish the basis for the components, assumptions, and analysis used by the
(2) Include records of the following:
(i) Ownership and operation of the Part D sponsor's financial, medical, and other record keeping systems.
(ii) Financial statements for the current contract period and 10 prior periods.
(iii) Federal income tax or informational returns for the current contract period and 10 prior periods.
(iv) Asset acquisition, lease, sale, or other actions.
(v) Agreements, contracts, and subcontracts.
(vi) Franchise, marketing, and management agreements.
(vii) Matters pertaining to costs of operations.
(viii) Amounts of income received by source and payment.
(ix) Cash flow statements.
(x) Any financial reports filed with other Federal programs or State authorities.
(xi) All prescription drug claims for the current contract period and 10 prior periods.
(xii) All price concessions (including concessions offered by manufacturers) for the current contract period and 10 prior periods accounted for separately from other administrative fees.
(e)
(1) HHS, the Comptroller General, or their designee may evaluate, through audit, inspection, or other means—
(i) The quality, appropriateness, and timeliness of services furnished to Medicare enrollees under the contract;
(ii) Compliance with CMS requirements for maintaining the privacy and security of protected health information and other personally identifiable information of Medicare enrollees;
(iii) The facilities of the Part D sponsor to include computer and other electronic systems; and
(iv) The enrollment and disenrollment records for the current contract period and 10 prior periods.
(2) The Part D plan sponsor agrees to make available to HHS, the Comptroller General, or their designees, for the purposes specified in paragraph (d) of this section, its premises, physical facilities and equipment, records relating to its Medicare enrollees, and any additional relevant information that CMS may require. The Part D plan sponsor also agrees to make available any books, contracts, records and documentation of the Part D plan sponsor, first tier, downstream and related entity(s), or its transferee that pertain to any aspect of services performed, reconciliation of benefit liabilities, and determination of amounts payable under the contract, or as the Secretary may deem necessary to enforce the contract.
(3) The Part D plan sponsor agrees to make available, for the purposes specified in paragraph (d) of this section, its premises, physical facilities and equipment, records relating to its Medicare enrollees, and any additional relevant information that CMS may require.
(4) HHS, the Comptroller General, or their designee's right to inspect, evaluate, and audit extends through 10 years from the end of the final contract period or completion of audit, whichever is later unless—
(i) CMS determines there is a special need to retain a particular record or group of records for a longer period and notifies the Part D plan sponsor at least 30 days before the normal disposition date;
(ii) There is a termination, dispute, or allegation of fraud or similar fault by the Part D plan sponsor, in which case the retention may be extended to 6 years from the date of any resulting final resolution of the termination, dispute, or fraud or similar fault; or
(iii) CMS determines that there is a reasonable possibility of fraud or similar fault, in which case CMS may inspect, evaluate, and audit the Part D plan sponsor at any time.
(f)
(1) Certified financial information that must include the following:
(i) Information as CMS may require demonstrating that the organization has a fiscally sound operation.
(ii) Information as CMS may require pertaining to the disclosure of ownership and control of the Part D plan sponsor.
(2) All information to CMS that is necessary for CMS to administer and evaluate the program and to simultaneously establish and facilitate a process for current and prospective beneficiaries to exercise choice in obtaining prescription drug coverage. This information includes, but is not limited to:
(i) The benefits covered under a Part D plan.
(ii) The Part D plan monthly basic beneficiary premium and Part D plan monthly supplemental beneficiary premium, if any, for the plan. Fallback entities submit the monthly beneficiary premium for standard prescription drug coverage.
(iii) The service area of each plan.
(iv) Plan quality and performance indicators for the benefits under the plan including—
(A) Disenrollment rates for Medicare enrollees electing to receive benefits through the plan for the previous 2 years;
(B) Information on Medicare enrollee satisfaction;
(C) The recent records regarding compliance of the plan with requirements of this part, as determined by CMS; and
(D) Other information determined by CMS to be necessary to assist beneficiaries in making an informed choice regarding Part D plans.
(v) Information about beneficiary appeals and their disposition, and formulary exceptions.
(vi) Information regarding all formal actions, reviews, findings, or other similar actions by States, other regulatory bodies, or any other certifying or accrediting organization.
(vii) Information on other matters that CMS may require, including, but not limited to, program monitoring and oversight, performance measures, quality assessment, research and evaluation, CMS outreach activities, payment-related oversight*, and fraud, abuse, and waste*, as specified in CMS guidelines.
(viii) Any other information deemed necessary to CMS for the administration or evaluation of the Medicare program.
(3) All data elements included in all its drug claims for purposes deemed necessary and appropriate by the Secretary, including, but not limited to the following:
(i) Reporting to Congress and the public on overall statistics associated with the operation of the Medicare prescription drug program.
(ii) Conducting evaluations of the overall Medicare program, including the interaction between prescription drug coverage under Part D of Title XVIII of the Social Security Act and the services and utilization under Parts A, B, and C of title XVIII of the Act and under titles XIX and XXI of the Act, as well as other studies addressing public health questions.
(iii) Making legislative proposals to the Congress regarding Federal health care programs and related programs.
(iv) Conducting demonstration and pilot projects and making recommendations for improving the economy, efficiency, or effectiveness of the Medicare program.
(v) Supporting care coordination and disease management programs,
(vi) Supporting quality improvement and performance measurement activities, and;
(vii) Populating personal health care records.
(4) To its enrollees, all informational requirements under § 423.128 and, upon an enrollee's request, the financial disclosure information required under § 423.128(c)(4).
(g)
(1) Each Part D plan sponsor must adopt and maintain arrangements satisfactory to CMS to protect its enrollees from incurring liability for payment of any fees that are the legal obligation of the Part D sponsor. To meet this requirement, the Part D plan sponsor must—
(i) Ensure that all contractual or other written arrangements prohibit the sponsor's contracting agents from holding any beneficiary enrollee liable for payment of any such fees; and
(ii) Indemnify the beneficiary enrollee for payment of any fees that are
(2) In meeting the requirements of this paragraph, other than the provider contract requirements specified in paragraph (g)(1)(i) of this section, the Part D plan sponsor may use—
(i) Contractual arrangements;
(ii) Insurance acceptable to CMS;
(iii) Financial reserves acceptable to CMS; or
(iv) Any other arrangement acceptable to CMS.
(h)
(1) Federal laws and regulations designed to prevent fraud, waste, and abuse, including, but not limited to applicable provisions of Federal criminal law, the False Claims Act (31 U.S.C. 3729 et seq.), and the anti-kickback statute (section 1128B(b) of the Act).
(2) HIPAA Administrative Simplification rules at 45 CFR parts 160, 162, and 164.
(i)
(2) The Part D sponsor agrees to require all first tier, downstream, and related entities to agree that—
(i) HHS, the Comptroller General, or their designees have the right to audit, evaluate, and inspect any books, contracts, computer or other electronic systems, including medical records and documentation of the first tier, downstream, and related entities related to CMS' contract with the Part D sponsor.
(ii) HHS', the Comptroller General's, or their designee's right to inspect, evaluate, and audit any pertinent information for any particular contract period exists through 10 years from the final date of the contract period or from the date of completion of any audit, whichever is later.
(3) All contracts or written arrangements between Part D sponsors and first tier, downstream, and related entities, must contain the following:
(i) Enrollee protection provisions that provide, consistent with paragraph (g)(1) of this section, arrangements that prohibit pharmacies or other providers from holding an enrollee liable for payment of any fees that are the obligation of the Part D plan sponsor.
(ii) Accountability provisions that indicate that the Part D sponsor may delegate activities or functions to a first tier, downstream, or related entity only in a manner consistent with requirements set forth at paragraph (i)(4) of this section.
(iii) A provision requiring that any services or other activity performed by a first tier, downstream, and related entity in accordance with a contract or written agreement are consistent and comply with the Part D sponsor's contractual obligations.
(iv) A provision requiring the Part D sponsor's first tier, downstream, and related entities to produce upon request by CMS, or its designees, any books, contracts, records, including medical records and documentation of the Part D sponsor, relating to the Part D program, to either the sponsor to provide to CMS, or directly to CMS or its designees.
(v) All contracts or written arrangements must specify that first tier, downstream, and related entities must comply with all applicable Federal laws, regulations, and CMS instructions.
(vi) A provision requiring prompt payment of clean claims by the Part D sponsor, consistent with § 423.520.
(vii) A provision that establishes timeframes, consistent with § 423.505(b)(20), for long-term care pharmacies to submit claims to the Part D sponsor for reimbursement under the plan.
(viii) If applicable, a provision—
(A) Establishing regular updates of any prescription drug pricing standard used by the Part D sponsor consistent with § 423.505(b)(21); and
(B) Indicating the source used by the Part D sponsor for making any such pricing updates.
(4) If any of the Part D plan sponsors' activities or responsibilities under its contract with CMS is delegated to other parties, the following requirements apply to any first tier, downstream, and related entity:
(i) Written arrangements must specify delegated activities and reporting responsibilities.
(ii) Written arrangements must either provide for revocation of the delegation activities and reporting responsibilities described in paragraph (i)(4)(i) of this section or specify other remedies in instances when CMS or the Part D plan sponsor determine that the parties have not performed satisfactorily.
(iii) Written arrangements must specify that the Part D plan sponsor on an ongoing basis monitors the performance of the parties.
(iv) All contracts or written arrangements must specify that the related entity, contractor, or subcontractor must comply with all applicable Federal laws, regulations, and CMS instructions.
(5) If the Part D plan sponsor delegates selection of its prescription drug providers to another organization, the Part D sponsor's written arrangements with that organization must state that the CMS-contracting Part D plan sponsor retains the right to approve, suspend, or terminate any such arrangement.
(j)
(k)
(2)
(3)
(4)
(5)
(6)
(l) CMS may use the information collected under paragraph (f)(3) of this section. Any restriction set forth by § 423.322(b) of this part must not be construed to limit the Secretary's authority to use the information collected under paragraph (f)(3).
(m)(1) CMS may release the minimum data necessary for a given purpose from the data collected under paragraph (f)(3) of this section to Federal executive branch agencies, States, and external entities in accordance with the following:
(i) Applicable Federal laws.
(ii) CMS data sharing procedures.
(iii) Subject, in certain cases, to encryption of certain identifiers and aggregation of cost data to protect beneficiary confidentiality and commercially sensitive data of Part D sponsors, in accordance with all of the following principles:
(A) Subject to the restrictions in this paragraph, all elements on the claim are available to HHS.
(B) Cost data elements on the claim generally are aggregated for releases to other executive branch agencies, States, and external entities.
(C) Plan identifier elements on the claim are encrypted or unavailable for release to external entities with the exception of HHS grantees that CMS determines meet all of the following criteria:
(
(
(
(
(D) Beneficiary, pharmacy, and prescriber identifier elements on the claim generally are encrypted for releases to external entities, except in limited circumstances, such as to link to another data set.
(iv) For purposes of paragraph (m)(1)(iii) of this section, States and executive-branch Federal agencies are not considered to be external entities.
(2) Any restriction set forth by § 423.322(b) of this part must not be construed to limit the Secretary's authority to release the information collected under paragraph (f)(3) of this section.
(3) CMS shall make available to Congressional support agencies (the Congressional Budget Office, the Government Accountability Office, the Medicare Payment Advisory Commission, and the Congressional Research Service when it is acting on behalf of a Congressional committee in accordance with 2 U.S.C. 166(d)(1)) all information collected under paragraph (f)(3) of this section for the purposes of conducting congressional oversight, monitoring, making recommendations, and analysis of the Medicare program.
(n)(1) CMS may determine that a Part D plan sponsor is out of compliance with a Part D requirement when the sponsor fails to meet performance standards articulated in the Part D statutes, regulations, or guidance.
(2) If CMS has not already articulated a measure for determining noncompliance, CMS may determine that a Part D sponsor is out of compliance when its performance in fulfilling Part D requirements represents an outlier
(o)
(1) The average per member per month Part D direct subsidy standardized to the 1.0 (average risk score) beneficiary for each Part D plan offered.
(2) The average Part D risk score for each Part D plan offered.
(3) The average per member per month Part D plan low-income cost sharing subsidy for each Part D plan offered.
(4) The average per member per month Part D Federal reinsurance subsidy for each Part D plan offered.
(5) The actual Part D reconciliation payment data summarized at the Parent Organization level including breakouts of risk sharing, reinsurance, and low income cost sharing reconciliation amounts.
At 76 FR 54634, Sept. 1, 2011, § 423.505 was amended by revising the introductory text to paragraph (b)(21), effective October 31, 2011. For the convenience of the user, the revised text is set forth as follows:
(b) * * *
(21) Effective contract year 2009 and subsequent contract years, update any prescription drug pricing standard based on the cost of the drug used for reimbursement of network pharmacies by the Part D sponsor on—
(a)
(b)
(c)
(d)
(e) The provisions of this section do not apply to fallback entities.
(a)
(2) If a Part D plan sponsor does not intend to renew its contract, it must notify—
(i) CMS in writing by the first Monday of June in the year in which the contract ends;
(ii) Each Medicare enrollee by mail at least 90 calendar days before the date on which the nonrenewal is effective. The sponsor must also provide information about alternative enrollment options by doing one or more of the following:
(A) Provide a CMS approved written description of alternative MA plan and PDP options available for obtaining qualified prescription drug coverage within the beneficiaries' region.
(B) Place outbound calls to all affected enrollees to ensure beneficiaries know who to contact to learn about their enrollment options.
(3) If a Part D plan sponsor does not renew a contract under this paragraph (a), CMS cannot enter into a contract
(4) During the same 2-year period specified under paragraph (a)(3) of this section, CMS will not contract with an organization whose covered persons also served as covered persons for the non-renewing sponsor. A “covered person” as used in this paragraph means one of the following:
(i) All owners of nonrenewed or terminated organizations who are natural persons, other than shareholders who have an ownership interest of less than 5 percent.
(ii) An owner of a whole or part interest in a mortgage, deed of trust, note or other obligation secured (in whole or in part) by the organization, or by any of the property or assets thereof, which whole or part interest is equal to or exceeds 5 percent of the total property and assets of the organization.
(iii) A member of the board of directors or board of trustees of the entity, if the organization is organized as a corporation.
(5) If a Part D plan sponsor does not renew a contract under this paragraph (a), it must ensure the timely transfer of any data or files.
(b)
(i) The reasons listed in § 423.509(a) that also permit CMS to terminate the contract.
(ii) The Part D plan sponsor has committed any of the acts in § 423.752 that support the imposition of intermediate sanctions or civil money penalties under § 423.750.
(iii) The contract must be nonrenewed as to an individual PDP if that plan does not have a sufficient number of enrollees to establish that it is a viable independent plan option.
(2)
(i) To the Part D plan sponsor by August 1 of the contract year.
(ii) To each of the Part D plan sponsor's Medicare enrollees by mail at least 90 calendar days before the date on which the nonrenewal is effective, or at the conclusion of the appeals process if applicable.
(iii) The notice provisions in paragraph (b)(2)(ii) of this section also apply in cases where a non-renewal results because CMS and the Part D plan sponsor are unable to reach agreement on the bid under subpart F.
(3)
(ii) The Part D plan sponsor is solely responsible for the identification, development, and implementation of its corrective action plan and for demonstrating to CMS that the underlying deficiencies have been corrected within the time period specified by CMS in the notice requesting corrective action.
(4)
(a)
(b)
(c)
(d)
(e)
(f)
(1) All owners of nonrenewed or terminated organizations who are natural persons, other than shareholders who have an ownership interest of less than 5 percent.
(2) An owner of a whole or part interest in a mortgage, deed of trust, note or other obligation secured (in whole or in part) by the organization, or any of the property or assets thereof, which whole or part interest is equal to or exceeds 5 percent of the total property, and assets of the organization.
(3) A member of the board of directors or board of trustees of the entity, if the organization is organized as a corporation.
(a)
(1) Has failed substantially to carry out the contract.
(2) Is carrying out the contract in a manner that is inconsistent with the efficient and effective administration of this part.
(3) No longer substantially meets the applicable conditions of this part.
(4) Based on credible evidence, has committed or participated in false, fraudulent, or abusive activities affecting the Medicare, Medicaid, or other State or Federal health care programs, including submission of false or fraudulent data.
(5) Substantially fails to comply with the requirements in subpart M of this part relating to grievances and appeals.
(6) Fails to provide CMS with valid risk adjustment, reinsurance and risk corridor related data as required under § 423.322 and § 423.329 (or, for fallback entities, fails to provide the information in § 423.871(f)).
(7) Substantially fails to comply with the service access requirements in § 423.120.
(8) Substantially fails to comply with either of the following:
(i) Marketing requirements in subpart V of this part.
(ii) Information dissemination requirements of § 423.128 of this part.
(9) Substantially fails to comply with the coordination with plans and programs that provide prescription drug coverage as described in subpart J of this part.
(10) Substantially fails to comply with the cost and utilization management, quality improvement, medication therapy management and fraud, abuse and waste program requirements as specified in subparts D and K of this part.
(11) Fails to comply with the regulatory requirements contained in this part.
(12) Fails to meet CMS performance requirements in carrying out the regulatory requirements contained in this part.
(b)
(1)
(ii) The Part D plan sponsor notifies its Medicare enrollees of the termination by mail at least 30 days before the effective date of the termination.
(iii) The Part D plan sponsor notifies the general public of the termination at least 30 days before the effective date of the termination by publishing a notice in one or more newspapers of general circulation in each community or county located in the Part D plan sponsor's service area.
(iv) If a Part D plan sponsor's contract is terminated under paragraph (a) of this section, it must ensure the timely transfer of any data or files.
(2)
(A) CMS determines that a delay in termination, resulting from compliance with the procedures provided in this part prior to termination, would pose an imminent and serious risk to the health of the individuals enrolled with the Part D plan sponsor;
(B) The Part D plan sponsor experiences financial difficulties so severe that its ability to make necessary health services available is impaired to the point of posing an imminent and serious risk to the health of its enrollees, or otherwise fails to make services available to the extent that such a risk to health exists; or
(C) The contract is being terminated based on the violation specified in paragraph (a)(4) of this section.
(ii) CMS notifies the MA organization in writing that its contract will be terminated on a date specified by CMS. If a termination in is effective in the middle of a month, CMS has the right to recover the prorated share of the capitation payments made to the Part D plan sponsor covering the period of the month following the contract termination.
(iii) CMS notifies the Part D plan sponsor's Medicare enrollees in writing of CMS's decision to terminate the Part D plan sponsor's contract. This notice occurs no later than 30 days after CMS notifies the plan of its decision to terminate the Part D plan sponsor's contract. CMS simultaneously informs the Medicare enrollees of alternative options for obtaining qualified prescription drug coverage, including alternative PDP sponsors and MA-PDs in a similar geographic area.
(iv) CMS notifies the general public of the termination no later than 30 days after notifying the plan of CMS's decision to terminate the Part D plan sponsor's contract. This notice is published in one or more newspapers of general circulation in each community or county located in the Part D plan sponsor's service area.
(c)
(ii) The Part D plan sponsor is solely responsible for the identification, development, and implementation of its corrective action plan and for demonstrating to CMS that the underlying deficiencies have been corrected within the time period specified by CMS in the notice requesting corrective action.
(2)
(i) CMS determines that a delay in termination, resulting from compliance with the procedures provided in this part prior to termination, would pose an imminent and serious risk to the health of the individuals enrolled with the Part D plan sponsor;
(ii) The Part D plan sponsor experiences financial difficulties so severe that its ability to make necessary health services available is impaired to the point of posing an imminent and serious risk to the health of its enrollees, or otherwise fails to make services available to the extent that such a risk to health exists; or
(iii) The contract is being terminated based on the violation specified in (a)(4) of this section.
(d)
(e)
(a)
(b)
(1) To CMS, at least 90 days before the intended date of termination. This notice must specify the reasons why the Part D sponsor is requesting contract termination.
(2) To its Medicare enrollees, at least 60 days before the termination effective date. This notice must include a written description of alternatives available for obtaining qualified prescription drug coverage within the services area, including alternative PDPs, MA-PDPs, and original Medicare and must receive CMS approval.
(3) To the general public, at least 60 days before the termination effective date by publishing a CMS-approved notice in one or more newspapers of general circulation in each community or county located in the Part D plan sponsor's geographic area.
(c)
(d)
(e)
(2) During the same 2-year period specified in (e)(1) of this section, CMS will not contract with an organization whose covered persons also served as covered persons for the terminating sponsor. A “covered person” as used in this paragraph means one of the following:
(i) All owners of nonrenewed or terminated organizations who are natural persons, other than shareholders who have an ownership interest of less than 5 percent.
(ii) An owner of a whole or part interest in a mortgage, deed of trust, note or other obligation secured (in whole or in part) by the organization, or any of the property or assets thereof, which whole or part interest is equal to or exceeds 5 percent of the total property and assets of the organization.
(iii) A member of the board of directors or board of trustees of the entity, if the organization is organized as a corporation.
(f)
(a)
(1) At least 5,000 individuals are enrolled for the purpose of receiving prescription drug benefits from the organization; or
(2) At least 1,500 individuals are enrolled for purposes of receiving prescription drug benefits from the organization and the organization primarily serves individuals residing outside of urbanized areas as defined in § 412.62(f) of this chapter;
(3) Except as provided for in paragraph (b) of this section, a Part D plan sponsor must maintain a minimum enrollment as defined in paragraphs (a)(1) and (a)(2) of this section for the duration of its contract.
(b)
(a)
(1) The cost of its operations.
(2) The patterns of utilization of its services.
(3) The availability, accessibility, and acceptability of its services.
(4) Information demonstrating that the Part D plan sponsor has a fiscally sound operation.
(5) Other matters that CMS may require.
(b)
(1) A description of significant business transactions, as defined in § 423.501, between the Part D plan sponsor and a party in interest, including the following:
(i) Indication that the costs of the transactions listed in paragraph (c) of this section do not exceed the costs that would be incurred if these transactions were with someone who is not a party in interest; or
(ii) If they do exceed, a justification that the higher costs are consistent with prudent management and fiscal soundness requirements.
(2) A combined financial statement for the Part D plan sponsor and a party in interest if either of the following conditions is met:
(i) Thirty five percent or more of the costs of operation of the Part D sponsor go to a party in interest.
(ii) Thirty five percent or more of the revenue of a party in interest is from the Part D plan sponsor.
(c)
(2) Inter-entity transactions must be eliminated in the consolidated column.
(3) The statements must be examined by an independent auditor in accordance with generally accepted accounting principles and must include appropriate opinions and notes.
(4) Upon written request from a Part D plan sponsor showing good cause, CMS may waive the requirement that the organization's combined financial statement include the financial information required in this paragraph (c) of this section for a particular entity.
(d)
(2) The PDP sponsor must furnish the information to the employer or the employer's designee, or to the plan administrator, as the term “administrator” is defined in ERISA.
(e)
(f)
(g)
CMS may not implement, other than at the beginning of a calendar year, regulations under this section that impose new, significant regulatory requirements on a PDP sponsor or a prescription drug plan.
(a)
(i) 14 days after the date on which the claim is received, as defined in paragraph (a)(2)(i) of this section, for an electronic claim; or
(ii) 30 days after the date on which the claim is received, as defined in paragraph (a)(2)(ii) of this section, for any other claim.
(2)
(i) On the date on which the claim is transferred, for an electronic claim; or
(ii) On the 5th day after the postmark day of the claim or the date specified in the time stamp of the transmission, for any other claim, whichever is sooner.
(b)
(c)
(i) 10 days after the date on which the claim is received, as defined in paragraph (a)(2)(i) of this section, for an electronic claim; or
(ii) 15 days after the date on which the claim is received, as defined in paragraph (a)(2)(ii) of this section, for any other claim.
(2)
(ii)
(3)
(d)
(1) The payment is transferred, for an electronic claim; or
(2) The payment is submitted to the United States Postal Service or common carrier for delivery, for any other claim.
(e)
(2)
(f)
(g)
(2)
(h)
At 76 FR 54634, Sept. 1, 2011, § 423.520 was amended by revising paragraphs (c)(2)(ii), (c)(3), and (e)(2), effective October 31, 2011. For the convenience of the user, the revised text is set forth as follows:
(c) * * *
(2) * * *
(ii)
(3)
(e) * * *
(2)
(a)
(1)
(2)
(3)
(b)
(c)
(2) If the PDP sponsor fails to give CMS the required notice in a timely manner, it continues to be liable for payments that CMS makes to it on behalf of Medicare enrollees after the date of change of ownership.
(d)
(1) Is embodied in a document executed and signed by all 3 parties;
(2) Meets the requirements of § 423.552; and
(3) Recognizes the new owner as the successor in interest to the current owner's Medicare contract.
(e)
(1) The existing contract becomes invalid; and
(2) If the new owner wishes to participate in the Medicare program, it must apply for, and enter into, a contract in accordance with subpart K of this part.
(f)
(g)
(2) CMS will not recognize or allow a sale or transfer that consists solely of the sale or transfer of individual beneficiaries, groups of beneficiaries enrolled in a pharmacy benefit package, or one contract if the sponsor holds more than one PDP contract.
(a)
(1)
(2)
(3)
(i) The proposed new owner is in fact a successor in interest to the contract.
(ii) Recognition of the new owner as a successor in interest to the contract is in the best interest of the Medicare program.
(iii) The successor organization meets the requirements to qualify as a PDP sponsor under subpart K of this part.
(b)
(1)
(2)
(3)
(i) Guarantee performance of the contract by the new owner during the contract period; or
(ii) Post a performance bond that is satisfactory to CMS.
(4)
(a)
(b)
(2) If the other entity wishes to participate in Medicare as a PDP sponsor, it must apply for and enter into a contract in accordance with § 423.502.
(c)
(a) This subpart sets forth the requirements relating to the following:
(1) Part D plan sponsors with respect to grievances, coverage determinations, and redeterminations.
(2) Part D IRE with respect to reconsiderations.
(3) Part D enrollees' rights with respect to grievances, coverage determinations, redeterminations, and reconsiderations.
(b) The requirements regarding reopenings, ALJ hearings, MAC review, and Judicial review are set forth in subpart U of this chapter.
As used in this subpart, unless the context indicates otherwise—
(a)
(1) A Part D plan sponsor, for each Part D plan that it offers, must establish and maintain—
(i) A grievance procedure as described in § 423.564 for addressing issues that do not involve coverage determinations;
(ii) Use a single, uniform exceptions and appeals process which includes, procedures for accepting oral and written requests for coverage determinations and redeterminations that are in accordance with § 423.128 (b)(7) and (d)(1)(iii).
(iii) A procedure for making timely coverage determinations, including determinations on requests for exceptions to a tiered cost-sharing structure or to a formulary; and
(iv) Appeal procedures that meet the requirements of this subpart for issues that involve coverage determinations.
(2) A Part D plan sponsor must ensure that all enrollees receive written information about the—
(i) Grievance and appeal procedures that are available to them through the Part D plan sponsor; and
(ii) Complaint process available to the enrollee under the QIO process as set forth under section 1154(a)(14) of the Act.
(3) A Part D plan sponsor must arrange with its network pharmacies to distribute notices instructing enrollees how to contact their plans to obtain a coverage determination or request an exception if they disagree with the information provided by the pharmacist. These notices must comply with the standards established in § 423.128(b)(7)(iii).
(4) In accordance with subpart K of this part, if the Part D plan sponsor delegates any of its responsibilities under this subpart to another entity or individual through which the Part D plan sponsor provides covered benefits, the Part D plan sponsor is ultimately responsible for ensuring that the entity or individual satisfies the relevant requirements of this subpart.
(5) A Part D plan sponsor must employ a medical director who is responsible for ensuring the clinical accuracy
(b)
(1) The right to have grievances between the enrollee and the Part D plan sponsor heard and resolved by the plan sponsor, as described in § 423.564.
(2) The right to a timely coverage determination by the Part D plan sponsor, as specified in § 423.566 and § 423.568, including the right to request from the Part D plan sponsor an exception to its tiered cost-sharing structure or formulary, as specified in § 423.578.
(3) The right to request from the Part D plan sponsor an expedited coverage determination, as specified in § 423.570.
(4) If dissatisfied with any part of a coverage determination, all of the following appeal rights:
(i) The right to a redetermination of the adverse coverage determination by the Part D plan sponsor, as specified in § 423.580.
(ii) The right to request an expedited redetermination, as provided under § 423.584.
(iii) If, as a result of a redetermination, a Part D plan sponsor affirms, in whole or in part, its adverse coverage determination, the right to a reconsideration or expedited reconsideration by an independent review entity (IRE) contracted by CMS, as specified in § 423.600.
(iv) If the IRE affirms the plan's adverse coverage determination, in whole or in part, the right to an ALJ hearing if the amount in controversy meets the requirements in § 423.1970.
(v) If the ALJ affirms the IRE's adverse coverage determination, in whole or in part, the right to request MAC review of the ALJ hearing decision, as specified in § 423.1974.
(vi) If the MAC affirms the ALJ's adverse coverage determination, in whole or in part, the right to judicial review of the hearing decision if the amount in controversy meets the requirements in § 423.1976.
(c)
(d)
(a)
(b)
(c)
(d)
(2) An enrollee must file a grievance no later than 60 calendar days after the event or incident that precipitates the grievance.
(e)
(2) The Part D plan sponsor may extend the 30 calendar day timeframe by up to 14 calendar days if the enrollee requests the extension or if the Part D plan sponsor justifies a need for additional information and documents how the delay is in the interest of the enrollee. When the Part D plan sponsor extends the deadline, it must immediately notify the enrollee in writing of the reason(s) for the delay.
(3) The Part D plan sponsor must inform the enrollee of the disposition of the grievance in accordance with the following procedures:
(i) All grievances submitted in writing must be responded to in writing.
(ii) Grievances submitted orally may be responded to either orally or in writing, unless the enrollee requests a written response.
(iii) All grievances related to quality of care, regardless of how the grievance is filed, must be responded to in writing. The response must include a description of the enrollee's right to file a written complaint with the QIO. For any complaint submitted to a QIO, the Part D plan sponsor must cooperate with the QIO in resolving the complaint.
(f)
(g)
(a)
(b)
(1) A decision not to provide or pay for a Part D drug (including a decision not to pay because the drug is not on the plan's formulary, because the drug is determined not to be medically necessary, because the drug is furnished by an out-of-network pharmacy, or because the Part D plan sponsor determines that the drug is otherwise excludable under section 1862(a) of the Act if applied to Medicare Part D) that the enrollee believes may be covered by the plan;
(2) Failure to provide a coverage determination in a timely manner, when a delay would adversely affect the health of the enrollee;
(3) A decision concerning an exceptions request under § 423.578(a);
(4) A decision concerning an exceptions request under § 423.578(b); or
(5) A decision on the amount of cost sharing for a drug.
(c) Who can request a coverage determination. Individuals who can request a standard or expedited coverage determination are—
(1) The enrollee;
(2) The enrollee's appointed representative, on behalf of the enrollee; or
(3) The prescribing physician or other prescriber, on behalf of the enrollee.
(d)
(a)
(1) Except as specified in paragraph (a)(2) of this section, the request may be made orally or in writing.
(2) Requests for payment must be made in writing (unless the Part D plan sponsor has implemented a voluntary policy of accepting oral payment requests).
(3) The Part D plan sponsor must establish and maintain a method of documenting all oral requests and retain the documentation in the case file.
(b)
(c)
(d)
(e)
(f)
(g)
(1) Use approved notice language in a readable and understandable form.
(2) State the specific reasons for the denial.
(i) For drug coverage denials, describe both the standard and expedited redetermination processes, including the enrollee's right to, and conditions
(ii) For payment denials, describe the standard redetermination process and the rest of the appeals process.
(3) Inform the enrollee of his or her right to a redetermination.
(4) Comply with any other notice requirements specified by CMS.
(h)
(a)
(b)
(2) A prescribing physician or other prescriber may provide oral or written support for an enrollee's request for an expedited determination.
(c)
(1) An efficient and convenient means for accepting oral or written requests submitted by enrollees, prescribing physicians, or other prescribers.
(2) A method for documenting all oral requests and maintaining the documentation in the case file; and
(3) A means for issuing prompt decisions on expediting a determination, based on the following requirements:
(i) For a request made by an enrollee, provide an expedited determination if it determines that applying the standard timeframe for making a determination may seriously jeopardize the life or health of the enrollee or the enrollee's ability to regain maximum function.
(ii) For a request made or supported by an enrollee's prescribing physician or other prescriber, provide an expedited determination if the physician or other prescriber indicates that applying the standard timeframe for making a determination may seriously jeopardize the life or health of the enrollee or the enrollee's ability to regain maximum function.
(d)
(1) Make the determination within the 72-hour timeframe established in § 423.568(b) for a standard determination. The 72-hour period begins on the day the Part D plan sponsor receives the request for expedited determination, or, for an exceptions request, the physician's or other prescriber's supporting statement.
(2) Give the enrollee and prescribing physician or other prescriber prompt oral notice of the denial that—
(i) Explains that the Part D plan sponsor must process the request using the 72 hour timeframe for standard determinations;
(ii) Informs the enrollee of the right to file an expedited grievance if he or she disagrees with the decision by the Part D plan sponsor not to expedite;
(iii) Informs the enrollee of the right to resubmit a request for an expedited determination with the prescribing physician's or other prescriber's support and
(iv) Provides instructions about the plan's grievance process and its timeframes.
(3) Subsequently deliver to the enrollee, within 3 calendar days, equivalent written notice.
(e)
(a)
(b)
(c)
(2) If the determination is not completely favorable to the enrollee, the notice must—
(i) Use approved language in a readable and understandable form;
(ii) State the specific reasons for the denial;
(iii) Inform the enrollee of his or her right to a redetermination;
(iv) Describe—
(A) Both the standard and expedited redetermination processes, including the enrollee's right to request an expedited redetermination;
(B) Conditions for obtaining an expedited redetermination; and
(C) Other aspects of the appeal process.
(d)
The coverage determination is binding on the Part D plan sponsor and the enrollee unless it is reviewed and revised under § 423.580 through § 423.604 and § 423.1970 through § 423.1976 or is reopened and revised under § 423.1978.
(a)
(1) The exceptions procedures must address situations where a formulary's tiering structure changes during the year and an enrollee is using a drug affected by the change.
(2) The exceptions criteria of a Part D plan sponsor must include, but are not limited to—
(i) A description of the criteria a Part D plan sponsor uses to evaluate a determination made by the enrollee's prescribing physician or other prescriber under paragraph (a)(4) of this section.
(ii) Consideration of whether the requested Part D drug that is the subject of the exceptions request is the therapeutic equivalent, as defined in § 423.100, of any other drug on the plan's formulary.
(iii) Consideration of the number of drugs on the plan's formulary that are in the same class and category as the requested prescription drug that is the subject of the exceptions request.
(3) An enrollee or the enrollee's prescribing physician or other prescriber may file a request for an exception.
(4) A prescribing physician or other prescriber must provide an oral or written supporting statement that the preferred drug for the treatment of the enrollee's conditions—
(i) Would not be as effective for the enrollee as the requested drug;
(ii) Would have adverse effects for the enrollee; or
(iii) Both paragraphs (a)(4)(i) and (a)(4)(ii) of this section apply.
(5) If the physician or other prescriber provides an oral supporting statement, the Part D plan sponsor may require the physician or other prescriber to subsequently provide a written supporting statement to demonstrate the medical necessity of the drug. The Part D plan sponsor may require the prescribing physician or other prescriber to provide additional supporting medical documentation as part of the written follow-up.
(6) In no case is a Part D plan sponsor required to cover a non-preferred drug at the generic drug cost-sharing level if the plan maintains a separate tier dedicated to generic drugs.
(7) If a Part D plan sponsor maintains a formulary tier in which it places very high cost and unique items, such as genomic and biotech products, the sponsor may design its exception process so that very high cost or unique drugs are not eligible for a tiering exception.
(b)
(1) The plan's formulary exceptions process must address each of the following circumstances:
(i) Situations where a formulary changes during the year, and situations where an enrollee is already using a given drug.
(ii) Continued coverage of a particular Part D prescription drug that the Part D plan sponsor is discontinuing coverage on the formulary for reasons other than safety or because the Part D prescription drug cannot be supplied by or was withdrawn from the market by the drug's manufacturer.
(iii) An exception to a plan's coverage policy that causes a Part D prescription drug not to be covered because of cost utilization tools, such as a requirement for step therapy, dosage limitations, or therapeutic substitution.
(2) The exception criteria of a Part D plan sponsor must include, but are not limited to—
(i) A description of the criteria a Part D plan sponsor uses to evaluate a prescribing physician's or other prescriber's determination made under paragraph (b)(5) of this section;
(ii) A process for gathering and comparing applicable medical and scientific evidence on the safety and effectiveness of the requested non-formulary drug with the formulary drug for the enrollee, including safety information generated by an authoritative government body; and
(iii) A description of the cost-sharing scheme that will be applied when coverage is provided for a non-formulary drug.
(3) If the Part D plan sponsor covers a non-formulary drug, the cost(s) incurred by the enrollee for that drug are treated as being included for purposes of calculating and meeting the annual out-of-pocket threshold.
(4) An enrollee, the enrollee's appointed representative, or the prescribing physician or other prescriber (on behalf of the enrollee) may file a request for an exception.
(5) A prescribing physician or other prescriber must provide an oral or written supporting statement that the requested prescription drug is medically necessary to treat the enrollee's disease or medical condition because—
(i) All of the covered Part D drugs on any tier of a plan's formulary for treatment for the same condition would not be as effective for the enrollee as the non-formulary drug, would have adverse effects for the enrollee, or both;
(ii) The prescription drug alternative(s) listed on the formulary or required to be used in accordance with step therapy requirements—
(A) Has been ineffective in the treatment of the enrollee's disease or medical condition or, based on both sound clinical evidence and medical and scientific evidence and the known relevant physical or mental characteristics of the enrollee and known characteristics of the drug regimen, is likely to be ineffective or adversely affect the drug's effectiveness or patient compliance; or
(B) Has caused or based on sound clinical evidence and medical and scientific evidence, is likely to cause an adverse reaction or other harm to the enrollee; or
(iii) The number of doses that is available under a dose restriction for the prescription drug has been ineffective in the treatment of the enrollee's disease or medical condition or, based on both sound clinical evidence and medical and scientific evidence and the known relevant physical or mental characteristics of the enrollee and known characteristics of the drug regimen, is likely to be ineffective or adversely affect the drug's effectiveness or patient compliance.
(6) If the physician or other prescriber provides an oral supporting statement, the Part D plan sponsor may require the physician or other prescriber to subsequently provide a written supporting statement. The Part D plan sponsor may require the prescribing physician or other prescriber to provide additional supporting medical documentation as part of the written follow-up.
(c)
(2) When a Part D plan sponsor does not make a timely decision. If the Part D plan sponsor fails to make a decision on an exceptions request and provide notice of the decision within the timeframe required under § 423.568(a) or § 423.572(a), as applicable, the failure constitutes an adverse coverage determination, and the Part D plan sponsor must forward the enrollee's request to the IRE within 24 hours of the expiration of the adjudication timeframe.
(3)
(i) The enrollee's prescribing physician or other prescriber continues to prescribe the drug.
(ii) The drug continues to be considered safe for treating the enrollee's disease or medical condition; and
(iii) The enrollment period has not expired. If an enrollee renews his or her membership after the plan year, the plan may choose to continue coverage into the subsequent plan year.
(4)
(i) The Part D plan sponsor may not require the enrollee to request approval for a refill, or a new prescription to continue using the Part D prescription drug after the refills for the initial prescription are exhausted, as long as—
(A) The enrollee's prescribing physician or other prescriber continues to prescribe the drug;
(B) The drug continues to be considered safe for treating the enrollee's disease or medical condition; and
(C) The enrollment period has not expired. If an enrollee renews his or her membership after the plan year, the plan may choose to continue coverage into the subsequent plan year.
(ii) The Part D plan sponsor must not establish a special formulary tier or co-payment or other cost-sharing requirement that is applicable only to prescription drugs approved for coverage under this section.
(iii) An enrollee may not request a tiering exception for a non-formulary prescription drug approved under § 423.578(b).
(d)
(e)
(f)
An enrollee who has received a coverage determination (including one that is reopened and revised as described in § 423.1978) may request that it be redetermined under the procedures described in § 423.582, which address requests for a standard redetermination. The prescribing physician or other prescriber (acting on behalf of an enrollee), upon providing notice to the enrollee, may request a standard redetermination under the procedures described in § 423.582. An enrollee or an enrollee's prescribing physician or other prescriber (acting on behalf of an enrollee) may request an expedited redetermination as specified in § 423.584.
(a)
(b)
(c)
(2)
(i) Be in writing; and
(ii) State why the request for redetermination was not filed on time.
(d)
(a)
(b)
(2) A prescribing physician or other prescriber may provide oral or written support for an enrollee's request for an expedited redetermination.
(c)
(1)
(2)
(i) For a request made by an enrollee, the Part D plan sponsor must provide an expedited redetermination if it determines that applying the standard timeframe for making a redetermination may seriously jeopardize the life or health of the enrollee or the enrollee's ability to regain maximum function.
(ii) For a request made or supported by a prescribing physician or other prescriber, the Part D plan sponsor must provide an expedited redetermination if the physician or other prescriber indicates that applying the standard timeframe for conducting a redetermination may seriously jeopardize the life or health of the enrollee or the enrollee's ability to regain maximum function.
(d)
(1) Make the determination within the 7 calendar day timeframe established in § 423.590(a). The 7 calendar day period begins the day the Part D plan sponsor receives the request for expedited redetermination.
(2) Give the enrollee prompt oral notice of the denial that—
(i) Explains that the Part D plan sponsor processes the enrollee's request using the 7 calendar day timeframe for standard redetermination;
(ii) Informs the enrollee of the right to file an expedited grievance if he or she disagrees with the decision by the Part D plan sponsor not to expedite;
(iii) Informs the enrollee of the right to resubmit a request for an expedited redetermination with the prescribing physician's or other prescriber's support; and
(iv) Provides instructions about the expedited grievance process and its timeframes.
(3) Subsequently deliver, within three calendar days, equivalent written notice.
(e)
The Part D plan sponsor must provide the enrollee or the prescribing physician or other prescriber, as appropriate, with a reasonable opportunity to present evidence and allegations of fact or law, related to the issue in dispute, in person as well as in writing. In
(a)
(2) If the Part D plan sponsor makes a redetermination that affirms, in whole or in part, its adverse coverage determination, it must notify the enrollee in writing of its redetermination as expeditiously as the enrollee's health condition requires, but no later than 7 calendar days from the date it receives the request for a standard redetermination.
(b)
(2) If the Part D plan sponsor affirms, in whole or in part, its adverse coverage determination, it must notify the enrollee in writing of its redetermination no later than 7 calendar days from the date it receives the request for redetermination.
(c)
(d)
(2)
(3) How the Part D plan sponsor must request additional information. If the Part D plan sponsor must receive medical information, the Part D plan sponsor must request the necessary information within 24 hours of the initial request for an expedited redetermination. Regardless of whether the Part D plan sponsor requests additional information, the Part D plan sponsor is responsible for meeting the timeframe and notice requirements.
(e)
(f)
(2) When the issue is the denial of coverage based on a lack of medical necessity (or any substantively equivalent term used to describe the concept of medical necessity), the redetermination must be made by a physician with expertise in the field of medicine that
(g)
(1) Use approved notice language in a readable and understandable form;
(2) State the specific reasons for the denial;
(3) Inform the enrollee of his or her right to a reconsideration;
(i) For adverse drug coverage redeterminations, describe both the standard and expedited reconsideration processes, including the enrollee's right to, and conditions for, obtaining an expedited reconsideration and the rest of the appeals process;
(ii) For adverse payment redeterminations, describe the standard reconsideration process and the rest of the appeals process; and
(4) Comply with any other notice requirements specified by CMS.
(h)
(a) An enrollee who is dissatisfied with the redetermination of a Part D plan sponsor has a right to a reconsideration by an independent review entity that contracts with CMS. An enrollee must file a written request for reconsideration with the IRE within 60 calendar days of the date of the redetermination by the Part D plan sponsor.
(b) When an enrollee files an appeal, the IRE is required to solicit the views of the prescribing physician or other prescriber. The IRE may solicit the views of the prescribing physician or other prescriber orally or in writing. A written account of the prescribing physician's or other prescriber's views (prepared by either the prescribing physician, other prescriber, or IRE, as appropriate) must be contained in the IRE's record.
(c) In order for an enrollee to request an IRE reconsideration of a determination by a Part D plan sponsor not to provide for a Part D drug that is not on the formulary, the prescribing physician or other prescriber must determine that all covered Part D drugs on any tier of the formulary for treatment of the same condition would not be as effective for the individual as the non-formulary drug, would have adverse effects for the individual, or both.
(d) The independent review entity must conduct the reconsideration as expeditiously as the enrollee's health condition requires but must not exceed the deadlines applicable in § 423.590, including those deadlines that are applicable when a request for an expedited reconsideration is received and granted.
(e) When the issue is the denial of coverage based on a lack of medical necessity (or any substantively equivalent term used to describe the concept of medical necessity), the reconsideration must be made by a physician with expertise in the field of medicine that is appropriate for the services at issue. The physician making the reconsideration need not, in all cases, be of the same specialty or subspecialty as the prescribing physician or other prescriber.
(a)
(b)
(1) State the specific reasons for the IRE's decision in understandable language;
(2) If the reconsideration determination is adverse (that is, does not completely reverse the adverse coverage determination by the Part D plan sponsor), inform the enrollee of his or her right to an ALJ hearing if the amount in controversy meets the threshold requirement under § 423.1970;
(3) Describe the procedures that must be followed to obtain an ALJ hearing; and
(4) Comply with any other requirements specified by CMS.
A reconsideration determination is final and binding on the enrollee and the Part D plan sponsor, unless the enrollee files a request for a hearing under the provisions of § 423.1972.
(a)
(2)
(b)
(2)
(a)
(b)
This subpart establishes the procedures for reviewing the following contract determinations:
(a) A determination that an entity is not qualified to enter into a contract with CMS under Part D of title XVIII of the Act.
(b) A determination not to authorize a renewal of a contract with a PDP sponsor in accordance with § 423.507(b).
(c) A determination to terminate a contract with a PDP sponsor in accordance with § 423.509.
(d) Fallback entities are governed under subpart Q of this part, and are not subject to this subpart, except to the extent a fallback prescription drug plan contract is terminated by CMS.
(a) When CMS makes a contract determination under § 423.641, it gives the PDP sponsor written notice.
(b) The notice specifies the—
(1) Reasons for the determination; and
(2) The Part D sponsor's right to request a hearing.
(c)
(2)
(d) When CMS determines that it will not authorize a contract renewal, CMS mails the notice to the Part D sponsor by August 1 of the current contract year.
The contract determination is final and binding unless a timely request for a hearing is filed under 423.651.
(a)
(1) A contract applicant that has been determined to be unqualified to enter into a contract with CMS under Part D of Title XVIII of the Act in accordance with § 423.502 and § 423.503 of this part.
(2) A Part D sponsor whose contract has been terminated under § 423.509 of this part.
(3) A Part D sponsor whose contract has not been renewed in accordance with § 423.507 of this part.
(4) A Part D sponsor who has had an intermediate sanction imposed in accordance with § 423.752(a) and (b) of this part.
(b)
(2) During a hearing to review a contract determination as described at § 423.641(b) of this part, the Part D plan sponsor has the burden of proving by a preponderance of the evidence that CMS' determination was inconsistent with the requirements of § 423.507 of this part.
(3) During a hearing to review a contract determination as described at § 423.641(c) of this subpart, the Part D plan sponsor has the burden of proving by a preponderance of the evidence that CMS' determination was inconsistent with the requirements of § 423.509 of this part.
(4) During a hearing to review the imposition of an intermediate sanction as described at § 423.750 of this part, the Part D sponsor has the burden of proving by a preponderance of the evidence
(c)
(a)
(2) The request for the hearing must be filed in accordance with the requirements specified in the notice.
(b)
(c)
(1) The parties described in § 423.650;
(2) At the discretion of the hearing officer, any interested parties who make a showing that their rights may be prejudiced by the decision to be rendered at the hearing; and
(3) CMS.
(a)
(b)
(2) A contract terminated in accordance with § 423.509(b)(2)(i) of this part will be terminated on the date specified by CMS and will not be postponed if a hearing is requested.
CMS designates a hearing officer to conduct the hearing. The hearing officer need not be an ALJ.
(a) A hearing officer may not conduct a hearing in a case in which he or she is prejudiced or partial to any party or has any interest in the matter pending for decision.
(b) A party to the hearing who objects to the designated hearing officer must notify that officer in writing at the earliest opportunity.
(c) The hearing officer must consider the objections, and may, at his or her discretion, either proceed with the hearing or withdraw.
(1) If the hearing officer withdraws, CMS designates another hearing officer to conduct the hearing.
(2) If the hearing officer does not withdraw, the objecting party may, after the hearing, present objections and request that the officer's decision be revised or a new hearing be held before another hearing officer. The objections must be submitted in writing to CMS.
(a) The hearing officer—
(1) Fixes a time and place for the hearing, which is not to exceed 30 calendar days after the receipt of request for the hearing;
(2) Sends written notice to the parties that informs the parties of the general and specific issues to be resolved, the burden of proof, and information about the hearing procedure.
(b)(1) The hearing officer may, on his or her own motion, change the time and place of the hearing.
(2) The hearing officer may adjourn or postpone the hearing.
(c)(1) The Part D plan sponsor or CMS may request an extension by filing a written request no later than 10 calendar days prior to the scheduled hearing.
(2) When either the Part D plan sponsor or CMS requests an extension the hearing officer will provide a one-time 15-calendar day extension.
(3) Additional extensions may be granted at the discretion of the hearing officer.
A party may appoint as its representative at the hearing anyone not disqualified or suspended from acting as a representative before the Secretary or otherwise prohibited by law.
(a) A representative appointed and qualified in accordance with § 423.656, on behalf of the represented party—
(1) Gives or accepts any notice or request pertinent to the proceedings set forth in this subpart;
(2) Presents evidence and allegations as to facts and law in any proceedings affecting that party; and
(3) Obtains information to the same extent as the party.
(b) A notice or request sent to the representative has the same force and effect as if it is sent to the party.
(a) The hearing is open to the parties and to the public.
(b) The hearing officer inquires fully into all the matters at issue and receives in evidence the testimony of witnesses and any documents that are relevant and material.
(c) The hearing officer provides the parties an opportunity to enter any objection to the inclusion of any document.
(d) The Part D sponsor bears the burden of going forward and must first present evidence and argument before CMS presents its evidence and argument.
The hearing officer rules on the admissibility of evidence and may admit evidence that is inadmissible under rules applicable to court procedures.
(a) The hearing officer may examine the witnesses.
(b) The parties or their representatives are permitted to examine their witnesses and cross-examine witnesses of other parties.
Witness lists and documents must be identified and exchanged at least 5 calendar days prior to the scheduled hearing
(a)
(b)
(a) A complete record of the proceedings at the hearing is made and transcribed and made available to all parties upon request.
(b) The record may not be closed until a hearing decision is issued.
In exercising his or her authority, the hearing officer must comply with the provisions of title XVIII and related provisions of the Act, the regulations issued by the Secretary, and general instructions issued by CMS in implementing the Act.
(a) As soon as practical after the close of the hearing, the hearing officer issues a written decision that—
(1) Is based upon the evidence of record; and
(2) Contains separately numbered findings of fact and conclusions of law.
(b) The hearing officer provides a copy of the hearing decision to each party.
(c) The hearing decision is final and binding unless it is reversed or modified by the Administrator following review under § 423.666, or reopened and revised in accordance with § 423.668.
(a)
(b)
(c)
(d)
(e)
A decision by the Administrator under section § 423.666(c) is final and binding unless it is reopened and revised in accordance with § 423.668.
(a) CMS may reopen and revise an initial determination upon its own motion.
(b)
(c)
(d)
(2) The notice of revision specifies the reasons for revisions.
(a) The following intermediate sanctions may be imposed and will continue in effect until CMS is satisfied that the deficiencies that are the basis for the sanction determination have been corrected and are not likely to recur:
(1) Suspension of the Part D plan sponsor's enrollment of Medicare beneficiaries.
(2) Suspension of payment to the Part D plan sponsor for Medicare beneficiaries enrolled after the date CMS notifies the organization of the intermediate sanction.
(3) Suspension of all marketing activities to Medicare beneficiaries by a Part D plan sponsor.
(b) CMS may impose civil money penalties as specified in 423.760.
(a)
(1) Fails substantially to provide medically necessary items and services that are required (under law or under the contract) to be provided to an individual covered under the contract, if the failure has adversely affected (or has the substantial likelihood of adversely affecting) the individual.
(2) Imposes on Part D plan enrollees premiums in excess of the monthly basic and supplemental beneficiary premiums permitted under section 1860D-1 et seq. of the Act and subpart F of this part.
(3) Acts to expel or refuses to re-enroll a beneficiary in violation of the provisions of this part.
(4) Engages in any practice that would reasonably be expected to have the effect of denying or discouraging enrollment (except as permitted by this part) by eligible individuals with the organization whose medical condition or history indicates a need for substantial future medical services.
(5) Misrepresents or falsifies information that it furnishes—
(i) To CMS; or
(ii) To an individual or to any other entity under the Part D drug benefit program.
(6) Employs or contracts with an individual or entity who is excluded from participation in Medicare under section 1128 or 1128A of the Act (or with an entity that employs or contracts with an excluded individual or entity) for the provision of any of the following:
(i) Health care.
(ii) Utilization review.
(iii) Medical social work.
(iv) Administrative services.
(b)
(c)
(2)
(i) Violations listed at 423.752(a).
(ii) Determinations made pursuant to 423.509(a)(4).
(a)
(i) Sends a written notice to the Part D plan sponsor stating the nature and basis of the proposed intermediate sanction, and the Part D plan sponsor's right to a hearing as specified in paragraph (b) of this section; and
(ii) Sends the OIG a copy of the notice.
(2)
(b)
(2) A written request must be received by the designated CMS office within 15 calendar days after the receipt of the notice.
(3) A request for a hearing under § 423.650 of this part does not delay the date specified by CMS when the sanction becomes effective.
(4) The Part D plan sponsor must follow the right to a hearing procedure as specified at § 423.650 through § 423.662 of this part.
(c)
(2)
(3)
(i) CMS may require that the Part D plan sponsor hire an independent auditor to provide CMS with additional information to determine if the deficiencies that are the basis for the sanction determination have been corrected and are not likely to recur. The independent auditor must work in accordance with CMS specifications and must be willing to attest that a complete and full independent review has been performed.
(ii) In instances where marketing or enrollment or both intermediate sanctions have been imposed, CMS may require a Part D plan sponsor to market or to accept enrollments or both for a limited period of time in order to assist CMS in making a determination as to whether the deficiencies that are the bases for the intermediate sanctions have been corrected and are not likely to recur.
(A) If, following this time period, CMS determines the deficiencies have not been corrected or are likely to recur, the intermediate sanctions will remain in effect until such time that CMS is assured the deficiencies have been corrected and are not likely to recur.
(B) The Part D plan sponsor does not have a right to a hearing under § 423.650(a)(4) of this subpart to challenge CMS' determination to keep the intermediate sanctions in effect.
(d)
(e)
(2)
(i) A description of the basis for the determination.
(ii) The basis for the penalty.
(iii) The amount of the penalty.
(iv) The date the penalty is due.
(v) The Part D sponsor's right to a hearing as specified under Subpart T of this part.
(vi) Information about where to file the request for hearing.
(a) When a Part D plan sponsor does not request a hearing CMS initiates collection of the civil money penalty following the expiration of the timeframe for requesting an ALJ hearing as specified in subpart T.
(b) If a Part D sponsor requests a hearing and CMS' decision to impose a civil money penalty is upheld, CMS may initiate collection of the civil
(a)
(1) The nature of the conduct;
(2) The degree of culpability of the Part D sponsor;
(3) The harm which resulted or could have resulted from the conduct of the Part D sponsor;
(4) The financial condition of the Part D sponsor;
(5) The history of prior offenses by the Part D sponsor or principals of the Part D sponsor; and,
(6) Such other matters as justice may require.
(b)
(1) If the deficiency on which the determination is based has directly adversely affected (or has the substantial likelihood of adversely affecting) one or more Part D enrollees—up to $25,000 for each determination.
(2) If the deficiency on which the determination is based has directly adversely affected (or has the substantial likelihood of adversely affecting) one or more Part D enrollees, CMS may calculate a CMP of up to $25,000 for each Part D enrollee directly adversely affected (or with a substantial likelihood of being adversely affected) by a deficiency .
(3) For each week that a deficiency remains uncorrected after the week in which the Part D sponsor receives CMS' notice of the determination—up to $10,000.
(4) If CMS makes a determination that a Part D sponsor has terminated its contract other than in a manner described under 423.510 and that the Part D sponsor has therefore failed to substantially carry out the terms of the contract, $250 per Medicare enrollee from the terminated Part D sponsor or plans at the time the Part D sponsor terminated its contract, or $100,000, whichever is greater.
For civil money penalties imposed by CMS, CMS may settle civil money penalty cases at any time before a final decision is rendered.
The provisions of section 1128A of the Act (except paragraphs (a) and (b)) apply to civil money penalties under this subpart to the same extent that they apply to a civil money penalty or procedure under section 1128A of the Act.
(a)
(b)
For purposes of this subpart, the following definitions apply:
(1) Has coverage for the month under a prescription drug plan under Part D of title XVIII, or under an MA-PD plan under Part C of title XVIII; and
(2) Is determined eligible by the State for medical assistance for full benefits under title XIX for the month under any eligibility category covered under the State plan or comprehensive benefits under a demonstration under section 1115 of the Act. (This does not include individuals under Pharmacy Plus program demonstrations or under a section 1115 demonstration that provides pharmacy-only benefits to these individuals.). It also includes any individual who is determined by the State to be eligible for medical assistance under section 1902(a)(10)(C) of the Act (medically needy) or section 1902(f) of the Act (States that use more restrictive eligibility criteria than are used by the SSI program) of the Act for any month if the individual was eligible for medical assistance in any part of the month.
(1) Section 1115 of the Act.
(2) Section 1915(c) or (d) of the Act.
(3) State plan amendment under section 1915(i) of the Act.
(4) Services are provided through enrollment in a Medicaid managed care organization with a contract under section 1903(m) of the Act or section 1932 of the Act.
Personal representative for purposes of this subpart means—
(1) An individual who is authorized to act on behalf of the applicant;
(2) If the applicant is incapacitated; or incompetent, someone acting responsibly on their behalf, or
(3)An individual of the applicant's choice who is requested by the applicant to act as his or her representative in the application process.
(a)
(1) Has income below 150 percent of the FPL applicable to the individual's family size.
(2) Has resources at or below the resource thresholds set forth in § 423.773(b)(2) or (d)(2).
(b)
(1) Has income below 135 percent of the FPL applicable to the individual's family size; and
(2)Has resources that do not exceed—
(i) For 2006, 3 times the amount of resources an individual may have and still be eligible for benefits under the Supplemental Security Income (SSI) program under title XVI of the Act (including the assets or resources of the individual's spouse).
(ii) For subsequent years, the amount of resources allowable for the previous year under this paragraph (b)(2) increased by the annual percentage increase in the consumer price index (all items, U.S. city average) as of September of that previous year, rounded to the nearest multiple of $10. The nearest multiple are rounded up if it is equal to or greater than $5 and down if it is less than $5.
(c)(1)
(i) Full-benefit dual eligible individual;
(ii) Recipient of SSI benefits under title XVI of the Act; or
(iii) Eligible for Medicaid as a Qualified Medicare Beneficiary (QMB), Specified Low Income Medicare Beneficiary (SLMB), or a Qualifying Individual (QI) under a State's plan.
(2) CMS notifies an individual treated as a full-subsidy eligible under this paragraph (c) that he or she does not need to apply for the subsidies under this subpart, and, at a minimum, is deemed eligible for a full subsidy as follows:
(i) For an individual deemed eligible between January 1 and June 30 of a calendar year, the individual is deemed eligible for a full subsidy for the remainder of the calendar year.
(ii) For an individual deemed eligible between July 1 and December 31 of a calendar year, the individual is deemed eligible for the remainder of the calendar year and the following calendar year.
(d)
(1) Have income less than 150 percent of the FPL applicable to the individual's family size; and
(2) Have resources that do not exceed—
(i) For 2006, $10,000 if single or $20,000 if married (including the assets or resources of the individual's spouse).
(ii) For subsequent years, the resource amount
allowable for the previous year under this paragraph (d)(2), increased by the annual percentage increase in the consumer price index (all items, U.S. city average) as of September of the previous year, rounded to the nearest multiple of $10. The nearest multiple will be rounded up if it is equal to or greater than $5 and down if it is less than $5.
(a)
(b)
(c)
(2)
(d)
(i) Complete all required elements of the application; (ii) Provide any statements from financial institutions, as requested, to support information in the application; and
(iii) Certify, under penalty of perjury or similar sanction for false statements, as to the accuracy of the information provided on the application form.
(2)
(a)
(b)
(i) Under the Part D plan selected by the beneficiary, the portion of the monthly beneficiary premium attributable to basic coverage (for enrollees in PDPs) or the portion of the MA monthly prescription drug beneficiary premium attributable to basic prescription drug coverage (for enrollees in MA-PD plans); or
(ii) The greater of the low-income benchmark premium amount (determined under paragraph (b)(2) of this section) for the PDP region in which the subsidy eligible individual resides or the lowest monthly beneficiary premium for a PDP that offers basic prescription drug coverage in the PDP region.
(2)
(ii)
(A) The monthly beneficiary premium for a PDP that is basic prescription drug coverage;
(B) The portion of the monthly beneficiary premium attributable to basic prescription drug coverage for a PDP that is enhanced alternative coverage; or,
(C) The MA monthly prescription drug beneficiary premium (as defined under section 1854(b)(2)(B) of the Act) for a MA-PD plan and determined before the application of the monthly rebate computed under section 1854(b)(1)(C)(i) of the Act for that plan and year involved.
(c)
(d)
(1) For individuals with income at or below 135 percent of the FPL applicable to their family size, the full premium subsidy amount.
(2) For individuals with income greater than 135 percent but at or below 140 percent of the FPL applicable to the family size, a premium subsidy equal to 75 percent of the premium subsidy amount.
(3) For individual with income greater than 140 percent but at or below 145 percent of the FPL applicable to the family size a premium subsidy equal to 50 percent of the premium subsidy amount.
(4) For individuals with income greater than 145 percent but below 150 percent of FPL applicable to the family size a premium subsidy equal to 25 percent of the premium subsidy amount.
(e)
(f)
(a)
(1) Elimination of the annual deductible under § 423.104(d)(1).
(2) Reduction in cost-sharing for all covered Part D drugs covered under the PDP or MA-PD plan below the out-of-pocket limit (under § 423.104), including Part D drugs covered under the PDP or MA-PD plan obtained after the initial coverage limit (under § 423.104(d)(4)), as follows:
(i) Except as provided under paragraphs (a)(2)(ii) and (a)(2)(iii) of this section, copayment amounts not to exceed the copayment amounts specified in § 423.104(d)(5)(A). This applies to both:
(A) those full-benefit dual eligible individuals who are not institutionalized and who have income above 100 percent of the Federal poverty line applicable to the individual's family size and
(B) those individuals who have income under 135 percent of the Federal poverty line applicable to the individual's family size who meet the resources test described at § 423.773(b)(2).
(ii) Full-benefit dual-eligible individuals who are institutionalized or who are receiving home and community-based services have no cost-sharing for Part D drugs covered under their PDP or MA-PD plans.
(iii) Full-benefit dual eligible individuals with incomes that do not exceed 100 percent of the Federal poverty line applicable to the individual's family size are subject to cost-sharing for covered Part D drugs equal to the lesser of:
(A) A copayment amount of not more than $1 for a generic drug or preferred drugs that are multiple source (as defined under section 1927(k)(7)(A)(i) of the Act) or $3 for any other drug in 2006, or for years after 2006 the amounts specified in this paragraph (a)(2)(iii)(A) for the percentage increase in the Consumer Price Index, rounded to the nearest multiple of 5 cents or 10 cents, respectively; or
(B) The copayment amount charged to other individuals under this paragraph (a)(2)(i) of this section.
(3) Elimination of all cost-sharing for covered Part D drugs covered under the
(b)
(1) In 2006, reduction in the annual deductible to $50. This amount is increased each year beginning in 2007 by the annual percentage increase in average per capita aggregate expenditures for Part D drugs, rounded to the nearest multiple of $1.
(2) Fifteen percent coinsurance for all covered Part D drugs obtained after the annual deductible under the plan up to the out-of-pocket limit (under § 423.104(d)(5)(iii)).
(3) For covered Part D drugs above the out-of-pocket limit (under § 423.104(d)(5)(iii)), in 2006, copayments not to exceed $2 for a generic drug or preferred drugs that are multiple source drugs (as defined under section 1927(k)(7)(A)(i) of the Act) and $5 for any other drug. For years beginning in 2007, the amounts specified in section paragraph (b)(3) for the previous year increased by the annual percentage increase in average per capita aggregate expenditures for covered Part D drugs, rounded to the nearest multiple of 5 cents.
(c) When the out-of-pocket cost for a covered Part D drug under a Part D sponsor's plan benefit package is less than the maximum allowable copayment, coinsurance or deductible amounts under paragraphs (a) and (b) of this section, the Part D sponsor may only charge the lower benefit package amount.
(a)
(b)
(c)
(d)
(1) Accept best available evidence as defined in § 423.772 of this part received from beneficiaries or other individuals acting directly on their behalf; and
(2) Update the subsidy eligible individual's LIS status. and respond to requests for assistance in securing acceptable evidence of subsidy eligibility from beneficiaries or other individuals acting directly on their behalf in accordance with the process(es) established by CMS, and within the reasonable timeframe(s) as determined by CMS.
(e)
This subpart sets forth—the rights of beneficiaries to a choice of at least two sources of qualified prescription drug coverage; requirements and limitations on the bid submission, review and approval of fallback prescription drug plans, and the determination of enrollee premium and plan payments for these plans.
As used in this subpart, unless specified otherwise-
(1) Is a PDP sponsor that does not have to be a risk-bearing entity (or, if applying to become a fallback entity, an entity that meets all the requirements to become a Part D plan sponsor except that it does not have to be a risk-bearing entity); and
(2) Does not submit a risk bid under § 423.265 for offering a prescription drug plan for any PDP region for the first year of that contract period. An entity is treated as submitting a risk bid if the entity is acting as a subcontractor for an integral part of the drug benefit management activities of an entity that is or applies to become a non-fallback PDP sponsor. An entity is not treated as submitting a bid if it is a subcontractor of an MA organization, unless that organization is acting as or applies to become a non-fallback PDP sponsor for a prescription drug plan.
(1) Offers only defined standard or actuarially equivalent standard prescription drug coverage as defined in § 423.100;
(2) Provides access to negotiated prices, including discounts from manufacturers; and
(3) Meets all other requirements established for prescription drug plans, except as otherwise specified by CMS in this subpart or in separate guidance.
(a)
(b)
(2)
(c)
(1) CMS determines that waiver or modification is necessary to secure access to qualified prescription drug coverage for Part D eligible individuals residing in a State other than the 50 States or the District of Columbia; or
(2) An entity seeking to become a prescription drug plan in an area such as a territory, other than the 50 States or the District of Columbia requests waiver or modification of any Part D requirement in order to provide qualified prescription drug coverage.
(a)
(2)
(3)
(b)
(2)
(3)
(4)
(5)
(6)
(a)
(b)
(a)
(b)
(c)
(d)
(1)
(i)
(ii)
(iii)
(iv)
(2)
(e)
(1) The actual costs of covered Part D drugs provided to Part D eligible individuals enrolled in a fallback prescription drug plan offered by the entity; and
(2) Management fees that consist of administrative costs and return on investment and are tied to the performance measures established by CMS for the management, administration, and
(f)
(g)
The amount payable for a fallback prescription drug plan is the amount determined under the contract for the plan in accordance with § 423.871(e).
(a) Basis. This subpart is based on section 1860D-22 of the Act, as amended by section 101 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA).
(b) Scope. This section implements the statutory requirement that a subsidy payment be made to sponsors of qualified retiree prescription drug plans.
For the purposes of this subpart, the following definitions apply:
(1) The share of prices paid by the qualified retiree prescription drug plan that is received as reimbursement by the pharmacy or by an intermediary contracting organization, and reimbursement paid to indemnify a qualifying covered retiree when the reimbursement is associated with a qualifying covered retiree obtaining Part D drugs under the qualified retiree prescription drug plan.
(2) All amounts paid under the qualified retiree prescription drug plan by or on behalf of a qualifying covered retiree (such as the deductible, coinsurance, or cost sharing) in order to obtain Part D drugs that are covered under the qualified retiree prescription drug plan.
(1) A Federal or State governmental plan, which is a plan providing medical care that is established or maintained for its employees by the Government of the United States, by the government of any State or political subdivision of a State (including a county or local government), or by any agency or instrumentality or any of the foregoing, including a health benefits plan offered under chapter 89 of Title 5, United States Code (the Federal Employee Health Benefit Plan (FEHBP)).
(2) A collectively bargained plan, which is a plan providing medical care that is established or maintained under or by one or more collective bargaining agreements.
(3) A church plan, which is a plan providing medical care that is established and maintained for its employees or their beneficiaries by a church or by a convention or association of churches that is exempt from tax under section 501 of the Internal Revenue Code of 1986 (26 U.S.C. 501).
(4) An account-based medical plan such as a Health Reimbursement Arrangement (HRA) as defined in Internal Revenue Service Notice 2002-45, 2002-28 I.R.B. 93, a health Flexible Spending Arrangement (FSA) as defined in Internal Revenue Code (Code) section 106(c)(2), a health savings account (HSA) as defined in Code section 223, or an Archer MSA as defined in Code section 220, to the extent they are subject to ERISA as employee welfare benefit plans providing medical care (or would be subject to ERISA but for the exclusion in ERISA section 4(b), 29 U.S.C.§ . § 1003(b), for governmental plans or church plans).
(a)
(1) An actuarial attestation is submitted in accordance with paragraph (d) of this section. The rules for submitting attestations as part of subsidy applications are described in paragraph (c) of this section.
(2) Part D eligible individuals covered under the plan are provided with creditable coverage notices in accordance with § 423.56.
(3) Records are maintained and made available for audit in accordance with paragraph (f) of this section and § 423.888(d).
(b)
(c)
(2)
(i) Employer Tax ID Number (if applicable).
(ii) Sponsor name and address.
(iii) Contact name and email address.
(iv) Actuarial attestation that satisfies the standards specified in paragraph (d) of this section and any other supporting documentation required by CMS for each qualified retiree prescription drug plan for which the sponsor seeks subsidy payments.
(v) A list of all individuals the sponsor believes (using information reasonably available to the sponsor when it submits the application) are qualifying covered retirees enrolled in each prescription drug plan (including spouses and dependents, if Medicare-eligible), along with the information about each person listed below in this paragraph:
(A) Full name.
(B) Health Insurance Claim (HIC) number or Social Security number.
(C) Date of birth.
(D) Gender.
(E) Relationship to the retired employee.
(vi) A sponsor may satisfy paragraph (c)(2)(v) of this section by entering into a voluntary data sharing agreement (VDSA) with CMS (or any other arrangement CMS may make available).
(vii) A signed sponsor agreement.
(viii) Any other information specified by CMS.
(3)
(i) Comply with the terms and conditions of eligibility for a subsidy payment set forth in this regulation and in any related CMS guidance;
(ii) Acknowledge that at the same time CMS releases Part C and Part D summary payment data in accordance with § 422.504(n) and § 423.505(o) CMS will also release Part D retiree drug subsidy payment data for the most recently reconciled year including the name of the eligible sponsor, the total gross aggregate dollar amount of the CMS subsidy, and the number of eligible retirees;
(iii) Acknowledge that the information in the application is being provided to obtain Federal funds; and
(iv) Require that all subcontractors, including plan administrators, acknowledge that information provided in connection with the subcontract is used for purposes of obtaining Federal funds.
(4)
(5)
(ii)
(6)
(7)
(i) Matches the names and identifying information for the individuals submitted as qualifying covered retirees with a CMS database(s) to determine which retirees are Part D eligible individuals who are not enrolled in a Part D plan.
(ii) Provides information concerning the results of the search in paragraph (c)(7)(i) of this paragraph (such as names and other identifying information, if necessary) to the sponsor (or to a designee).
(d)
(1) Contents of the attestation include the following assurances:
(i) The actuarial gross value of the retiree prescription drug coverage under the plan for the plan year is at least equal to the actuarial gross value of the defined standard prescription drug coverage under Part D for the plan year in question, not taking into account the value of any discount or coverage provided during the coverage gap.
(ii) The actuarial net value of the retiree prescription drug coverage under the plan for that plan year is at least equal to the actuarial net value of the defined standard prescription drug coverage under Part D for that plan year in question, not taking into account the value of any discount or coverage provided during the coverage gap.
(iii) The actuarial values must be determined using the methodology in paragraph (d)(5) of this section.
(2) The attestation must be made by a qualified actuary who is a member of the American Academy of Actuaries. Applicants may use qualified outside actuaries, including (but not limited to) actuaries employed by the plan administrator or an insurer providing benefits under the plan. If an applicant uses an outside actuary, the attestation can be submitted directly by the outside actuary or by the plan sponsor.
(3) The attestation must be signed by a qualified actuary and must state that the attestation is true and accurate to the best of the attester's knowledge and belief.
(4) The attestation must contain an acknowledgement that the information being provided in the attestation is being used to obtain Federal funds.
(5)
(ii)
(B) The net value of coverage provided under the sponsor's retiree prescription drug plan must be determined by reducing the gross value of such coverage as determined under paragraph (d)(5)(ii)(A) of this section by the expected premiums paid by Part D eligible individuals who are plan participants or their spouses and dependents. For sponsors of plans that charge a single, integrated premium or contribution to their retirees for both prescription drug coverage and other types of medical coverage, the attestation must allocate a portion of the premium/contribution to prescription drug coverage under the sponsor's plan, under any method determined by the sponsor or its actuary.
(iii)
(B) To calculate the net value of defined standard prescription drug coverage under Part D, the gross value of defined standard prescription drug coverage under Part D as determined by paragraph (d)(5)(iii)(A) of this section is reduced by the following amounts:
(
(
(C) The valuation of defined standard prescription drug coverage for a given plan year is based on the initial coverage limit cost-sharing and out-of-pocket threshold for defined standard prescription drug coverage under Part D in effect at the start of such plan year, not taking into account the value of any discount or coverage provided during the coverage gap.
(D) Example: If a sponsor's retiree prescription drug plan operates under a plan year that ends March 30, the sponsor has a choice of basing the attestation for the year April 1, 2007 through March 30, 2008 on either the initial coverage limit, cost-sharing amounts, and out-of-pocket threshold amounts that apply to defined standard prescription drug coverage under Part D in CY 2007, or the amounts announced for CY 2008. However, in order to use the amounts applicable in CY 2007, the sponsor must submit the attestation within 60 days after the publication of the Part D coverage limits for CY 2008. If the attestation is submitted more than 60 days after the 2008 coverage limits have been published, the CY 2008 coverage limits would apply.
(iv) Employment-based retiree health coverage with two or more benefit options. For the assurance required under paragraph (d)(1)(i) of this section, the assurance must be provided separately for each benefit option for which the sponsor requests a subsidy under this subpart. For the assurance required under paragraph (d)(1)(ii) of this section, the assurance may be provided either separately for each benefit option for which the sponsor provided assurances under paragraph (d)(1)(i) of this section, or in the aggregate for all benefit options (or for a subset of the benefit options).
(6)
(ii) Submission following material change. The attestation must be provided no later than 90 days before the implementation of a material change to the drug coverage of the sponsor's retiree prescription drug plan. For purposes of this clause, the term “material change” means the addition of a benefit option that does not impact the actuarial value of the retiree prescription drug coverage under the sponsor's plan such that it no longer meets the standards set forth in paragraph (d)(1)(i) or (ii) of this section.
(7) Notice of failure to continue to satisfy the actuarial equivalence standards. A sponsor must notify CMS, in a form and manner specified by CMS, no later than 90 days before the implementation of a change to the drug coverage that impacts the actuarial value of the retiree prescription drug coverage under the sponsor's plan such that it no longer meets the standards set forth in paragraph (d)(1)(i) or (ii) of this section.
(e)
(f)
(a)
(2)
(b)
(1) Subject to paragraph (b)(3) of this section, the cost threshold under this section is equal to $250 for plan years that end in 2006.
(2) Subject to paragraph (b)(3) of this section, the cost limit under this section is equal to $5,000 for plan years that end in 2006.
(3) The cost threshold and cost limit specified in paragraphs (b)(1) and (b)(2) of this section, for plan years that end in years after 2006, are adjusted in the same manner as the annual Part D deductible and the annual Part D out-of-pocket threshold are adjusted annually under § 423.104(d)(1)(ii) and (d)(5)(iii)(B), respectively.
(a)
(b)
(1)
(i)
(ii)
(2)
(ii)
(3)
(4)
(ii) Upon receiving this data, CMS adjusts the payments made for the plan year in question in a manner to be specified by CMS.
(5)
(ii)
(c)
(d)
(2) CMS or the OIG may extend the 6-year retention requirement for the records enumerated in paragraph (d)(3) of this section in the event of an ongoing investigation, litigation, or negotiation involving civil, administrative or criminal liability. In addition, the sponsor of the qualified retiree prescription drug plan (or a designee), as applicable, must maintain the records enumerated in paragraph (d)(3) of this section longer than 6 years if it knows or should know that the records are the subject of an ongoing investigation, litigation or negotiation involving civil, administrative or criminal liability.
(3) The records that must be retained are:
(i) Reports and working documents of the actuaries who wrote the attestation submitted in accordance with § 423.884(a).
(ii) All documentation of costs incurred and other relevant information utilized for calculating the amount of the subsidy payment made in accordance with § 423.886, including the underlying claims data.
(iii) Any other records specified by CMS.
(4) CMS may issue additional guidance addressing recordkeeping requirements, including (but not limited to) the use of electronic media.
(a)
(i) The amount of the subsidy payment.
(ii) The actuarial equivalence of the sponsor's retiree prescription drug plan.
(iii) If an enrollee in a retiree prescription drug plan is a qualifying covered retiree; or
(iv) Any other similar determination (as determined by CMS) that affects eligibility for, or the amount of, a subsidy payment.
(2)
(3)
(4)
(5)
(6)
(7)
(b)
(1)
(2)
(3)
(ii) The hearing is conducted by a CMS hearing officer who neither receives testimony nor accepts any new evidence that was not presented with the reconsideration request. The CMS hearing officer is limited to the review of the record that was before CMS when CMS made both its initial and reconsideration determinations.
(iii) If CMS did not issue a written reconsideration decision, the hearing officer may request, but not require, a written statement from CMS or its contractors explaining CMS' determination, or CMS or its contractors may, on their own, submit the written statement to the hearing officer. Failure of CMS to submit a written statement does not result in any adverse findings against CMS and may not in any way be taken into account by the hearing officer in reaching a decision.
(4)
(5)
(c)
(2) The Administrator may review the hearing officer's decision, any written documents submitted to CMS or to the hearing officer, as well as any other information included in the record of the hearing officer's decision and determine whether to uphold, reverse or modify the hearing officer's decision.
(3) The Administrator's determination is final and binding.
(d)
(i) Within 1 year of the date of the notice of determination for any reason.
(ii) Within 4 years for good cause.
(iii) At any time when the underlying decision was obtained through fraud or similar fault.
(2)
(ii) Notice of reopening specifies the reasons for revision.
(3)
(i) The sponsor requests reconsideration in accordance with paragraph (a) of this section;
(ii) A timely request for a hearing is filed under paragraph (b) of this section;
(iii) The determination is reviewed by the Administrator in accordance with paragraph (c) of this section; or
(iv) The determination is reopened and revised in accordance with paragraph (d) of this section.
(4)
(i) New and material evidence exists that was not readily available at the time the initial determination was made;
(ii) A clerical error in the computation of payments was made; or
(iii) The evidence that was considered in making the determination clearly shows on its face that an error was made.
(5) For purposes of this section, CMS does not find good cause if the only reason for reopening is a change of legal interpretation or administrative ruling upon which the initial determination was made.
(6) A decision by CMS not to reopen an initial or reconsidered determination is final and binding and cannot be appealed.
(a)
(1)
(2)
(3)
(b)
(c)
(d)
(e)
Nothing in this part must be interpreted as prohibiting or restricting:
(a) A Part D eligible individual who is covered under employment-based retiree health coverage, including a qualified retiree prescription drug plan, from enrolling in a Part D plan;
(b) A sponsor or other person from paying all or any part of the monthly beneficiary premium (as defined in § 423.286) for a Part D plan on behalf of a retiree (or his or her spouse or dependents);
(c) A sponsor from providing coverage to Part D eligible individuals under employment-based retiree health coverage that is—
(1) Supplemental to the benefits provided under a Part D plan; or
(2) Of higher actuarial value than the actuarial value of standard prescription drug coverage (as defined in § 423.104(d)); or
(d) Sponsors from providing for flexibility in the benefit design and pharmacy network for their qualified retiree prescription drug coverage, without regard to the requirements applicable to Part D plans under § 423.104, as long as the requirements under § 423.884 are met.
(a)
(b)
The following definitions apply to this subpart:
(1) State rate setting documentation for drug costs to the full dual eligible population;
(2) State encounter and enrollment record databases including cost data; and
(3) State managed care plan-specific financial cost data; and
(4) Other appropriate data.
(1) The gross base year (calendar year 2003) per capita Medicaid expenditures for prescription drugs, reduced by the rebate adjustment factor; and
(2) The estimated actuarial value of prescription drug benefits provided under a comprehensive capitated Medicaid managed care plan per full-benefit dual eligible for 2003. The per capita payments for full-benefit dual eligibles with comprehensive managed care and non-managed care are weighted by the respective average monthly full dual eligible enrollment populations reported through the Medicaid Statistical Information System (MSIS).
(1) Has coverage for the month under a prescription drug plan under Part D of title XVIII, or under an MA-PD plan under Part C of title XVIII; and
(2) Is determined eligible by the State for medical assistance for full benefits under title XIX for the month under any eligibility category covered under the State plan or comprehensive benefits under a demonstration under section 1115 of the Act. (This does not include individuals under Pharmacy Plus demonstrations or under a section 1115 of the Act demonstration that provides pharmacy only benefits to these individuals.) It also includes any individual who is determined by the State to be eligible for medical assistance under section 1902(a)(10)(C) of the Act (medically needy) or section 1902(f) of the Act (States that use more restrictive eligibility criteria than are used by the SSI program) of the Act for any month if the individual was eligible for
(1) Multiplied by the State medical assistance percentage;
(2) Increased for each year (beginning with 2004 up to and including the year involved) by the applicable growth factor;
(3) Multiplied by the number of the State's full-benefit dual eligible individuals for the given month; and
(4) Multiplied by the phased-down State contribution factor.
(a)
(b)
(c)
(1) Screen individuals who apply for subsidies under this part for eligibility for Medicaid programs that provide assistance with Medicare cost-sharing specified in section 1905(p)(3) of the Act.
(2) Offer enrollment for the programs under the State plan (or under a waiver
(d)
(i) Low-income subsidy application forms;
(ii) Information on the nature of, and eligibility requirements for, the subsidies under this section; and
(iii) Assistance with completion of low-income subsidy application forms.
(2)
(i) Complete all required elements of the application and provide documents, as necessary, consistent with paragraph (d)(3) of this section; and
(ii) Certify, under penalty of perjury or similar sanction for false statements, as to the accuracy of the information provided on the application form.
(3)
(ii) May require that information submitted on the application be subject to verification in a manner the State determines to be most cost-effective and efficient.
(4)
(a)
(b)
(1) Part D drugs; or
(2) Any cost-sharing obligations under Part D relating to Part D drugs.
(3) The effective date of paragraphs (b)(1) and (b)(2) of this section is January 1, 2006.
(c)
(a)
(2) A territory may submit a plan to the Secretary under which medical assistance is to be provided to low-income individuals for the provision of covered Part D drugs.
(3) Territories with plans approved by the Secretary will receive increased grants under section 1935(e)(3) of the Act as described in paragraph (c) of this section.
(b)
(1) A description of the medical assistance to be
provided.
(2) The low-income population (income less than 150
percent of the Federal poverty level) to receive medical assistance.
(3) An assurance that no more than 10 percent of the
amount of the increased grant will be used for administrative expenses.
(c)
(1) The number of individuals who are entitled to benefits under Part A or enrolled under Part B and who reside in the territory (as determined by the Secretary based on the most recent available data for the beginning of the year); and
(2) The sum of the number of individuals in all territories in paragraph (c)(1) of this section with approved plans.
(d)
(1) For the last three quarters of fiscal year 2006, $28,125,000;
(2) For fiscal year 2007, $37,500,000; and
(3) For each subsequent year, the amount for the prior fiscal year increased by the annual percentage increase described in § 423.104(d)(5)(iv).
This subpart sets forth the requirements for State contributions for Part D drug benefits based on full-benefit dual eligible individual drug expenditures.
(a)
(b)
(1)
(2)
(c)
(d)
(e)
(f)
(g)
(a)
(2) Section 1857 (g) of the Act provides that, for Part D sponsors found to be out of compliance with the requirements in part 423, specified remedies may be imposed instead of, or in addition to, termination of the Part D sponsor's contract. Section 1857(g)(4) of the Act makes certain provisions of section 1128A of the Act applicable to civil money penalties imposed on Part D sponsors.
(b) [Reserved]
As used in this subpart—
(a)
(b)
(a)
(2) Part D sponsors may request judicial review of the Departmental Appeals Board's decision that imposes a CMP.
(b) [Reserved]
(a) An affected party may appoint as its representative anyone not disqualified or suspended from acting as a representative in proceedings before the Secretary or otherwise prohibited by law.
(b) If the representative appointed is not an attorney, the party must file written notice of the appointment with the ALJ or the Departmental Appeals Board.
(c) If the representative appointed is an attorney, the attorney's statement that he or she has the authority to represent the party is sufficient.
(a) A representative appointed and qualified in accordance with 423.1008 may, on behalf of the represented party—
(1) Give and accept any notice or request pertinent to the proceedings set forth in this part;
(2) Present evidence and allegations as to facts and law in any proceedings affecting that party to the same extent as the party; and
(3) Obtain information to the same extent as the party.
(b) A notice or request may be sent to the affected party, to the party's representative, or to both. A notice or request sent to the representative has the same force and effect as if it had been sent to the party.
Fees for any services performed on behalf of an affected party by an attorney appointed and qualified in accordance with 423.1008 are not subject to the provisions of section 206 of Title II of the Act, which authorizes the Secretary to specify or limit those fees.
A party that requests a transcript of prehearing or hearing proceedings or Board review must pay the actual or estimated cost of preparing the transcript unless, for good cause shown by that party, the payment is waived by the ALJ or the Departmental Appeals Board, as appropriate.
(a)
(b)
(2) The ALJ or the Board will grant an opportunity to reply to the rebuttal
(a)
(b)
(1) The affected party requests a hearing; or
(2) CMS revises its decision.
(a)
(2) The Part D sponsor or its legal representative or other authorized official must file the request, in writing, to the appropriate Departmental Appeals Board office, with a copy to CMS, within 60 calendar days from receipt of the notice of initial determination, to request a hearing before an ALJ to appeal any determination by CMS to impose a civil money penalty.
(b)
(1) Identify the specific issues, and the findings of fact and conclusions of law with which the affected party disagrees; and
(2) Specify the basis for each contention that a CMS finding or conclusion of law is incorrect.
The parties to the hearing are the affected party and CMS, as appropriate.
(a) The Chair of the Departmental Appeals Board, or his or her delegate, designates an ALJ or a member or members of the Departmental Appeals Board to conduct the hearing.
(b) If appropriate, the Chair or the delegate may substitute another ALJ or another member or other members of the Departmental Appeals Board to conduct the hearing.
(c) As used in this part, “ALJ” includes a member or members of the Departmental Appeals Board who are designated to conduct a hearing.
(a) An ALJ may not conduct a hearing in a case in which he or she is prejudiced or partial to the affected party or has any interest in the matter pending for decision.
(b) A party that objects to the ALJ designated to conduct the hearing must give notice of its objections at the earliest opportunity.
(c) The ALJ will consider the objections and decide whether to withdraw or proceed with the hearing.
(1) If the ALJ withdraws, another ALJ will be designated to conduct the hearing.
(2) If the ALJ does not withdraw, the objecting party may, after the hearing, present its objections to the Departmental Appeals Board as reasons for changing, modifying, or reversing the ALJ's decision or providing a new hearing before another ALJ.
(a) At any time before the hearing, the ALJ may call a prehearing conference for the purpose of delineating the issues in controversy, identifying the evidence and witnesses to be presented at the hearing, and obtaining stipulations accordingly.
(b) On the request of either party or on his or her own motion, the ALJ may adjourn the prehearing conference and reconvene at a later date.
(a)
(b)
(c)
(1) Either party gives timely notice to that effect to the ALJ and the other party; or
(2) The ALJ raises the issues in the notice of prehearing conference or at the conference.
(a) The prehearing conference is open to the affected party or its representative, to the CMS representatives and their technical advisors, and to any other persons whose presence the ALJ considers necessary or proper.
(b) The ALJ may accept the agreement of the parties as to the following:
(1) Facts that are not in controversy.
(2) Questions that have been resolved favorably to the affected party after the determination in dispute.
(3) Remaining issues to be resolved.
(c) The ALJ may request the parties to indicate the following:
(1) The witnesses that will be present to testify at the hearing.
(2) The qualifications of those witnesses.
(3) The nature of other evidence to be submitted.
(a)
(2) The record may be transcribed at the request of either party or the ALJ.
(b)
(2) Copies of the order are sent to all parties and the parties have 10 calendar days to file objections to the order.
(3) After the 10 calendar days have elapsed, the ALJ settles the order.
(c)
(a) The ALJ fixes a time and place for the hearing and gives the parties written notice at least 10 calendar days before the scheduled date.
(b) The notice informs the parties of the general and specific issues to be resolved at the hearing.
(a) The ALJ may change the time and place for the hearing either on his or her own initiative or at the request of a party for good cause shown, or may adjourn or postpone the hearing.
(b) The ALJ may reopen the hearing for receipt of new evidence at any time before mailing the notice of hearing decision.
(c) The ALJ gives the parties reasonable notice of any change in time or place or any adjournment or reopening of the hearing.
When two or more affected parties have requested hearings and the same or substantially similar matters are at issue, the ALJ may, if all parties agree, fix a single time and place for the prehearing conference or hearing and conduct all proceedings jointly. If joint hearings are held, a single record of the proceedings is made and a separate decision issued with respect to each affected party.
(a)
(2) The ALJ may consider new issues even if CMS has not made initial determinations on them, and even if they arose after the request for hearing was filed or after a prehearing conference.
(3) The ALJ may give notice of hearing on new issues at any time after the hearing request is filed and before the hearing record is closed.
(b)
(2) After giving notice, the ALJ will, except as provided in paragraph (c) of this section, proceed to hearing on new issues in the same manner as on an issue raised in the request for hearing.
(c)
(a)
(b)
(c)
(1) Identify the witnesses or documents to be produced;
(2) Describe their addresses or location with sufficient particularity to permit them to be found; and
(3) Specify the pertinent facts the party expects to establish by the witnesses or documents, and indicate why those facts could not be established without use of a subpoena.
(d)
(a)
(b)
(2) If the ALJ believes that there is relevant and material evidence available which has not been presented at the hearing, he may, at any time before mailing of notice of the decision, reopen the hearing to receive that evidence.
(3) The ALJ decides the order in which the evidence and the arguments of the parties are presented and the conduct of the hearing.
(4) CMS has the burden of coming forward with evidence related to disputed findings that is sufficient (together with any undisputed findings and legal authority) to establish a prima facie case that CMS has a legally sufficient basis for its determination.
(5) The affected party has the burden of coming forward with evidence sufficient to establish the elements of any affirmative argument or defense which it offers.
(6) The affected party bears the ultimate burden of persuasion. To prevail, the affected party must prove by a preponderance of the evidence on the record as a whole that there is no basis for the determination.
(c)
(1) Set a penalty of zero or reduce a penalty to zero, or
(2) Review the exercise of discretion by CMS to impose a civil money penalty.
Evidence may be received at the hearing even though inadmissible under the rules of evidence applicable to court procedure. The ALJ rules on the admissibility of evidence.
Witnesses at the hearing testify under oath or affirmation. The representative of each party is permitted to examine his or her own witnesses
The parties to a hearing are allowed a reasonable time to present oral summation and to file briefs or other written statements of proposed findings of fact and conclusions of law. Copies of any briefs or other written statements must be sent in accordance with 423.1016.
A complete record of the proceedings at the hearing is made and transcribed in all cases.
(a)
(2) If the affected party wishes to withdraw a waiver, it may do so, for good cause, at any time before the ALJ mails notice of the hearing decision.
(b)
(1) The ALJ believes that the testimony of the affected party or its representatives or other witnesses is necessary to clarify the facts at issue.
(2) CMS shows good cause for requiring the presentation of oral evidence.
(c)
(d)
(1) Make a record of the relevant written evidence that was considered in making the determination being appealed, and of any additional evidence submitted by the parties;
(2) Furnish to each party copies of the additional evidence submitted by the other party; and
(3) Give both parties a reasonable opportunity for rebuttal.
(e)
(a) The ALJ may, at any time before mailing the notice of the decision, dismiss a hearing request if a party withdraws its request for a hearing or the affected party asks that its request be dismissed.
(b) An affected party may request a dismissal by filing a written notice with the ALJ.
(a) The ALJ may dismiss a request for hearing if it is abandoned by the party that requested it.
(b) The ALJ may consider a request for hearing to be abandoned if the party or its representative—
(1) Fails to appear at the prehearing conference or hearing without having previously shown good cause for not appearing; and
(2) Fails to respond, within 10 calendar days after the ALJ sends a “show cause” notice, with a showing of good cause.
On his or her own motion, or on the motion of a party to the hearing, the ALJ may dismiss a hearing request either entirely or as to any stated issue, under any of the following circumstances:
(a)
(b)
(c)
(a) Notice of the ALJ's dismissal action is mailed to the parties. The notice advises the affected party of its right to request that the dismissal be vacated as provided in 423.1066.
(b) The dismissal of a request for hearing is binding unless it is vacated by the ALJ or the Departmental Appeals Board.
An ALJ may vacate any dismissal of a request for hearing if a party files a request to that effect within 60 calendar days from receipt of the notice of dismissal and shows good cause for vacating the dismissal.
(a)
(b)
(1) A party requests review by the Departmental Appeals Board within the time period specified in 423.1076, and the Board reviews the case;
(2) The Departmental Appeals Board denies the request for review and the party seeks judicial review by filing an action in a United States District Court or, in the case of a civil money penalty, in a United States Court of Appeals;
(3) The decision is revised by an ALJ or the Department Appeals Board; or
(4) The decision is a recommended decision directed to the Board.
(a) At any time before the ALJ receives oral testimony, the Board may remove to itself any pending request for a hearing.
(b) Notice of removal is mailed to each party.
(c) The Board conducts the hearing in accordance with the rules that apply to ALJ hearings under this subpart.
(a) If CMS requests remand, and the affected party concurs in writing or on the record, the ALJ may remand any case properly before him or her to CMS for a determination satisfactory to the affected party.
(b) The ALJ may remand at any time before notice of hearing decision is mailed.
Either of the parties has a right to request Departmental Appeals Board review of the ALJ's decision or dismissal order, and the parties are so informed in the notice of the ALJ's action.
(a)
(2) The requesting party or its representative or other authorized official must file the request with the DAB within 60 calendar days from receipt of the notice of decision or dismissal, unless the Board, for good cause shown by the requesting party, extends the time for filing.
(b)
(a)
(b)
(1) The affected party requests dismissal of its request for review.
(2) The affected party did not file timely or show good cause for late filing.
(3) The affected party does not have a right to review.
(4) A previous determination or decision, based on the same facts and law, and regarding the same issue, has become final through judicial affirmance or because the affected party failed to timely request reconsideration, hearing, Board review, or judicial review, as appropriate.
(c)
(d)
The parties are given, upon request, a reasonable opportunity to file briefs or other written statements as to fact and law, and to appear before the Departmental Appeals Board to present evidence or oral arguments. Copies of any brief or other written statement must be sent in accordance with 423.1016.
(a) The Departmental Appeals Board may admit evidence into the record in addition to the evidence introduced at the ALJ hearing, (or the documents considered by the ALJ if the hearing was waived), if the Board considers that the additional evidence is relevant and material to an issue before it.
(b) If it appears to the Board that additional relevant evidence is available, the Board will require that it be produced.
(c) Before additional evidence is admitted into the record—
(1) Notice is mailed to the parties (unless they have waived notice) stating that evidence will be received regarding specified issues; and
(2) The parties are given a reasonable time to comment and to present other evidence pertinent to the specified issues.
(d) If additional evidence is presented orally to the Board, a transcript is prepared and made available to any party upon request.
(a) When the Departmental Appeals Board reviews an ALJ's decision or order of dismissal, or receives a case remanded by a court, the Board may either issue a decision or remand the case to an ALJ for a hearing and decision or a recommended decision for final decision by the Board.
(b) In a remanded case, the ALJ initiates additional proceedings and takes other actions as directed by the Board in its order of remand, and may take other action not inconsistent with that order.
(c) Upon completion of all action called for by the remand order and any other consistent action, the ALJ promptly makes a decision or, as specified by the Board, certifies the case to the Board with a recommended decision.
(d) The parties have 20 calendar days from the date of a notice of a recommended decision to submit to the Board any exception, objection, or comment on the findings of fact, conclusions of law, and recommended decision.
(e) After the 20-calendar day period, the Board issues its decision adopting, modifying or rejecting the ALJ's recommended decision.
(f) If the Board does not remand the case to an ALJ, the following rules apply:
(1) The Board's decision—
(i) Is based upon the evidence in the hearing record and any further evidence that the Board receives during its review;
(ii) Is in writing and contains separate numbered findings of fact and conclusions of law; and
(iii) May modify, affirm, or reverse the ALJ's decision.
(2) A copy of the Board's decision is mailed to each party.
(a)
(1) The affected party has a right to judicial review and timely files a civil action in a United States District Court or, in the case of a civil money penalty, in a United States Court of Appeals; or
(2) The Board reopens and revises its decision in accordance with 423.1092.
(b)
(c)
(a) Any affected party that is dissatisfied with an Departmental Appeals Board decision and is entitled to judicial review must commence civil action within 60 calendar days from receipt of the notice of the Board's decision, unless the Board extends the time in accordance with paragraph (c) of this section.
(b) The request for extension must be filed in writing with the Board before the 60-calendar day period ends.
(c) For good cause shown, the Board may extend the time for commencing civil action.
(a)
(b)
(2) A decision of an ALJ may be reopened by that ALJ, by another ALJ if that one is not available, or by the Departmental Appeals Board. For purposes of this paragraph, an ALJ is considered to be unavailable if the ALJ has died, terminated employment, or been transferred to another duty station, is on leave of absence, or is unable to conduct a hearing because of illness.
(a) Revision based on new evidence. If a reopened decision is to be revised on the basis of new evidence that was not included in the record of that decision, the ALJ or the Departmental Appeals Board—
(1) Notifies the parties of the proposed revision; and
(2) Unless the parties waive their right to hearing or appearance—
(i) Grants a hearing in the case of an ALJ revision; and
(ii) Grants opportunity to appear in the case of a Board revision.
(b)
(2) If the decision is revised by an ALJ, the Departmental Appeals Board may review that revised decision at the request of either party or on its own motion.
(a)
(b)
(2)
This subpart sets forth the requirements relating to the following:
(a) Part D sponsors, the Part D IRE, ALJs, and the MAC with respect to reopenings.
(b) ALJs with respect to hearings.
(c) MAC with respect to review of Part D appeals.
(d) Part D enrollees' rights with respect to reopenings, ALJ hearings, MAC reviews, and judicial review by a Federal District Court.
(a) If the amount remaining in controversy after the IRE reconsideration meets the threshold requirement established annually by the Secretary, an enrollee who is dissatisfied with the IRE reconsideration determination has a right to a hearing before an ALJ.
(b) If the basis for the appeal is the refusal by the Part D plan sponsor to provide drug benefits, CMS uses the projected value of those benefits to compute the amount remaining in controversy. The projected value of a Part D drug or drugs shall include any costs the enrollee could incur based on the number of refills prescribed for the drug(s) in dispute during the plan year.
(c)
(i) The appeals have previously been reconsidered by an IRE;
(ii) The request for ALJ hearing lists all of the appeals to be aggregated and each aggregated appeal meets the filing requirement specified in § 423.1972(b); and
(iii) The ALJ determines that the appeals the enrollee seeks to aggregate involve the delivery of prescription drugs to a single enrollee.
(2)
(i) The appeals have previously been reconsidered by an IRE;
(ii) The request for ALJ hearing lists all of the appeals to be aggregated and each aggregated appeal meets the filing requirement specified in § 423.1972(b); and
(iii) The ALJ determines that the appeals the enrollees seek to aggregate involve the same prescriptiion.
(a)
(b)
(c)
(2) If, after a hearing is initiated, the ALJ finds that the amount in controversy is less than the amount required under § 423.1970, the ALJ discontinues the hearing and does not rule on the substantive issues raised in the appeal.
An enrollee who is dissatisfied with an ALJ hearing decision may request that the MAC review the ALJ's decision or dismissal as provided in § 423.2102.
(a)
(1) The MAC denied the enrollee's request for review; and
(2) The amount in controversy meets the threshold requirement established annually by the Secretary.
(b)
(c)
(a) A coverage determination or redetermination made by a Part D plan sponsor, a reconsideration made by the independent review entity specified in § 423.600, or the decision of an ALJ or the MAC that is otherwise binding may be reopened and revised by the entity that made the determination or decision as provided in § 423.1980 through § 423.1986.
(b) The filing of a request for reopening does not relieve the Part D plan sponsor of its obligation to make payment or provide benefits as specified in § 423.636 or § 423.638 of this chapter.
(c) Once an entity issues a revised determination or decision, the revisions made by the decision may be appealed.
(d) A decision not to reopen by the Part D plan sponsor or any other entity is not subject to review.
(a)
(i) A Part D plan sponsor to revise the coverage determination or redetermination;
(ii) An IRE to revise the reconsideration;
(iii) An ALJ to revise the hearing decision; or
(iv) The MAC to revise the hearing or review decision.
(2) When an enrollee has filed a valid request for an appeal of a coverage determination, redetermination, reconsideration, hearing, or MAC review, no adjudicator has jurisdiction to reopen an issue that is under appeal until all appeal rights for that issue are exhausted. Once the appeal rights for the issue have been exhausted, the Part D plan sponsor, IRE, ALJ, or MAC may reopen as set forth in this section.
(3) Consistent with § 423.1978(b), the filing of a request for reopening does not relieve the Part D plan sponsor of its obligation to make payment or provide benefits as specified in § 423.636 or § 423.638.
(4) Consistent with § 423.1978(d), the Part D plan sponsor's, IRE's, ALJ's, or MAC's decision on whether to reopen is binding and not subject to appeal.
(5) A determination under the Medicare secondary payer provisions of section 1862(b) of the Act that Medicare has an MSP recovery claim for drug claims that were already reimbursed by the Part D plan sponsor is not a reopening.
(b)
(1) Within 1 year from the date of the coverage determination or redetermination for any reason.
(2) Within 4 years from the date of the coverage determination or redetermination for good cause as defined in § 423.1986.
(3) At any time if there exists reliable evidence as defined in § 405.902 of this chapter that the coverage determination was procured by fraud or similar fault as defined in § 405.902.
(c)
(2) An enrollee may request that a Part D plan sponsor reopen its coverage determination or redetermination within 4 years from the date of the coverage determination or redetermination for good cause in accordance with § 423.1986.
(d)
(2) An ALJ or the MAC may reopen a hearing decision on its own motion within 180 calendar days from the date of the decision for good cause in accordance with § 423.1986. If the hearing decision was procured by fraud or similar fault, then the ALJ or the MAC may reopen at any time.
(3) The MAC may reopen its review decision on its own motion within 180 calendar days from the date of the review decision for good cause in accordance with § 423.1986. If the MAC's decision was procured by fraud or similar fault, then the MAC may reopen at any time.
(e)
(2) An enrollee who received an ALJ hearing decision or a Part D plan sponsor may request that an ALJ or the MAC reopen the hearing decision within 180 calendar days from the date of the hearing decision for good cause in accordance with § 423.1986.
(3) An enrollee who received a MAC decision or a Part D plan sponsor may request that the MAC reopen its decision within 180 calendar days from the date of the review decision for good cause in accordance with § 423.1986.
(a)
(1) The Part D plan sponsor, IRE, ALJ, or the MAC must mail its revised determination or decision to the enrollee at his or her last known address.
(2) The IRE, ALJ, or the MAC must mail its revised determination or decision to the Part D plan sponsor.
(3) An adverse revised determination or decision must state the rationale and basis for the reopening and revision and any right to appeal.
(b)
(2) The IRE, ALJ, or the MAC must mail its revised determination or decision to the Part D plan sponsor.
(3) An adverse revised determination or decision must state the rationale and basis for the reopening and revision and any right to appeal.
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(a)
(1) There is new and material evidence that—
(i) Was not available or known at the time of the determination or decision; and
(ii) May result in a different conclusion; or
(2) The evidence that was considered in making the determination or decision clearly shows on its face that an obvious error was made at the time of the determination or decision.
(b)
(2) An adjudicator may reopen a determination or decision to apply the current law or CMS or the Part D plan sponsor policy rather than the law or CMS or the Part D plan sponsor policy at the time the coverage determination is made in situations where the enrollee has not yet received the drug and the current law or CMS or the Part D plan sponsor policy may affect whether the drug should be received.
(c)
(a)
(1) For purposes of this section, a “review entity” means an entity of up to three reviewers who are ALJs or members of the Departmental Appeals Board, as determined by the Secretary.
(2) In order to obtain expedited access to judicial review (EAJR), a review entity must certify that the MAC does not have the authority to decide the question of law or regulation relevant to the matters in dispute and that there is no material issue of fact in dispute.
(3) An enrollee may make a request for EAJR only once with respect to a question of law or regulation for a specific matter in dispute in an appeal.
(b)
(i) An IRE has made a reconsideration determination and the enrollee has filed a request for an ALJ hearing in accordance with § 423.2002 and a final decision, dismissal order, or remand order of the ALJ has not been issued; or
(ii) An ALJ has made a decision and the enrollee has filed a request for MAC review in accordance with § 423.2102 and a final decision, dismissal
(2) The requestor is an enrollee.
(3) The amount remaining in controversy meets the threshold requirements established annually by the Secretary.
(4) If there is more than one enrollee to the hearing or MAC review, each enrollee concurs, in writing, with the request for the EAJR.
(5) There are no material issues of fact in dispute.
(c)
(1) Allege that there are no material issues of fact in dispute and identify the facts that the enrollee considers material and that are not disputed; and
(2) Assert that the only factor precluding a decision favorable to the enrollee is—
(i) A statutory provision that is unconstitutional, or a provision of a regulation that is invalid and specify the statutory provision that the enrollee considers unconstitutional or the provision of a regulation that the enrollee considers invalid; or
(ii) A CMS Ruling that the enrollee considers invalid.
(3) Include a copy of the IRE reconsideration and of any ALJ hearing decision that the enrollee has received;
(4) If the IRE reconsideration or ALJ hearing decision was based on facts that the enrollee is disputing, state why the enrollee considers those facts to be immaterial; and
(5) If the IRE reconsideration or ALJ hearing decision was based on a provision of a law, regulation, or CMS Ruling in addition to the one the enrollee considers unconstitutional or invalid, a statement as to why further administrative review of how that provision applies to the facts is not necessary.
(d)
(2) Time of filing request. The enrollee may file a request for EAJR—
(i) If the enrollee has requested a hearing, at any time before receipt of the notice of the ALJ's decision; or
(ii) If the enrollee has requested MAC review, at any time before receipt of notice of the MAC's decision.
(e)
(2) Within 60 calendar days after the date the review entity receives a request and accompanying documents and materials meeting the conditions in paragraphs (b), (c), and (d) of this section, the review entity will issue either a certification in accordance with paragraph (f) of this section or a denial of the request.
(3) A determination by the review entity either certifying that the requirements for EAJR are met pursuant to paragraph (f) of this section or denying the request is not subject to review by the Secretary.
(4) If the review entity fails to make a determination within the timeframe specified in paragraph (e)(2) of this section, then the enrollee may bring a civil action in Federal District Court within 60 calendar days of the end of the timeframe.
(f)
(1) The material facts involved in the appeal are not in dispute;
(2) Except as indicated in paragraph (f)(3) of this section, the Secretary's interpretation of the law is not in dispute;
(3) The sole issue(s) in dispute is the constitutionality of a statutory provision, or the validity of a provision of a regulation or CMS Ruling;
(4) But for the provision challenged, the enrollee would receive a favorable decision on the ultimate issue; and
(5) The certification by the review entity is the Secretary's final action for purposes of seeking expedited judicial review.
(g)
(1) The enrollee that requested the EAJR is considered to have waived any right to completion of the remaining steps of the administrative appeals process regarding the matter certified.
(2) The enrollee has 60 calendar days, beginning on the date of the review entity's certification within which to bring a civil action in Federal District Court.
(3) The enrollee must satisfy the requirements for venue under section 205(g) of the Act, as well as the requirements for filing a civil action in a Federal District Court under § 423.2136.
(h)
(2) Whenever a review entity forwards a rejected EAJR request to an ALJ hearing office or the MAC, the appeal is considered timely filed and the 90 calendar day decision making timeframe begins on the day the request is received by the hearing office or the MAC.
(a) If an enrollee is dissatisfied with an IRE's reconsideration, the enrollee may request a hearing.
(b) A hearing may be conducted in-person, by video-teleconference, or by telephone. At the hearing, the enrollee may submit evidence subject to the restrictions in § 423.2018, examine the evidence used in making the determination under review, and present and/or question witnesses.
(c) In some circumstances, the Part D plan sponsor, or a representative of CMS, including the IRE, may participate in the hearing as specified in § 423.2010.
(d) The ALJ conducts a de novo review and issues a decision based on the hearing record.
(e) If an enrollee waives his or her right to appear at the hearing in person or by telephone or video-teleconference, the ALJ may make a decision based on the evidence that is in the file and any new evidence that is submitted for consideration.
(f) The ALJ may require the enrollee to participate in a hearing if it is necessary to decide the case. If the ALJ determines that it is necessary to obtain testimony from a person other than the enrollee, he or she may hold a hearing to obtain that testimony, even if the enrollee has waived the right to appear. In that event, however, the ALJ will give the enrollee the opportunity to appear when the testimony is given, but may hold the hearing even if the enrollee decides not to appear.
(g) An ALJ may also issue a decision on the record on his or her own initiative if the evidence in the hearing record supports a fully favorable finding.
(a) Consistent with § 423.1970(a), an enrollee may request a hearing before an ALJ if—
(1) The enrollee files a written request for an ALJ hearing within 60 calendar days after receipt of the written notice of the IRE's reconsideration; and
(2) The enrollee meets the amount in controversy requirements of § 423.1970.
(b) An enrollee may request that the hearing before an ALJ be expedited if:
(1) The appeal involves an issue specified in § 423.566(b) but does not include solely a request for payment of Part D drugs already furnished.
(2) The enrollee submits a written or oral request for an expedited ALJ hearing within 60 calendar days of the date of the written notice of an IRE reconsideration determination. The request can only be submitted after the enrollee receives the written IRE reconsideration notice. The request should also explain why applying the standard timeframe may seriously jeopardize the life or health of the enrollee; and
(3) The enrollee meets the amount in controversy requirements of § 423.1970.
(c) The ALJ must document all oral requests for expedited hearings in writing and maintain the documentation in the case files.
(d) For purposes of this section, the date of receipt of the reconsideration is presumed to be 5 calendar days after the date of the written reconsideration, unless there is evidence to the contrary.
(e) For purposes of meeting the 60 calendar day filing deadline, the request is considered as filed on the date it is received by the entity specified in the IRE's reconsideration.
(a) An enrollee has a right to have an IRE's dismissal of a request for reconsideration reviewed by an ALJ if:
(1) The enrollee files a request for an ALJ review within 60 calendar days after receipt of the written notice of the IRE's dismissal.
(2) The enrollee meets the amount in controversy requirements of § 423.1970.
(3) For purposes of this section, the date of receipt of the IRE's dismissal is presumed to be 5 calendar days after the date of the written dismissal notice, unless there is evidence to the contrary.
(4) For purposes of meeting the 60 calendar day filing deadline, the request is considered as filed on the date it is received by the entity specified in the IRE's dismissal.
(b) If the ALJ determines that the IRE's dismissal was in error, he or she vacates the dismissal and remands the case to the IRE for a reconsideration.
(c) An ALJ's decision regarding an IRE's dismissal of a reconsideration request is binding and not subject to further review. The dismissal of a request for ALJ review of an IRE's dismissal of a reconsideration request is binding and not subject to further review, unless vacated by the MAC under § 423.2108(b).
(a)
(b)
(a) An ALJ may request, but may not require, CMS, the IRE, and/or the Part D plan sponsor to participate in any proceedings before the ALJ, including the oral hearing, if any.
(b) CMS, the IRE, and/or the Part D plan sponsor may request to participate in the hearing process.
(1) For non-expedited hearings, any request by CMS, the IRE, and/or the Part D plan sponsor to participate must be made within 5 calendar days of receipt of the notice of hearing.
(2) Within 5 calendar days of receipt of a request to participate in a non-expedited hearing, the ALJ must notify the entity, the Part D plan sponsor, if applicable and the enrollee of his or her decision on the request to participate.
(3) For expedited hearings, any request by CMS, the IRE, and/or the Part D plan sponsor to participate must be made within 1 calendar day of receipt of the notice of hearing. Requests may be made orally or submitted by facsimile to the hearing office.
(4) Within 1 calendar day of receipt of a request to participate in an expedited hearing, the ALJ must notify the entity, the Part D plan sponsor, if applicable, and the enrollee of his or her decision on the request to participate.
(c) The ALJ has discretion not to allow CMS, the IRE, and/or the Part D plan sponsor to participate.
(d) Participation may include filing position papers or providing written testimony to clarify factual or policy issues in a case, but it does not include calling witnesses or cross-examining the witnesses of an enrollee to the hearing.
(e) When CMS, the IRE, and/or the Part D plan sponsor participates in an ALJ hearing, CMS, the IRE, and/or the Part D plan sponsor may not be called as a witness during the hearing.
(f) CMS, the IRE, and/or the Part D plan sponsor must submit any position papers within the timeframe designated by the ALJ.
(g) The ALJ cannot draw any adverse inferences if CMS, the IRE, and/or the Part D plan sponsor decide not to participate in any proceedings before an ALJ, including the hearing.
(a)
(1) The name, address, telephone number, and Medicare health insurance claim number of the enrollee.
(2) The name, address, and telephone number of the appointed representative, as defined at § 423.560, if any.
(3) The appeals case number assigned to the appeal by the IRE, if any.
(4) The prescription drug in dispute.
(5) The plan name.
(6) The reasons the enrollee disagrees with the IRE's reconsideration.
(7) A statement of any additional evidence to be submitted and the date it will be submitted.
(8) A statement that the enrollee is requesting an expedited hearing, if applicable.
(b)
(c)
(1) Within 60 calendar days from the date the enrollee receives written notice of the IRE's reconsideration.
(2) With the entity specified in the IRE's reconsideration.
(i) If the request for hearing is timely filed with an entity other than the entity specified in the IRE's reconsideration, the deadline specified in § 423.2016 for deciding the appeal begins on the date the entity specified in the IRE's reconsideration receives the request for hearing.
(ii) If the request for hearing is filed with an entity, other than the entity specified in the IRE's reconsideration, the ALJ hearing office must notify the appellant of the date of receipt of the request and the commencement of the adjudication timeframe.
(d)
(2) Any request for an extension of time must be in writing or, for expedited reviews, in writing or oral. The ALJ hearing office must document all oral requests in writing and maintain the documentation in the case file.
(3) The request must give the reasons why the request for a hearing was not filed within the stated time period, and must be filed with the entity specified in the notice of reconsideration.
(4) If the ALJ finds there is good cause for missing the deadline, the time period for filing the hearing request will be extended. To determine whether good cause for late filing exists, the ALJ uses the standards set forth in §§ 405.942(b)(2) and (b)(3) of this chapter.
(5) If a request for hearing is not timely filed, the adjudication period in § 423.2016 begins the date the ALJ grants the request to extend the filing deadline.
(a)
(2) The adjudication period specified in paragraph (a) of this section begins on the date that a timely filed request for hearing is received by the entity
(b)
(2) Grant of a request. If the ALJ grants a request for expedited hearing, the ALJ must—
(i) Make the decision to grant an expedited hearing within 5 calendar days of receipt of the request for expedited hearing;
(ii) Give the enrollee prompt oral notice of this decision; and
(iii) Subsequently send to the enrollee at his or her last known address and to the Part D plan sponsor written notice of the decision. This notice may be provided within the written notice of hearing.
(3) Denial of a request. If the ALJ denies a request for expedited hearing, the ALJ must—
(i) Make this decision within 5 calendar days of receipt of the request for expedited hearing;
(ii) Give the enrollee prompt oral notice of the denial that informs the enrollee of the denial and explains that the ALJ will process the enrollee's request using the 90 calendar day timeframe for non-expedited ALJ hearings; and
(iii) Subsequently send to the enrollee at his or her last known address and to the Part D plan sponsor an equivalent written notice of the decision within 3 calendar days after the oral notice.
(4) A decision on a request for expedited hearing may not be appealed.
(5) Timeframe for adjudication. (i) If the ALJ accepts a request for expedited hearing, the ALJ must issue a written decision, dismissal order or remand, as expeditiously as the enrollee's health condition requires, but no later than the end of the 10 calendar day period beginning on the date the request for hearing is received by the entity specified in the IRE's written notice of reconsideration, unless the 10 calendar day period has been extended as provided in this subpart.
(ii) The adjudication period specified in paragraph (b)(5)(i) of this section begins on the date that a timely provided request for hearing is received by the entity specified in the IRE's reconsideration, or, if it is not timely provided, the date that the ALJ grants any extension to the filing deadline.
(a)
(1) An ALJ will not consider any evidence submitted regarding a change in condition of an enrollee after the appealed coverage determination was made.
(2) An ALJ will remand a case to the Part D IRE where an enrollee wishes evidence on his or her change in condition after the coverage determination to be considered.
(b)
(2) If a represented enrollee submits written evidence later than 10 calendar days after receiving the notice of hearing, the period between the time the evidence was required to have been submitted and the time it is received is not counted toward the adjudication deadline specified in § 423.2016.
(3) The requirements of this subsection do not apply to unrepresented enrollees.
(c)
(2) If an enrollee submits written evidence later than 2 calendar days after receiving the notice of hearing, the period between the time the evidence was required to have been submitted and the time it is received is not counted toward the adjudication deadline specified in § 423.2016.
(d) The requirements of paragraphs (b) and (c) of this section do not apply to oral testimony given at a hearing.
(a)
(b)
(2) The ALJ may also offer to conduct a hearing by telephone if the request for hearing or administrative record suggests that a telephone hearing may be more convenient for the enrollee.
(3) The ALJ, with the concurrence of the Managing Field Office ALJ, may determine that an in-person hearing should be conducted if—
(i) The video-teleconferencing technology is not available; or
(ii) Special or extraordinary circumstances exist.
(c)
(2) The notice of hearing will require the enrollee (and any potential participant from CMS, the IRE, and/or the Part D plan who has requested to participate in the hearing consistent with § 423.2010) to reply to the notice by:
(i) Acknowledging whether they plan to attend the hearing at the time and place proposed in the notice of hearing; or
(ii) Objecting to the proposed time and/or place of the hearing.
(d)
(1) As specified in § 423.2000, the ALJ may require the enrollee to attend a hearing if it is necessary to decide the case.
(2) If the ALJ determines that it is necessary to obtain testimony from a person other than the enrollee, he or she may still hold a hearing to obtain that testimony, even if the enrollee has waived the right to appear. In those cases, the ALJ would give the enrollee the opportunity to appear when the testimony is given but may hold the hearing even if the enrollee decides not to appear.
(e)
(2) The enrollee must state the reason for the objection and state the time and place he or she wants the hearing to be held.
(3) The objection must be in writing except for an expedited hearing when the objection may be provided orally. The ALJ must document all oral objections to the time and place of an expedited hearing in writing and maintain the documentation in the case files.
(4) The ALJ may change the time or place of the hearing if the enrollee has good cause. (Section 423.2052(a)(2) provides the procedures the ALJ follows when an enrollee does not respond to a notice of hearing and fails to appear at the time and place of the hearing.)
(f)
(1) The enrollee or his or her representative is unable to attend or to travel to the scheduled hearing because of a serious physical or mental condition, incapacitating injury, or death in the family; or
(2) Severe weather conditions make it impossible to travel to the hearing; or
(3) Good cause exists as set forth in paragraph (g) of this section.
(g)
(2) Factors evaluated to determine the impact of the change include, but are not limited to, the effect on processing other scheduled hearings, potential delays in rescheduling the hearing, and whether any prior changes were granted the enrollee.
(3) Examples of other circumstances an enrollee might give for requesting a change in the time or place of the hearing include, but are not limited to, the following:
(i) The enrollee has attempted to obtain a representative but needs additional time.
(ii) The enrollee's representative was appointed within 10 calendar days of the scheduled hearing for non-expedited hearings (or 2 calendar days for expedited hearings) and needs additional time to prepare for the hearing.
(iii) The enrollee's representative has a prior commitment to be in court or at another administrative hearing on the date scheduled for the hearing.
(iv) A witness who will testify to facts material to an enrollee's case is unavailable to attend the scheduled hearing and the evidence cannot be otherwise obtained.
(v) Transportation is not readily available for an enrollee to travel to the hearing.
(vi) The enrollee is unrepresented, and is unable to respond to the notice of hearing because of any physical, mental, educational, or linguistic limitations (including any lack of facility with the English language).
(h)
(i)
(2) The enrollee must state the reason for the objection and state the time or place he or she wants the hearing to be held.
(3) The request must be in writing except for an expedited hearing for which the request may be provided orally. The ALJ must document all oral objections to an expedited video-teleconferencing or telephone hearing in writing and maintain the documentation in the case files.
(4) When an enrollee's request for an in-person hearing is granted, the ALJ must issue a decision within the adjudicatory timeframe as specified in § 423.2016 (including any applicable extensions provided in this subpart), unless the enrollee requesting the hearing agrees to waive such adjudication timeframe in writing.
(5) The ALJ may grant the request, with the concurrence of the Managing Field Office ALJ, upon a finding of good cause and will reschedule the hearing for a time and place when the enrollee may appear in person before the ALJ.
(a)
(2) The notice is mailed or served at least 20 calendar days before the hearing, except for expedited hearings where written notice is mailed or served at least 3 calendar days before the hearing. For expedited hearings,
(b)
(2) The notice must include an explanation of the procedures for requesting a change in the time or place of the hearing, a reminder that, if the enrollee fails to appear at the scheduled hearing without good cause, the ALJ may dismiss the hearing request, and other information about the scheduling and conduct of the hearing.
(3) The enrollee will also be told if his or her appearance or that of any other witness is scheduled by video-teleconferencing, telephone, or in person. If the ALJ has scheduled the enrollee to appear at the hearing by video-teleconferencing, the notice of hearing will advise that the scheduled place for the hearing is a video-teleconferencing site and explain what it means to appear at the hearing by video-teleconferencing.
(4) The notice advises the enrollee that if he or she objects to appearing by video-teleconferencing or telephone, and wishes instead to have his or her hearing at a time and place where he or she may appear in person before the ALJ, he or she must follow the procedures set forth at § 423.2020(i) for notifying the ALJ of his or her objections and for requesting an in-person hearing.
(c)
(2) If the enrollee states that he or she did not receive the notice of hearing, an amended notice is sent to him or her by certified mail or, if available, fax or e-mail. See § 423.2052 for the procedures the ALJ follows in deciding if the time or place of a scheduled hearing will be changed if an enrollee does not respond to the notice of hearing).
(a) If an enrollee objects to the issues described in the notice of hearing, he or she must notify the ALJ in writing at the earliest possible opportunity before the time set for the hearing, and no later than 5 calendar days before the hearing, except for expedited hearings in which the enrollee must submit written or oral notice of objection no later than 2 calendar days before the hearing. The ALJ hearing office must document all oral objections in writing and maintain the documentation in the case files.
(b) The enrollee must provide the reasons for his or her objections.
(c) The ALJ makes a decision on the objections either in writing or at the hearing.
(a) An ALJ may not conduct a hearing if he or she is prejudiced or partial to the enrollee or has any interest in the matter pending for decision.
(b) If an enrollee objects to the ALJ who will conduct the hearing, the enrollee must notify the ALJ within 10 calendar days of the date of the notice of hearing, except for expedited hearings in which the enrollee must submit written or oral notice no later than 2 calendar days after the date of the notice of hearing. The ALJ must document all oral objections in writing and maintain the documentation in the case files. The ALJ considers the enrollee's objections and decides whether to proceed with the hearing or withdraw.
(c) If the ALJ withdraws, another ALJ will be appointed to conduct the hearing. If the ALJ does not withdraw, the enrollee may, after the ALJ has issued an action in the case, present his or her objections to the MAC in accordance with § 423.2100 through § 423.2130. The MAC would then consider whether the hearing decision should be revised or a new hearing held before another ALJ.
(a)
(b)
(c)
(d)
(a)
(b)
(2)
(3)
(i) Could have a material impact on the issue or issues that are the subject of the request for hearing; and
(ii) Is permissible under the rules governing reopening of determinations and decisions as specified in § 423.1980.
(c)
(a)
(i) Remand the case to the IRE that issued the reconsideration or
(ii) Retain jurisdiction of the case and request that the CMS, the IRE, and/or the Part D plan sponsor forward the missing information to the appropriate hearing office.
(2) If the information is not information that can be provided only by CMS, the IRE, and or the Part D plan sponsor, the ALJ must retain jurisdiction of the case and obtain the information on his or her own, or directly from the enrollee.
(3) “Can be provided only by CMS, the IRE, and/or the Part D plan sponsor” means the information is not publicly available, is not in the possession of the enrollee, and cannot be requested and obtained by the enrollee. Information that is publicly available is information that is available to the general public via the Internet or in a printed publication. It includes, but is not limited to, information available on a CMS, IRE or Part D Plan sponsor website or information in an official CMS or HHS publication.
(b)
(1) Consistent with § 423.2004(b), the ALJ will remand a case to the appropriate IRE if the ALJ determines that an IRE's dismissal of a request for reconsideration was in error.
(2) The ALJ will remand a case to the appropriate Part D IRE if the ALJ determines that the enrollee wishes evidence on his or her change in condition after the coverage determination to be considered in the appeal.
(a)
(2) An enrollee may also make his or her appearance by means of a representative, who may make his or her appearance by video-teleconferencing, telephone, or in person, as determined under § 423.2020.
(3) Witness testimony may be given and CMS, IRE, and Part D plan sponsor participation may also be accomplished by video-teleconferencing, telephone, or in person, as determined under § 423.2020.
(b)
(i) For expedited hearings, an enrollee may indicate in writing or orally that he or she does not wish to appear at the hearing.
(ii) The ALJ hearing office must document all oral waivers in writing and maintain the documentation in the case files.
(2) The enrollee may subsequently withdraw his or her waiver in writing at any time before the notice of the hearing decision is issued; however, by withdrawing the waiver the enrollee agrees to an extension of the adjudication period as specified in § 423.2016, that may be necessary to schedule and hold the hearing.
(3) Even if the enrollee waives his or her right to appear at a hearing, the ALJ may require him or her to attend an oral hearing if the ALJ believes that a personal appearance and testimony by the enrollee is necessary to decide the case.
(c)
(d)
(e)
(f)(1)
(2)
(3)
(i) Upon notice to the ALJ that the enrollee or a non-party, as applicable, intends to seek MAC review of the ALJ's ruling on the subpoena, the ALJ must stay all proceedings affected by the subpoena.
(ii) The proceedings are stayed for 15 calendar days or until the MAC issues a written decision that affirms, reverses, or modifies the ALJ's subpoena, whichever comes first.
(iii) If the MAC does not take action within the 15 calendar days, then the stay is lifted and the enrollee or non-party must comply with the ALJ's subpoena.
(4)
(ii) After submitting the enforcement request, the time period for the ALJ to issue a decision, dismissal or remand a case in response to a request for hearing is stayed for 15 calendar days or until the Secretary makes a decision with respect to the enforcement request, whichever occurs first.
(iii) Any enforcement request by an ALJ must consist of a written notice to the Secretary describing in detail the ALJ's findings of noncompliance and his or her specific request for enforcement, and providing a copy of the subpoena and evidence of its receipt by certified mail by the enrollee or person other than the enrollee subject to the subpoena.
(iv) The ALJ must promptly mail a copy of the notice and related documents to the individual or entity subject to the subpoena, to the enrollee, and to any other affected person.
(g)
(a)
(b)
(i) The enrollee indicates in writing or, for expedited hearings orally or in writing, that he or she does not wish to appear before the ALJ at a hearing, including a hearing conducted by telephone or video teleconferencing, if available. The ALJ hearing office must document all oral requests not to appear at a hearing in writing and maintain the documentation in the case files; or
(ii) The enrollee lives outside the United States and does not inform the ALJ that he or she wants to appear.
(2) When a hearing is not held, the decision of the ALJ must refer to the evidence in the record on which the decision was based.
(a) The ALJ may decide on his or her own, or at the request of the enrollee to the hearing, to hold a prehearing or posthearing conference to facilitate the hearing or the hearing decision.
(b) For non-expedited hearings, the ALJ informs the enrollee of the time, place, and purpose of the conference at least 7 calendar days before the conference date, unless the enrollee indicates in writing that he or she does not wish to receive a written notice of the conference.
(c) For expedited hearings, the ALJ informs the enrollee of the time, place, and purpose of the conference at least 2 calendar days before the conference date, unless the enrollee indicates orally or in writing that he or she does not wish to receive a written notice of the conference.
(d) The ALJ hearing office must document all oral requests not to receive written notice of the conference in writing and maintain the documentation in the case files.
(e) At the conference, the ALJ may consider matters in addition to those stated in the notice of hearing, if the enrollee consents in writing. A record of the conference is made.
(f) The ALJ issues an order stating all agreements and actions resulting
(a)
(2) The record will include marked as exhibits, the documents used in making the decision under review, including, but not limited to, medical records, written statements, certificates, reports, affidavits, and any other evidence the ALJ admits.
(3) An enrollee may review the record at the hearing, or, if a hearing is not held, at any time before the ALJ's notice of decision is issued.
(4) If a request for review is filed, the complete record, including any recording of the hearing, is forwarded to the MAC.
(5) A typed transcription of the hearing is prepared if an enrollee seeks judicial review of the case in a Federal district court within the stated time period and all other jurisdictional criteria are met, unless, upon the Secretary's motion prior to the filing of an answer, the court remands the case.
(b)
(2) If an enrollee requests all or part of the record from the ALJ and an opportunity to comment on the record, the time beginning with the ALJ's receipt of the request through the expiration of the time granted for the enrollee's response does not count toward the adjudication deadline.
(a) A consolidated hearing may be held if one or more of the issues to be considered at the hearing are the same issues that are involved in another request for hearing or hearings pending before the same ALJ.
(b) It is within the discretion of the ALJ to grant or deny an enrollee's request for consolidation. In considering an enrollee's request, the ALJ may consider factors such as whether the issue(s) may be more efficiently decided if the requests for hearing are combined. In considering the enrollee's request for consolidation, the ALJ must take into account the adjudication deadlines for each case and may require an enrollee to waive the adjudication deadline associated with one or more cases if consolidation otherwise prevents the ALJ from deciding all of the appeals at issue within their respective deadlines.
(c) The ALJ may also propose on his or her own motion to consolidate two or more cases in one hearing for administrative efficiency, but may not require an enrollee to waive the adjudication deadline for any of the consolidated cases.
(d) Before consolidating a hearing, the ALJ must notify CMS of his or her intention to do so, and CMS may then elect to participate in the consolidated hearing by sending written notice to the ALJ.
(1) For non-expedited hearings, any request by CMS to participate must be made within 5 calendar days of receipt of the ALJ's notice of the consolidation.
(2) For expedited hearings, any request by CMS to participate must be made within 1 calendar day of receipt of the ALJ's notice of the consolidation. Requests may be made orally or submitted by facsimile to the hearing office.
(e) If the ALJ decides to hold a consolidated hearing, he or she may make either a consolidated decision and record or a separate decision and record on each issue. The ALJ ensures that any evidence that is common to all appeals and material to the common issue to be decided is included in the consolidated record or each individual record, as applicable.
(a)
(1) For expedited hearings, the ALJ issues a written decision within the 10 calendar day adjudication timeframe under § 423.2016(b)(5).
(2) The decision must be based on evidence offered at the hearing or otherwise admitted into the record.
(3) A copy of the decision should be mailed to the enrollee at his or her last known address.
(4) A copy of the written decision should also be provided to the IRE that issued the reconsideration determination, and to the Part D plan sponsor that issued the coverage determination.
(b)
(1) The specific reasons for the determination, including, to the extent appropriate, a summary of any clinical or scientific evidence used in making the determination;
(2) The procedures for obtaining additional information concerning the decision; and
(3) Notification of the right to appeal the decision to the MAC, including instructions on how to initiate an appeal under this section.
(c)
(d)
(e)
The decision of the ALJ is binding unless—
(a) An enrollee requests a review of the decision by the MAC within the stated time period or the MAC reviews the decision issued by an ALJ under the procedures set forth in § 423.2110, and the MAC issues a final decision or remand order;
(b) The decision is reopened and revised by an ALJ or the MAC under the procedures explained in § 423.1980;
(c) The expedited access to judicial review process at § 423.1990 is used;
(d) The ALJ's decision is a recommended decision directed to the MAC and the MAC issues a decision; or
(e) In a case remanded by a Federal District Court, the MAC assumes jurisdiction under the procedures in § 423.2138 and the MAC issues a decision.
If a request for hearing is pending before an ALJ, the MAC may assume responsibility for holding a hearing by requesting that the ALJ send the hearing request. If the MAC holds a hearing, it conducts the hearing according to the rules for hearings before an ALJ. Notice is mailed to the enrollee at his or her last known address informing him or her that the MAC has assumed responsibility for the case.
Dismissal of a request for a hearing is in accordance with the following:
(a)
(1) At any time before notice of the hearing decision is mailed, if the enrollee asks to withdraw the request. This request may be submitted in writing to the ALJ or be made orally at the hearing. The request for withdrawal must include a clear statement that the enrollee is withdrawing the request for hearing and does not intend to further proceed with the appeal. If an attorney or other legal professional on behalf of an enrollee files the request for withdrawal, the ALJ may presume that the representative has advised the enrollee of the consequences of the withdrawal and dismissal.
(2) Neither the enrollee that requested the hearing nor the enrollee's representative appears at the time and place set for the hearing, if—
(i) The enrollee was notified before the time set for the hearing that the request for hearing might be dismissed without further notice for failure to appear; or
(ii) The enrollee did not appear at the time and place of hearing and does not contact the ALJ hearing office within 10 calendar days for non-expedited hearings and 2 calendar days for expedited hearings and provide good cause for not appearing; or
(iii) The ALJ sends a notice to the enrollee asking why the enrollee did not appear; and the enrollee does not respond within 10 calendar days for non-expedited hearings; the ALJ does not receive the enrollee's response within 2 calendar days for expedited hearings or the enrollee does not provide good cause for the failure to appear. For expedited hearings, an enrollee may submit his or her response orally to the ALJ.
(iv) In determining whether good cause exists under paragraph (a)(2) of this section, the ALJ considers any physical, mental, educational, or linguistic limitations (including any lack of facility with the English language) the enrollee may have.
(3) The person requesting a hearing has no right to it under § 423.2002.
(4) The enrollee did not request a hearing within the stated time period and the ALJ has not found good cause for extending the deadline, as provided in § 423.2014(d).
(5) The enrollee died while the request for hearing is pending and the request for hearing was filed by the enrollee or the enrollee's representative, and the enrollee's surviving spouse or estate has no remaining financial interest in the case and the enrollee's representative, if any, does not want to continue the appeal.
(6) The ALJ dismisses a hearing request entirely or refuses to consider any one or more of the issues because an IRE, an ALJ or the MAC has made a previous determination or decision under this subpart about the enrollee's rights on the same facts and on the same issue(s), and this previous determination or decision has become binding by either administrative or judicial action.
(7) The enrollee abandons the request for hearing. An ALJ may conclude that an enrollee has abandoned a request for hearing when the ALJ hearing office attempts to schedule a hearing and is unable to contact the enrollee after making reasonable efforts to do so.
(8) Consistent with § 423.1972(c)(1), the ALJ dismisses a hearing request if a request clearly shows that the amount in controversy is less than that required under § 423.1970.
(b)
(c)
The dismissal of a request for a hearing is binding, unless it is vacated by the MAC under § 423.2108(b).
(a) ALJs and the MAC are not bound by CMS program guidance, such as program memoranda and manual instructions, but will give substantial deference to these policies if they are applicable to a particular case.
(b) If an ALJ or MAC declines to follow a policy in a particular case, the ALJ or MAC decision must explain the reasons why the policy was not followed. An ALJ or MAC decision to disregard a policy applies only to the specific coverage determination being considered and does not have precedential effect.
(a) All laws and regulations pertaining to the Medicare programs, including, but not limited to Titles XI, XVIII, and XIX of the Social Security Act and applicable implementing regulations, are binding on ALJs and the MAC.
(b) CMS Rulings are published under the authority of the CMS Administrator. Consistent with § 401.108 of this chapter, rulings are binding on all CMS components, and on all HHS components that adjudicate matters under the jurisdiction of CMS.
(a) Consistent with § 423.1974, the enrollee may request that the MAC review an ALJ's decision or dismissal.
(b) When the MAC reviews an ALJ's written decision, it undertakes a de novo review.
(c) The MAC issues a final decision, dismissal order, or remands a case no later than the end of the 90 calendar period beginning on the date the request for review is received (by the entity specified in the ALJ's written notice of decision), unless the 90 calendar day period is extended as provided in this subpart or the enrollee requests expedited MAC review.
(d) If an enrollee requests expedited MAC review, the MAC issues a final decision, dismissal order or remand as expeditiously as the enrollee's health condition requires, but no later than the end of the 10 calendar day period beginning on the date the request for review is received (by the entity specified in the ALJ's written notice of decision), unless the 10 calendar day period is extended as provided in this subpart.
(a)(1) An enrollee to the ALJ hearing may request a MAC review if the enrollee files a written request for a MAC review within 60 calendar days after receipt of the ALJ's written decision or dismissal.
(2) An enrollee may request that MAC review be expedited if the appeal involves an issue specified in § 423.566(b) but does not include solely a request for payment of Part D drugs already furnished.
(i) If an enrollee is requesting that the MAC review be expedited, the enrollee submits an oral or written request within 60 calendar days after the receipt of the ALJ's written decision or dismissal. A prescribing physician or other prescriber may provide oral or written support for an enrollee's request for expedited review.
(ii) The MAC must document all oral requests for expedited review in writing and maintain the documentation in the case files.
(3) For purposes of this section, the date of receipt of the ALJ's written decision or dismissal is presumed to be 5 calendar days after the date of the notice of the decision or dismissal, unless there is evidence to the contrary.
(4) The request is considered as filed on the date it is received by the entity specified in the notice of the ALJ's action.
(b) An enrollee requesting a review may ask that the time for filing a request for MAC review be extended if—
(1) The request for an extension of time is in writing or, for expedited reviews, in writing or oral. The MAC must document all oral requests in writing and maintain the documentation in the case file.
(2) The request explains why the request for review was not filed within the stated time period. If the MAC finds that there is good cause for missing the deadline, the time period will be extended. To determine whether good cause exists, the MAC uses the standards outlined at § 405.942(b)(2) and § 405.942(b)(3).
(c) An enrollee does not have the right to seek MAC review of an ALJ's remand or an ALJ's affirmation of an IRE's dismissal of a request for reconsideration.
When a request for a MAC review is filed after an ALJ has issued a written decision or dismissal, the request for review must be submitted to the entity specified in the notice of the ALJ's action. If the request for review is timely filed with an entity other than the entity specified in the notice of the ALJ's action, the MAC's adjudication period to conduct a review begins on the date the request for review is received by the entity specified in the notice of the ALJ's action. Upon receipt of a request for review from an entity other than the entity specified in the notice of the ALJ's action, the MAC sends written notice to the enrollee of the date of receipt of the request and commencement of the adjudication timeframe.
(a)
(b)
(c)
(d)
(2)
(i) Make this decision within 5 calendar days of receipt of the request for expedited review;
(ii) Give the enrollee prompt oral notice of this decision; and
(iii) Issue a decision, dismissal order or remand, as expeditiously as the enrollee's health condition requires, but no later than the end of the 10 calendar day period beginning on the date the request for review is received by the entity specified in the ALJ's written notice of decision.
(3)
(i) Make this decision within 5 calendar days of receipt of the request for expedited review;
(ii) Give the enrollee and Part D plan sponsor within 5 calendar days of receiving the request written notice of
(4)
(a)
(b)
(i) CMS or the IRE participated or requested to participate in the appeal at the ALJ level; and
(ii) In CMS' or the IRE's view, the ALJ's decision or dismissal is not supported by the preponderance of evidence in the record or the ALJ abused his or her discretion.
(2) CMS' or the IRE's referral to the MAC is made in writing and must be filed with the MAC no later than 60 calendar days after the ALJ's written decision or dismissal is issued.
(i) The written referral will state the reasons why CMS or the IRE believes that the MAC should review the case on its own motion.
(ii) CMS or the IRE will send a copy of its referral to the enrollee and to the ALJ.
(iii) The enrollee may file exceptions to the referral by submitting written comments to the MAC within 20 calendar days of the referral notice.
(iv) An enrollee submitting comments to the MAC must send the comments to CMS or the IRE.
(c)
(2)
(d)
(2) The MAC may adopt, modify, or reverse the decision or dismissal, may remand the case to an ALJ for further proceedings or may dismiss a hearing request.
(3) The MAC must issue its action no later than 90 calendar days after receipt of the CMS or the IRE referral, unless the 90 calendar day period has been extended as provided in this subpart.
(4) The MAC may not issue its action before the 20 calendar day comment period has expired, unless it determines that the agency's referral does not provide a basis for reviewing the case.
(5) If the MAC declines to review a decision or dismissal on its own motion, the ALJ's decision or dismissal is binding.
(a)(1) The request for MAC review must be filed with the entity specified in the notice of the ALJ's action.
(2) The request for review must be in writing and may be made on a standard form, except for requests for expedited reviews which may be made orally.
(3) The MAC must document all oral requests in writing and maintain the documentation in the case file.
(4) A written request that is not made on a standard form or, for expedited requests, an oral request, is accepted if it includes the enrollee's name and telephone number, the plan name; Medicare health insurance claim number; the ALJ appeal number; the specific Part D drug(s) for which the review is requested; a statement that the enrollee is requesting an expedited review, if applicable; and the name and signature of the enrollee or the representative of the enrollee.
(b) The request for review must identify the parts of the ALJ action with which the enrollee requesting review disagrees and explain why he or she disagrees with the ALJ's decision, dismissal, or other determination being appealed.
(c) The MAC will limit its review of an ALJ's actions to those exceptions raised by the enrollee in the request for review, unless the enrollee is unrepresented. For purposes of this section only, a representative is either anyone with a valid appointment as the enrollee's representative or is a member of the enrollee's family, a legal guardian or an individual who routinely acts on behalf of the enrollee, such as a family member or friend who has a power of attorney.
The MAC dismisses a request for review if the enrollee requesting review did not file the request within the stated period of time and the time for filing has not been extended. The MAC also dismisses the request for review if—
(a) The enrollee asks to withdraw the request for review;
(b) The individual or entity does not have a right to request MAC review; or
(c) The enrollee died while the request for review is pending and the enrollee's estate or representative, if any, either has no remaining financial interest in the case or does not want to continue the appeal.
The dismissal of a request for MAC review or denial of a request for review of a dismissal issued by an ALJ is binding and not subject to further review unless reopened and vacated by the MAC. The MAC's dismissal of a request for hearing is also binding and not subject to judicial review.
An enrollee may request and receive a copy of all or part of the record of the ALJ hearing, including the exhibits list, documentary evidence, and a copy of the CD of the oral proceedings. However, the enrollee may be asked to pay the costs of providing these items. If an enrollee requests evidence from the MAC and an opportunity to comment on that evidence, the time beginning with the MAC's receipt of the request for evidence through the expiration of the time granted for the enrollee's response will not be counted toward the adjudication deadline.
Upon request, the MAC will give the enrollee requesting review a reasonable opportunity to file a brief or other written statement about the facts and law relevant to the case. Unless the enrollee requesting review files the brief or other statement with the request for review, the time beginning with the date of receipt of the request to submit the brief and ending with the date the brief is received by the MAC will not be counted toward the adjudication timeframe set forth in § 423.2100. The MAC may also request, but not require, CMS, the IRE, and/or the Part D plan sponsor to file a brief or position paper if the MAC determines that it is necessary to resolve the issues in the case. The MAC cannot draw any adverse inference if CMS, the IRE, and/or the
(a)
(2) If the MAC determines that additional evidence is needed to resolve the issues in the case and the hearing record indicates that the previous decision-makers have not attempted to obtain the evidence, the MAC may remand the case to an ALJ to obtain the evidence and issue a new decision.
(3) The MAC will not consider any new evidence submitted regarding a change in condition of an enrollee after a coverage determination is made. The MAC will remand a case to the Part D IRE if the MAC determines that the enrollee wishes to have evidence on his or her change in condition after the coverage determination considered.
(b)
(1) To the extent a subpoena compels disclosure of a matter for which an objection based on privilege, or other protection from disclosure such as case preparation, confidentiality or undue burden, was made before the MAC, the Secretary may review immediately that subpoena or a portion of the subpoena.
(2) Upon notice to the MAC that an enrollee or Part D plan sponsor intends to seek the Secretary review of the subpoena, the MAC must stay all proceedings affected by the subpoena, tolling the time period for the MAC to issue a final action or remand a case in response to a request for review for 15 calendar days or until the Secretary makes a decision with respect to the review request, whichever occurs first.
(3) If the Secretary does not grant review within the time allotted for the stay, the stay is lifted and the subpoena stands.
(c)
(2) After submitting the enforcement request, the time period for the MAC to issue a final action or remand a case in response to a request for review is stayed for 15 calendar days or until the Secretary makes a decision with respect to the enforcement request, whichever occurs first.
(3) Any enforcement request by the MAC must consist of a written notice to the Secretary describing in detail the MAC's findings of noncompliance and its specific request for enforcement, and providing a copy of the subpoena and evidence of its receipt by certified mail by the enrollee or other person or entity subject to the subpoena.
(4) The MAC must promptly mail a copy of the notice and related documents to the enrollee or other person or entity subject to the subpoena, and to any other affected person.
An enrollee may request to appear before the MAC to present oral argument.
(a) The MAC grants a request for oral argument if it decides that the case raises an important question of law, policy, or fact that cannot be readily decided based on written submissions alone.
(b) The MAC may decide on its own that oral argument is necessary to decide the issues in the case. If the MAC decides to hear oral argument, it informs the enrollee of the time and place of the oral argument at least 10 calendar days before the scheduled date or, in the case of an expedited review, at least 2 calendar days before the scheduled date.
(c) In case of a previously unrepresented enrollee, a newly hired representative may request an extension of time for preparation of the oral argument and the MAC must consider whether the extension is reasonable.
(d) The MAC may also request, but not require, CMS, the IRE, and/or the Part D plan sponsor to appear before it if the MAC determines that it may be helpful in resolving the issues in the case.
(e) The MAC cannot draw any adverse inference if CMS, the IRE, and/or the Part D plan sponsor decide not to participate in the oral argument.
(a)
(2)
(3)
(4)
(ii) All other rules for filing briefs with and obtaining evidence from the MAC follow the procedures explained in this subpart.
(5)
(ii) If the MAC determines that more evidence is required, it may again remand the case to an ALJ for further inquiry into the issues, rehearing, receipt of evidence, and another decision or recommended decision. However, if the MAC decides that it can get the additional evidence more quickly, it will take appropriate action.
(b)
(a) After it has reviewed all the evidence in the administrative record and any additional evidence received, subject to the limitations on MAC consideration of additional evidence in § 423.2122, the MAC will make a decision or remand the case to an ALJ.
(b) The MAC may adopt, modify, or reverse the ALJ hearing decision or recommended decision.
(c) The MAC mails a copy of its decision to the enrollee at his or her last known address, to CMS, to the IRE, and to the Part D plan sponsor.
The MAC's decision is final and binding unless a Federal District Court issues a decision modifying the MAC's decision or the decision is revised as the result of a reopening in accordance with § 423.1980. An enrollee may file an action in a Federal District Court
(a) An enrollee may request that the time for filing an action in a Federal District Court be extended.
(b) The request must:
(1) Be in writing.
(2) Give the reasons why the action was not filed within the stated time period.
(3) Be filed with the MAC.
(c) If the enrollee shows that he or she had good cause for missing the deadline, the time period will be extended. To determine whether good cause exists, the MAC uses the standards specified in §§ 405.942(b)(2) or (b)(3) of this chapter.
(a)
(b)
(2) If the enrollee does not reside within any judicial district, the civil action must be filed in the District Court of the United States for the District of Columbia.
(c)
(2) For purposes of this section, the date of receipt of the notice of the MAC's decision shall be presumed to be 5 calendar days after the date of the notice, unless there is a reasonable showing to the contrary.
(3) Where a case is certified for judicial review in accordance with the expedited access to judicial review process in § 423.1990, the civil action must be filed within 60 calendar days after receipt of the review entity's certification, except where the time is extended by the ALJ or MAC, as applicable, upon a showing of good cause.
(d)
(2) If the complaint is erroneously filed against the United States or against any agency, officer, or employee of the United States other than the Secretary, the plaintiff enrollee will be notified that he or she has named an incorrect defendant and is granted 60 calendar days from the date of receipt of the notice in which to commence the action against the correct defendant, the Secretary.
(e)
(2) When the Secretary's decision is adverse to an enrollee due to an enrollee's failure to submit proof in conformity with a regulation prescribed under section 205(a) of the Act pertaining to the type of proof an enrollee must offer to establish entitlement to payment, the court will review only whether the proof conforms with the regulation and the validity of the regulation.
When a Federal District Court remands a case to the Secretary for further consideration, unless the court order specifies otherwise, the MAC, acting on behalf of the Secretary, may make a decision, or it may remand the case to an ALJ with instructions to take action and either issue a decision, take other action, or return the case to the MAC with a recommended decision. If the MAC remands a case, the procedures specified in § 423.2140 will be followed.
(a)
(2) The MAC may assume jurisdiction based on written exceptions to the decision of the ALJ that an enrollee files with the MAC or based on its authority under paragraph (c) of this section.
(3) The MAC either makes a new, independent decision based on the entire record that will be the final decision of the Secretary after remand, or remands the case to an ALJ for further proceedings.
(b)
(2) Exceptions may be filed by submitting a written statement to the MAC setting forth the reasons for disagreeing with the decision of the ALJ.
(i) The enrollee must file exceptions within 30 calendar days of the date the enrollee receives the decision of the ALJ or submit a written request for an extension within the 30 calendar day period.
(ii) The MAC will grant a timely request for a 30 calendar day extension. A request for an extension of more than 30 calendar days must include a statement of reasons as to why the enrollee needs the additional time and may be granted if the MAC finds good cause under the standard established in §§ 405.942(b)(2) or (b)(3) of this chapter.
(3) If written exceptions are timely filed, the MAC considers the enrollee's reasons for disagreeing with the decision of the ALJ. If the MAC concludes that there is no reason to change the decision of the ALJ, it will issue a notice addressing the exceptions and explaining why no change in the decision of the ALJ is warranted. In this instance, the decision of the ALJ is the final decision of the Secretary after remand.
(4) When an enrollee files written exceptions to the decision of the ALJ, the MAC may assume jurisdiction at any time. If the MAC assumes jurisdiction, it makes a new, independent decision based on its consideration of the entire record adopting, modifying, or reversing the decision of the ALJ or remanding the case to an ALJ for further proceedings, including a new decision. The new decision of the MAC is the final decision of the Secretary after remand.
(c)
(2) Notice of this action is mailed to the enrollee at his or her last known address.
(3) The enrollee will be provided with the opportunity to file a brief or other written statement with the MAC about the facts and law relevant to the case.
(4) After the brief or other written statement is received or the time allowed (usually 30 calendar days) for submitting them has expired, the MAC will either issue a final decision of the Secretary affirming, modifying, or reversing the decision of the ALJ, or remand the case to an ALJ for further proceedings, including a new decision.
(d)
As used in this subpart—
(1) Promote the Part D plan.
(2) Inform Medicare beneficiaries that they may enroll, or remain enrolled in a Part D plan.
(3) Explain the benefits of enrollment in a Part D plan, or rules that apply to enrollees.
(4) Explain how Medicare services are covered under a Part D plan, including conditions that apply to such coverage.
(5) May include, but are not limited to—
(i) General audience materials such as general circulation brochures, newspapers, magazines, television, radio, billboards, yellow pages, or the Internet.
(ii) Marketing representative materials such as scripts or outlines for telemarketing or other presentations.
(iii) Presentation materials such as slides and charts.
(iv) Promotional materials such as brochures or leaflets, including materials for circulation by third parties (for example, physicians or other providers).
(v) Membership communication materials such as membership rules, subscriber agreements, member handbooks and wallet card instructions to enrollees.
(vi) Letters to members about contractual changes; changes in providers, premiums, benefits, plan procedures etc.
(vii) Membership activities (for example, materials on rules involving non-payment of premiums, confirmation of enrollment or disenrollment, or nonclaim-specific notification information).
(6) Marketing materials exclude ad hoc enrollee communications materials, meaning informational materials that—
(i) Are targeted to current enrollees;
(ii) Are customized or limited to a subset of enrollees or apply to a specific situation;
(iii) Do not include information about the plan's benefit structure; and
(iv) Apply to a specific situation or cover member-specific claims processing or other operational issues.
(a)
(i) At least 45 days (or 10 days if using certain types of marketing materials that use, without modification, proposed model language and format, including standardized language and formatting, as specified by CMS) before the date of distribution, the Part D sponsor submits the material or form to CMS for review under the guidelines in § 423.2264 of this subpart; and
(ii) CMS does not disapprove the distribution of new material or form.
(2) [Reserved]
(b)
(c)
(d)
In reviewing marketing material or enrollment forms under § 423.2262, CMS determines (unless otherwise specified in additional guidance) that the marketing materials—
(a) Provide, in a format (and, where appropriate, print size), and using standard terminology that may be specified by CMS, the following information to Medicare beneficiaries interested in enrolling:
(1) Adequate written description of rules (including any limitations on the providers from whom services can be obtained), procedures, basic benefits and services, and fees and other charges;
(2) Adequate written explanation of the grievance and appeals process, including differences between the two, and when it is appropriate to use each; and
(3) Any other information necessary to enable beneficiaries to make an informed decision about enrollment.
(b) Notify the general public of its enrollment period in an appropriate manner, through appropriate media, throughout its service area.
(c) Include in the written materials notice that the Part D plan is authorized by law to refuse to renew its contract with CMS, that CMS also may refuse to renew the contract, and that termination or non-renewal may result in termination of the beneficiary's enrollment in the Part D plan. In addition, the Part D plan may reduce its service area and no longer be offered in the area where a beneficiary resides.
(d) Ensure that materials are not materially inaccurate or misleading or otherwise make material misrepresentations.
(e) For markets with a significant non-English speaking population, provide materials in the language of these individuals. Specifically, Part D plan sponsors must translate marketing materials into any non-English language that is the primary language of at least 5 percent of the individuals in a plan benefit package (PBP) service area.
If CMS has not disapproved the distribution of marketing materials or forms submitted by a Part D sponsor for a Part D plan in a Part D region, CMS is deemed to not have disapproved the distribution of the marketing material or form in all other Part D regions covered by the Part D plan, with the exception of any portion of the material or form that is specific to the Part D region.
In conducting marketing activities, a Part D plan may not—
(a) Provide cash or other remuneration as an inducement for enrollment or otherwise.
(b) Offer gifts to potential enrollees, unless the gifts are of nominal (as defined in the CMS Marketing Guidelines) value, are offered to all potential enrollees without regard to whether or not the beneficiary enrolls, and are not in the form of cash or other monetary rebates.
(c) Engage in any discriminatory activity such as, for example, attempts to recruit Medicare beneficiaries from higher income areas without making comparable efforts to enroll Medicare beneficiaries from lower income areas.
(d) Solicit door-to-door for Medicare beneficiaries or through other unsolicited means of direct contact, including calling a beneficiary without the beneficiary initiating the contact.
(e) Engage in activities that could mislead or confuse Medicare beneficiaries, or misrepresent the Part D sponsor or its Part D plan. The Part D organization may not claim that it is recommended or endorsed by CMS or Medicare or that CMS or Medicare recommends that the beneficiary enroll in the Part D plan. The Part D organization may explain that the organization is approved for participation in Medicare.
(f) Market non-health care related products to prospective enrollees during any MA or Part D sales activity or presentation. This is considered cross-selling and is prohibited.
(g) Market any health care related product during a marketing appointment beyond the scope agreed upon by the beneficiary, and documented by the plan, prior to the appointment.
(h) Market additional health related lines of plan business not identified prior to an in-home appointment without a separate appointment that may not be scheduled until 48 hours after the initial appointment.
(i) Distribute marketing materials for which, before expiration of the 45-day period, the PDP Sponsor receives from CMS written notice of disapproval because it is inaccurate or misleading, or misrepresents the PDP Sponsor, its marketing representatives, or CMS.
(j) Use providers, provider groups, or pharmacies to distribute printed information for beneficiaries to use when comparing the benefits of different Part D plans unless providers, provider groups or pharmacies accept and display materials from all Part D plan sponsors with which the providers, provider groups or pharmacies contract. The use of publicly available comparison information is permitted if approved by CMS in accordance with the Medicare marketing guidelines.
(k) Conduct sales presentations or distribute and accept Part D plan enrollment forms in provider offices, pharmacies or other areas where health care is delivered to individuals, except in the case where such activities are conducted in common areas in health care settings.
(l) Conduct sales presentations or distribute and accept plan applications at educational events.
(m) Employ Part D plan names that suggest that a plan is not available to all Medicare beneficiaries.
(n) Display the names and/or logos of co-branded network providers on the organization's member identification card. Other marketing materials (as defined in § 423.2260) that include names and/or logos of provider co-branding partners must clearly indicate that other providers are available in the network.
(o) Engage in any other marketing activity prohibited by CMS in its marketing guidance.
(p) Provide meals for potential enrollees, which are prohibited, regardless of value.
(q) Use a plan name that does not include the plan type. The plan type should be included at the end of the plan name.
At 76 FR 54634, Sept. 1, 2011, § 423.2268 was amended by revising paragraphs (g) and (h), effective October 31, 2011. For the convenience of the user, the revised text is set forth as follows:
(g) Market any health care related product during a marketing appointment beyond the scope agreed upon by the beneficiary, and documented by the plan, prior to the appointment (48 hours in advance, when practicable).
(h) Market additional health related lines of plan business not identified prior to an individual appointment without a separate scope of appointment identifying the additional lines of business to be discussed.
In its marketing, the Part D organization must—
(a) Demonstrate to CMS's satisfaction that marketing resources are allocated to marketing to the disabled Medicare population as well as beneficiaries age 65 and over.
(b) Establish and maintain a system for confirming that enrolled beneficiaries have in fact enrolled in the PDP and understand the rules applicable under the plan.
(c) Employ as marketing representatives only individuals who are licensed by the State to conduct direct marketing activities (as defined in the Medicare Marketing Guidelines) in that State, and whom the sponsor has informed that State it has appointed, consistent with the appointment process provided for under State law.
(d) Report to the State in which the MAO appoints an agent or broker, the termination of any such agent or broker, including the reasons for such termination if State law requires that the reasons for the termination be reported.
(e) Terminate upon discovery any unlicensed agent or broker employed as a marketing representative and notify any beneficiaries enrolled by an unqualified agent or broker of the agent's or broker's status and, if requested, of their options to confirm enrollment or
For purposes of this section “compensation” includes pecuniary or nonpecuniary remuneration of any kind relating to the sale or renewal of a policy including, but not limited to, commissions, bonuses, gifts, prizes, awards, and finder's fees. “Compensation” does not include the payment of fees to comply with State appointment laws, training, certification, and testing costs; reimbursement for mileage to, and from, appointments with beneficiaries; or reimbursement for actual costs associated with beneficiary sales appointments such as venue rent, snacks, and materials. If a Part D sponsor markets through independent (that is, non-employee) brokers or agents, the requirements in paragraph (a) of this section must be met. The requirements in paragraphs (b) through (e) of this section must be met if a Part D sponsor markets through any broker or agent, whether independent (that is, non-employee) or employed.
(a) Agents and brokers must be compensated as follows:
(1) A Part D sponsor (or other entity on its behalf) may provide compensation to a broker or agent for the sale of a Part D plan only if the following requirements are met:
(i) The compensation amount paid to the broker or agent for an initial enrollment of a Medicare beneficiary into a PDP in 2009 is either one of the following:
(A) The compensation paid by the Part D sponsor in the area for an initial enrollment for the plan type in question in 2006, adjusted by the average change in Part D rates as published by CMS in the Part D rate announcement; or
(B) A compensation amount commensurate with the market rate for initial enrollments paid by (or on behalf of) Part D sponsors offering plans in the geographic area for the plan type in question during 2006 and 2007, adjusted by the average change in Part D rates as published in the Part D rate announcement by CMS.
(ii) For 2010 and subsequent years, the compensation amount paid to an agent or broker for enrollment of a Medicare beneficiary into PDP is:
(A) For an initial enrollment, the prior year's initial compensation adjusted by the change in Part D rates that CMS announces each year.
(B) For renewals, an amount equal to 50 percent of the initial compensation in (A) above.
(iii) The broker or agent is paid a renewal compensation for each of the next 5 years the enrollee remains in the plan in an amount equal to 50 percent of the initial year compensation paid (creating a 6-year compensation cycle). For purposes of paragraph (a)(1)(i), individuals enrolling in a PDP in 2009 are initially deemed to be in the first renewal year (the second year) in the 6-year cycle. With respect to an individual identified by the PDP sponsor as in an Initial Enrollment Period (IEP) or subsequently identified by CMS as in an IEP or new to the Part D program, the individual is considered to be in the initial year of the 6-year cycle. The PDP Sponsor must adjust the compensation paid for these new enrollees from renewal compensation to the amount that would have been paid for an initial enrollment under the 6-year compensation structure initiated in the year the enrollment occurred.
(iv) If the Part D sponsor contracts with a third party entity such as a Field Management Organization or similar type entity to sell its insurance products or perform services (for example, training, customer service, or agent recruitment), the amount paid to the third party must be fair-market value and must not exceed an amount that is commensurate with the amounts paid by the PDP organization to a third party for similar services during each of the previous 2 years.
(2) [Reserved]
(3) No entity shall provide aggregate compensation to its agents or brokers and no agent or broker shall receive aggregate compensation greater than the renewal compensation payable by the replacing plan on renewal policies
(i) For purposes of this section, “like plan type” means PDP replaced with another PDP, MA or MA-PD replaced with another MA or MA-PD, or cost plan replaced with another cost plan.
(ii) Replacements between different plan types (for which a new compensation is paid) include—PDP and MA-PD, PDP and cost plans, or MA-PD and cost plans.
(iii) When a PDP is added to an MA-only plan, a new commission would be paid for the enrollment in the PDP during the first year.
(4) Compensation shall be earned for months 4 through 12 of the enrollment year.
(i) Plans may pay agents and brokers up-front or prorate compensation payments over 12 months or over months 4 through 12, but
(ii) When a beneficiary disenrolls from the plan, the plan must recover all compensation paid: for months in which the beneficiary is not enrolled; and during months 1 through 3 if the beneficiary disenrolls during the first three months.
(5) Organizations and sponsors must establish a compensation structure for new and replacement enrollments and renewals effective in a given plan year. Compensation structures must be in place by the beginning of the marketing period, October 1.
(6) Compensation structures must be available upon CMS request including for audits, investigations, and to resolve complaints.
(b) It must ensure that all agents selling Medicare products are trained annually, through a CMS endorsed or approved training program or as specified by CMS, on Medicare rules and regulations specific to the plan products they intend to sell.
(c) It must ensure agents selling Medicare products are tested annually by CMS endorsed or approved training program or as specified by CMS.
(d) Upon CMS' request, the organization must provide to CMS, in a form consistent with current CMS guidance, the information necessary for it to conduct oversight of marketing activities.
(e) It must comply with State requests for information about the performance of a licensed agent or broker as part of a state investigation into the individual's conduct. CMS will establish and maintain a memorandum of understanding (MOU) to share compliance and oversight information with States that agree to the MOU.
At 76 FR 54635, Sept. 1, 2011, § 423.2274 was amended by revising paragraphs (a)(1)(ii) introductory text, (a)(1)(ii)(B), (a)(1)(iv), and (a)(4), effective October 31, 2011. For the convenience of the user, the revised text is set forth as follows:
(a) * * *
(1) * * *
(ii) The compensation amount paid to an agent or broker for enrollment of a Medicare beneficiary into a PDP is as follows:
(B) For renewals, an amount equal to 50 percent of the initial compensation in paragraph (a)(1)(ii)(A) of this section.
(iv) If the Part D sponsor contracts with a third party entity such as a Field Marketing Organization or similar type entity to sell its insurance products or perform services (for example, training, customer service, or agent recruitment)—
(A) The total amount paid by the Part D sponsor to the third party and its agents for enrollment of a beneficiary into a plan, if any, must be made in accordance with paragraph (a)(1) of this section; and
(B) The amount paid to the third party for services other than selling insurance products, if any, must be fair-market value and must not exceed an amount that is commensurate with the amounts paid by the Part D sponsor to a third party for similar services during each of the previous 2 years.
(4) Compensation may only be paid for the beneficiary's months of enrollment during a plan year (that is, January through December).
(i) Subject to paragraph (a)(4)(ii) of this section, compensation payments may be
(ii) When a beneficiary disenrolls from a plan during the—
(A) First 3 months of enrollment, the plan must recover all compensation paid to agents and brokers.
(B) Fourth through 12th month of their enrollment (within a single plan year), the plan must recover compensation paid to agents and brokers for those months of the plan year for which the beneficiary is not enrolled.
Part D sponsors may develop marketing materials designed for members of an employer group who are eligible for employer-sponsored benefits through the Part D sponsor, and furnish these materials only to the group members. These materials are not subject to CMS prior review and approval.
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
(a)
1814—Basic conditions for, and limitations on, Medicare payments for Part A services.
1815—Payment to providers for Part A services.
1820—Conditions for designating certain hospitals as critical assess hospitals.
1833(e)—Requirement to furnish information to determine payment.
1834(a)—Payment for durable medical equipment.
1834(j)—Requirements for suppliers of medical equipment and supplies.
1835—Procedures for payment to providers for Part B services.
1842(b)(3)(B)(ii)—Assignment of Part B Medicare claims.
1842(b)(6)—Payment to entities other than the supplier.
1848—Payment for physician services.
1870(e) and (f)—Settlement of claims after death of the beneficiary.
(2) Section 424.444(c) is also based on section 216(j) of the Act.
(b)
(1) The requirement that the need for services be certified and that a physician establish a plan of treatment (subpart B);
(2) The procedures and time limits for filing claims (subpart C);
(3) The individuals or entities to whom payment may be made (subparts D and E);
(4) The limitations on assignment and reassignment of claims (subpart F);
(5) Special requirements that apply to services furnished by nonparticipating U.S. hospitals and foreign hospitals (subparts G and H); and
(6) The replacement and reclamation of Medicare payment checks (subpart M).
(c)
As used in this part, unless the context indicates otherwise—
ICD-9-CM means International Classification of Diseases, Ninth Revision, Clinical Modification.
(a) As a basis for Medicare payment, the following conditions must be met:
(1)
(i) Covered services, as specified in part 409 or part 410 of this chapter; or
(ii) Services excluded from coverage as custodial care or services not reasonable and necessary, but reimbursable in accordance with §§ 405.332 through 405.334 of this chapter, pertaining to limitation of liability.
(2)
(3)
(4)
(5)
(6)
(b) Additional conditions applicable in certain circumstances or to certain
(a)
(1)
(2)
(ii)
(b)
(a)
(b)
(a)
(1) Obtain the required certification and recertification statements;
(2) Keep them on file for verification by the intermediary, if necessary; and
(3) Certify, on the appropriate billing form, that the statements have been obtained and are on file.
(b)
(c)
(d)
(2) A hospital or SNF may provide for obtaining a certification or recertification earlier than required by these regulations, or vary the time frame (within the prescribed outer limits) for different diagnostic or clinical categories.
(3) Delayed certification and recertification statements are acceptable when there is a legitimate reason for delay. (For instance, the patient was unaware of his or her entitlement when he or she was treated.) Delayed certification and recertification statements must include an explanation of the reason for the delay.
(4) A delayed certification may be included with one or more recertifications on a single signed statement.
(e)
(1) A physician who is a doctor of medicine or osteopathy.
(2) A dentist in the circumstances specified in § 424.13(c).
(3) A doctor of podiatric medicine if his or her certification is consistent with the functions he or she is authorized to perform under State law.
(4) A nurse practitioner or clinical nurse specialist, as defined in paragraph (e)(5) or (e)(6) of this section, in the circumstances specified in § 424.20(e).
(5) For purposes of this section, to qualify as a nurse practitioner, an individual must—
(i) Be a registered professional nurse who is currently licensed to practice nursing in the State where he or she practices; be authorized to perform the services of a nurse practitioner in accordance with State law; and have a master's degree in nursing;
(ii) Be certified as a nurse practitioner by a professional association recognized by CMS that has, at a minimum, eligibility requirements that meet the standards in paragraph (e)(5)(i) of this section; or
(iii) Meet the requirements for a nurse practitioner set forth in paragraph (e)(5)(i) of this section, except for the master's degree requirement, and have received before August 25, 1998 a certificate of completion from a formal advanced practice program that prepares registered nurses to perform an expanded role in the delivery of primary care.
(6) For purposes of this section, to qualify as a clinical nurse specialist, an individual must—
(i) Be a registered professional nurse who is currently licensed to practice nursing in the State where he or she practices; be authorized to perform the services of a clinical nurse specialist in accordance with State law; and have a master's degree in a defined clinical area of nursing;
(ii) Be certified as a clinical nurse specialist by a professional association recognized by CMS that has at a minimum, eligibility requirements that meet the standards in paragraph (e)(6)(i) of this section; or
(iii) Meet the requirements for a clinical nurse specialist set forth in paragraph (e)(6)(i) of this section, except for the master's degree requirement, and have received before August 25, 1998 a certificate of completion from a formal advanced practice program that prepares registered nurses to perform an expanded role in the delivery of primary care.
(a)
(1) The reasons for either—
(i) Continued hospitalization of the patient for medical treatment or medically required inpatient diagnostic study; or
(ii) Special or unusual services for cost outlier cases (under the prospective payment system set forth in subpart F of part 412 of this chapter).
(2) The estimated time the patient will need to remain in the hospital.
(3) The plans for posthospital care, if appropriate.
(b)
(2) If this is the basis for the physician's certification or recertification, the required statement must so indicate; and the physician is expected to continue efforts to place the patient in a participating SNF as soon as a bed becomes available.
(c)
(2)
(d)
(2) The first recertification is required no later than as of the 18th day of hospitalization.
(3) Subsequent recertifications are required at intervals established by the UR committee (on a case-by-case basis if it so chooses), but no less frequently than every 30 days.
(e)
(1) For day-outlier cases, certification is required no later than one day after the hospital reasonably assumes that the case meets the outlier criteria, established in accordance with § 412.80(a)(1)(i) of this chapter, or no later than 20 days into the hospital stay, whichever is earlier. The first and subsequent recertifications are required at intervals established by the UR committee (on a case-by-case basis if it so chooses) but not less frequently than every 30 days.
(2) For cost-outlier cases, certification is required no later than the date on which the hospital requests cost outlier payment or 20 days into the hospital stay, whichever is earlier. If possible, certification must be made before the hospital incurs costs for which it will seek cost outlier payment. In cost outlier cases, the first and subsequent recertifications are required at intervals established by the UR committee (on a case-by-case basis if it so chooses).
(f)
(2) A utilization review that is used to fulfill the recertification requirement is considered timely if performed no later than the seventh day after the day the physician recertification would have been required. The next physician recertification would need to be made no later than the 30th day following such review; if review by the UR committee took the place of this physician recertification, the review could be performed as late as the seventh day following the 30th day.
(g)
(a)
(b)
(1) For treatment that could reasonably be expected to improve the patient's condition; or
(2) For diagnostic study.
(c)
(i) For treatment that could reasonably be expected to improve the patient's condition; or
(ii) For diagnostic study; and
(2) The hospital records show that the services furnished were—
(i) Intensive treatment services;
(ii) Admission and related services necessary for diagnostic study; or
(iii) Equivalent services.
(3) The patient continues to need, on a daily basis, active treatment furnished directly by or requiring the supervision of inpatient psychiatric facility personnel.
(d)
(2) The first recertification is required as of the 12th day of hospitalization. Subsequent recertifications are required at intervals established by the UR committee (on a case-by-case basis if it so chooses), but no less frequently than every 30 days.
(e)
(a)
(b)
(a)
(b)
(1) The certification is required no later than September 12;
(2) The first recertification is required no later than September 18; and
(3) Subsequent recertifications are required at least every 30 days after September 18.
Medicare Part A pays for posthospital SNF care furnished by an SNF, or a hospital or CAH with a swing-bed approval, only if the certification and recertification for services are consistent with the content of paragraph (a) or (c) of this section, as appropriate.
(a)
(i) The individual needs or needed on a daily basis skilled nursing care (furnished directly by or requiring the supervision of skilled nursing personnel) or other skilled rehabilitation services
(ii) The individual has been correctly assigned to one of the Resource Utilization Groups designated as representing the required level of care, as provided in § 409.30 of this chapter.
(2)
(b)
(2)
(c)
(2) The estimated time the individual will need to remain in the SNF;
(3) Plans for home care, if any; and
(4) If appropriate, the fact that continued services are needed for a condition that arose after admission to the SNF and while the individual was still under treatment for the condition for which he or she had received inpatient hospital services.
(d)
(2) Subsequent recertifications are required at least every 30 days after the first recertification.
(e)
(1) The physician responsible for the case or, with his or her authorization, by a physician on the SNF staff or a physician who is available in case of an emergency and has knowledge of the case; or
(2) A physician extender (that is, a nurse practitioner, a clinical nurse specialist, or a physician assistant as those terms are defined in section 1861(aa)(5) of the Act) who does not have a direct or indirect employment relationship with the facility but who is working in collaboration with a physician. For purposes of this section—
(i)
(B) The services are delivered within the scope of the physician extender's professional expertise, with medical direction and appropriate supervision as provided for in guidelines jointly developed by the physician extender and the physician or other mechanisms defined by Federal regulations and the law of the State in which the services are performed.
(ii)
(B)
(
(f)
(g)
Medicare Part A or Part B pays for home health services only if a physician certifies and recertifies the content specified in paragraphs (a)(1) and (b)(2) of this section, as appropriate.
(a)
(i) The individual needs or needed intermittent skilled nursing care, or physical or speech therapy, or (for the period from July through November 30, 1981) occupational therapy. If a patient's underlying condition or complication requires a registered nurse to ensure that essential non-skilled care is achieving its purpose, and necessitates a registered nurse be involved in the development, management, and evaluation of a patient's care plan, the physician will include a brief narrative describing the clinical justification of this need. If the narrative is part of the certification or recertification form, then the narrative must be located immediately prior to the physician's signature. If the narrative exists as an addendum to the certification or recertification form, in addition to the physician's signature on the certification or recertification form, the physician must sign immediately following the narrative in the addendum.
(ii) Home health services were required because the individual was confined to the home except when receiving outpatient services.
(iii) A plan for furnishing the services has been established and is periodically reviewed by a physician who is a doctor of medicine, osteopathy, or podiatric medicine, and who is not precluded from performing this function under paragraph (d) of this section. (A doctor of podiatric medicine may perform only plan of treatment functions that are consistent with the functions he or she is authorized to perform under State law.)
(iv) The services were furnished while the individual was under the care of a physician who is a doctor of medicine, osteopathy, or podiatric medicine.
(v) The physician responsible for performing the initial certification must document that the face-to-face patient encounter, which is related to the primary reason the patient requires home health services, has occurred no more than 90 days prior to the home health start of care date or within 30 days of the start of the home health care by including the date of the encounter, and including an explanation of why the clinical findings of such encounter support that the patient is homebound and in need of either intermittent skilled nursing services or therapy services as defined in § 409.42(a) and (c) respectively. Under sections 1814(a)(2)(C) and 1835(a)(2)(A) of the Act, the face-to-face encounter must be performed by the certifying physician himself or herself or by a nurse practitioner, a clinical nurse specialist (as those terms are defined in section 1861(aa)(5) of the Act) who is working in collaboration with the physician in accordance with State law, a certified nurse midwife (as defined in section 1861(gg)of the Act) as
(A) The nonphysician practitioner performing the face-to-face encounter must document the clinical findings of that face-to-face patient encounter and communicate those findings to the certifying physician.
(B) If a face-to-face patient encounter occurred within 90 days of the start of care but is not related to the primary reason the patient requires home health services, or the patient has not seen the certifying physician or allowed nonphysician practitioner within the 90 days prior to the start of the home health episode, the certifying physician or nonphysician practitioner must have a face to face encounter with the patient within 30 days of the start of the home health care.
(C) The face-to-face patient encounter may occur through telehealth, in compliance with Section 1834(m) of the Act and subject to the list of payable Medicare telehealth services established by the applicable physician fee schedule regulation.
(D) The physician responsible for certifying the patient for home care must document the face-to-face encounter on the certification itself, or as an addendum to the certification (as described in paragraph (a)(1)(v) of this section), that the condition for which the patient was being treated in the face-to-face patient encounter is related to the primary reason the patient requires home health services, and why the clinical findings of such encounter support that the patient is homebound and in need of either intermittent skilled nursing services or therapy services as defined in § 409.42(a) and (c) respectively. The documentation must be clearly titled, dated and signed by the certifying physician.
(2)
(b)
(i) Beneficiary elected transfer; or
(ii) Discharge and return to the same HHA during the 60-day episode.
(2)
(c) [Reserved]
(d)
(1) If a physician has a financial relationship as defined in § 411.354 of this chapter, with an HHA, the physician may not certify or recertify need for home health services provided by that HHA, establish or review a plan of treatment for such services, or conduct the face-to-face encounter required under sections 1814(a)(2)(C) and 1835(a)(2)(A) of the Act unless the financial relationship meets one of the exceptions set forth in § 411.355 through § 411.357 of this chapter.
(2) A Nonphysician practitioner may not perform the face-to-face encounter required under sections 1814(a)(2)(C) and 1835(a)(2)(A) of the Act if such encounter would be prohibited under paragraph (d)(i) if the nonphysician practitioner were a physician.
(a)
(1) Hospital services and supplies incident to physicians' services furnished to outpatients. The exemption applies to drugs and biologicals that cannot be self-administered, but not to partial hospitalization services, as set forth in paragraph (e) of this section.
(2) Outpatient hospital diagnostic services, including necessary drugs and biologicals, ordinarily furnished or arranged for by a hospital for the purpose of diagnostic study.
(b)
(c)
(ii) The services were furnished while the individual was under the care of a physician, nurse practitioner, clinical nurse specialist, or physician assistant.
(iii) The services were furnished under a plan of treatment that meets the requirements of § 410.61 of this chapter.
(2)
(3)
(ii) If the plan of treatment is established by a physical therapist or speech-language pathologist, the certification must be signed by a physician or by a nurse practitioner, clinical nurse specialist, or physician assistant who has knowledge of the case.
(4)
(ii)
(iii)
(d) [Reserved]
(e)
(ii) The services are or were furnished while the individual was under the care of a physician.
(iii) The services were furnished under a written plan of treatment that
(2)
(A) The physician's diagnosis;
(B) The type, amount, duration, and frequency of the services; and
(C) The treatment goals under the plan.
(ii) The physician determines the frequency and duration of the services taking into account accepted norms of medical practice and a reasonable expectation of improvement in the patient's condition.
(3)
(ii)
(iii)
(A) The patient's response to the therapeutic interventions provided by the partial hospitalization program.
(B) The patient's psychiatric symptoms that continue to place the patient at risk of hospitalization.
(C) Treatment goals for coordination of services to facilitate discharge from the partial hospitalization program.
(f)
(g)
(2)
(3)
(4)
Medicare Part B pays for CORF services only if a physician certifies, and the facility physician recertifies, the content specified in paragraphs (a) and (b)(2) of this section, as appropriate.
(a)
(2) The services were furnished while the individual was under the care of a physician; and
(3) A written plan of treatment has been established and is reviewed periodically by a physician.
(b)
(2)
(ii) The patient is making progress in attaining the rehabilitation goals; and,
(iii) The treatment is not having any harmful effect on the patient.
This subpart sets forth the requirements, procedures, and time limits for
(a) A claim must meet the following requirements:
(1) A claim must be filed with the appropriate intermediary or carrier on a form prescribed by CMS in accordance with CMS instructions.
(2) A claim for physician services, clinical psychologist services, or clinical social worker services must include appropriate diagnostic coding for those services using ICD-9-CM.
(3) A claim must be signed by the beneficiary or on behalf of the beneficiary (in accordance with § 424.36).
(4) A claim must be filed within the time limits specified in § 424.44.
(5) All Part B claims for services furnished to SNF residents (whether filed by the SNF or by another entity) must include the SNF's Medicare provider number and appropriate HCPCS coding.
(b) The prescribed forms for claims are the following:
(c)
(d)
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(A) A provider of services with fewer than 25 full-time equivalent employees; or
(B) A physician, practitioner, facility, or supplier with fewer than 10 full-time equivalent employees.
(2)
(3)
(i) There is no method available for the submission of an electronic claim. This exception includes claims submitted by Medicare beneficiaries and situations in which the standard adopted by the Secretary at 45 FR 162.1102 does not support all of the information necessary for payment of the claim. The Secretary may identify situations coming within this exception in guidance.
(ii) The entity submitting the claim is a small provider of services or small supplier.
(4)
(i) The submission of dental claims.
(ii) There is a service interruption in the mode of submitting the electronic claim that is outside the control of the entity submitting the claim, for the period of the interruption.
(iii) The entity submitting the claim submits fewer than 10 claims to Medicare per month, on average.
(iv) The entity submitting the claim only furnishes services outside of the U.S. territory.
(v) On demonstration, satisfactory to the Secretary, of other extraordinary circumstances precluding submission of electronic claims.
(5)
All claims for services of providers and all claims by suppliers and nonparticipating hospitals must be—
(a) Filed by the provider, supplier, or hospital; and
(b) Signed by the provider, supplier, or hospital unless CMS instructions waive this requirement.
(a)
(b)
(1) The name and address of—
(i) The beneficiary;
(ii) The supplier or nonparticipating hospital that furnished the services; and
(iii) The physician who prescribed the services if they were furnished by a supplier other than the physician.
(2) The place where each service was furnished, e.g., home, office, independent laboratory, hospital.
(3) The date each service was furnished.
(4) A listing of the services in sufficient detail to permit determination of payment under the fee schedule for physicians' services; for itemized bills from physicians, appropriate diagnostic coding using ICD-9-CM must be used.
(5) The charges for each service.
(c)
(a)
(b)
(1) The beneficiary's legal guardian.
(2) A relative or other person who receives social security or other governmental benefits on the beneficiary's behalf.
(3) A relative or other person who arranges for the beneficiary's treatment or exercises other responsibility for his or her affairs.
(4) A representative of an agency or institution that did not furnish the services for which payment is claimed but furnished other care, services, or assistance to the beneficiary.
(5) A representative of the provider or of the nonparticipating hospital claiming payment for services it has furnished if the provider or nonparticipating hospital is unable to have the claim signed in accordance with paragraph (b)(1), (2), (3), or (4) of this section after making reasonable efforts to locate and obtain the signature of one of the individuals specified in paragraph (b)(1), (2), (3), or (4) of this section.
(6) An ambulance provider or supplier with respect to emergency or nonemergency ambulance transport services, if the following conditions and documentation requirements are met.
(i) None of the individuals listed in paragraph (b)(1), (2), (3), or (4) of this section was available or willing to sign the claim on behalf of the beneficiary at the time the service was provided;
(ii) The ambulance provider or supplier maintains in its files the following information and documentation for a period of at least four years from the date of service:
(A) A contemporaneous statement, signed by an ambulance employee present during the trip to the receiving facility, that, at the time the service was provided, the beneficiary was physically or mentally incapable of signing the claim and that none of the individuals listed in paragraph (b)(1), (2), (3), or (4) of this section were available or willing to sign the claim on behalf of the beneficiary, and
(B) Documentation with the date and time the beneficiary was transported, and the name and location of the facility that received the beneficiary, and
(C) Either of the following:
(
(
(
(
(
(
(
(c)
(d)
(e)
(a)
(1) Describes his or her relationship to the beneficiary; and
(2) Explains the circumstances that make it impractical for the beneficiary to sign the claim or statement.
(b)
(a)
(b)
(2)
(c)
(i) By the hospital or SNF;
(ii) By physicians, if their services are billed by the hospital or SNF in its name; or
(iii) By physicians who bill separately, if the services were furnished in the hospital or SNF.
(2)
(i) By the provider or facility;
(ii) By physicians whose services are billed by the provider or facility in its name; or
(iii) By physicians who bill separately, if the services were furnished in the provider or facility.
(3)
(d)
(1) This policy does not apply to unassigned claims for rental of durable medical equipment (DME).
(2) With respect to assigned claims for rental or purchase of DME, a new statement is required if another item of equipment is rented or purchased.
(a)
(2) Except as provided in paragraphs (b) and (e) of this section and except for services furnished during the last 3 months of 2009, for services furnished before January 1, 2010, the claim must be filed—
(i) On or before December 31 of the following year for services that were furnished during the first 9 months of a calendar year; and
(ii) On or before December 31st of the second following year for services that were furnished during the last 3 months of the calendar year.
(3) For services furnished during the last 3 months of CY 2009 all claims must be filed no later than December 31, 2010.
(b)
(1) The time for filing a claim will be extended if CMS or one of its contractors determines that a failure to meet the deadline in paragraph (a) of this section was caused by error or misrepresentation of an employee, Medicare contractor (including Medicare Administrative Contractor, intermediary, or carrier), or agent of HHS that was performing Medicare functions and acting within the scope of its authority.
(2) The time for filing a claim will be extended if CMS or one of its contractors determines that a failure to meet the deadline in paragraph (a) of this section is caused by all of the following conditions:
(i) At the time the service was furnished the beneficiary was not entitled to Medicare.
(ii) The beneficiary subsequently received notification of Medicare entitlement effective retroactively to or before the date of the furnished service.
(3) The time for filing a claim will be extended if CMS or one of its contractors determines that a failure to meet the deadline in paragraph (a) of this section is caused by all of the following conditions:
(i) At the time the service was furnished the beneficiary was not entitled to Medicare.
(ii) The beneficiary subsequently received notification of Medicare entitlement effective retroactively to or before the date of the furnished service.
(iii) A State Medicaid agency recovered the Medicaid payment for the furnished service from a provider or supplier 6 months or more after the service was furnished.
(4) The time for filing a claim will be extended if CMS or one of its contractors determines that a failure to meet the deadline in paragraph (a) of this section is caused by all of the following conditions:
(i) At the time the service was furnished the beneficiary was enrolled in a Medicare Advantage plan or Program of All-inclusive Care for the Elderly (PACE) provider organization.
(ii) The beneficiary was subsequently disenrolled from the Medicare Advantage plan or Program of All-inclusive Care for the Elderly (PACE) provider organization effective retroactively to or before the date of the furnished service.
(iii) The Medicare Advantage plan or Program of All-inclusive Care for the Elderly (PACE) provider organization recovered its payment for the furnished service from a provider or supplier 6 months or more after the service was furnished.
(5)
(ii) If CMS or one of its contractors determines that both of the conditions are met in paragraph (b)(2) of this section but that all of the conditions in paragraph (b)(3) are not satisfied, the time to file a claim will be extended through the last day of the sixth calendar month following the month in which either the beneficiary or the provider or supplier received notification of Medicare entitlement effective retroactively to or before the date of the furnished service.
(iii) If CMS or one of its contractors determines that all of the conditions are met in paragraph (b)(3) of this section, the time to file a claim will be extended through the last day of the sixth calendar month following the month in which the State Medicaid agency recovered the Medicaid payment for the furnished service from the provider or supplier.
(iv) If CMS or one of its contractors determines that all of the conditions are met in paragraph (b)(4) of this section, the time to file a claim will be extended through the last day of the sixth calendar month following the month in which the Medicare Advantage plan or Program of All-inclusive Care for the Elderly (PACE) provider organization recovered its payment for the furnished service from the provider or supplier.
(c)
(d)
(e) As specified in § 424.520 and § 424.521 of this subpart, there are restrictions on the ability of the following newly-enrolled suppliers to submit claims for items or services furnished prior to the effective date of their Medicare billing privileges:
(1) Physician or nonphysician practitioner organizations.
(2) Physicians.
(3) Nonphysician practitioners.
(4) Independent diagnostic testing facilities.
(a) This subpart specifies to whom Medicare payment is ordinarily made for different kinds of services.
(b) Subpart E of this part sets forth provisions applicable in special situations.
(c) Subpart F of this part specifies the exceptional circumstances under which payment may be made to an assignee or reassignee.
(a)
(b)
Medicare pays a nonparticipating hospital for the following services, if covered, in the specified circumstances:
(a) Emergency inpatient and outpatient services furnished by a U.S. hospital, if the hospital has in effect an election to claim payment in accordance with subpart G of this part.
(b) Certain medical and other health services covered under Medicare Part B and furnished by a U.S. hospital, if the hospital meets the requirements of § 424.55 for payment as a supplier.
(c) Emergency or nonemergency inpatient services furnished by a foreign hospital if the hospital has in effect an election to claim payment in accordance with subpart G of this part.
Medicare pays the beneficiary for the following services, if covered, in the specified circumstances:
(a) Emergency inpatient and outpatient services furnished by a nonparticipating U.S. hospital that has not elected to claim payment in accordance with subpart G of this part.
(b) Certain medical and other health services covered under Medicare Part B and furnished by a nonparticipating U.S. hospital, if the hospital does not receive assigned payment as a supplier under § 424.55.
(c) Emergency or nonemergency services furnished by a foreign hospital if the hospital does not have in effect an election to claim payment in accordance with subpart H of this part.
(d) Physician and ambulance services furnished outside the United States.
(e) Services furnished by a supplier if the claim has not been assigned to the supplier.
Medicare may pay amounts due a beneficiary to the beneficiary's legal guardian or representative payee.
(a) Medicare pays the supplier for covered services if the beneficiary (or the person authorized to request payment on the beneficiary's behalf) assigns the claim to the supplier and the supplier accepts assignment.
(b) In accepting assignment, the supplier agrees to the following:
(1) To accept, as full charge for the service, the amount approved by the carrier as the basis for determining the Medicare Part B payment (the reasonable charge or the lesser of the fee schedule amount and the actual charge).
(2) To limit charges to the beneficiary or any other source as follows:
(i) To collect nothing for those services for which Medicare pays 100 percent of the Medicare approved amount.
(ii) To collect only the difference between the Medicare approved amount and the Medicare Part B payment (for example, the amount of any reduction in incurred expenses under § 410.155(c), any applicable deductible amount, and any applicable coinsurance amount) for services for which Medicare pays less than 100 percent of the approved amount.
(3) Not to charge the beneficiary when Medicare paid for services determined to be “not reasonable or necessary” if—
(i) The beneficiary was without fault in the overpayment; and
(ii) The determination that the payment was incorrect was made by the carrier after the third year following the year in which the carrier sent notice to the beneficiary that it approved the payment.
(c)
(a)
(b)
(1) The reasonable charge minus the amount the beneficiary had already paid to the supplier; or
(2) The full Part B benefit due for the services furnished.
(c)
(d)
An assigned bill of $300 on which partial payment of $100 has been made is submitted to the carrier. The carrier determines that $300 is the reasonable charge for the service furnished. Total payment due is 80 percent of $300 or $240. Of this amount, $200 (the difference between the $100 partial payment and the $300 reasonable charge) is paid to the supplier. The remaining $40 is paid to the beneficiary.
An assigned bill of $325 on which partial payment of $275 has been made is submitted to the carrier. The carrier determines that $275 is the reasonable charge for the services. Total payment due is 80 percent of $275 or $220. The $220 is paid to the beneficiary, since any payment to the supplier, when added to the $275 partial payment would exceed the reasonable charge for the services furnished.
(a)
(i) A Medicare-imposed revocation of any Medicare billing privileges.
(ii) Suspension or revocation of a license to provide health care by any State licensing authority.
(iii) Revocation for failure to meet DMEPOS quality standards.
(iv) A conviction of a Federal or State felony offense (as defined in § 424.535(a)(3)(i) within the last 10 years
(v) An exclusion or debarment from participation in a Federal or State health care program.
(b)
(1) The supplier has submitted a completed application to CMS to furnish Medicare-covered items including required enrollment forms. (The supplier must enroll separate physical locations it uses to furnish Medicare-covered DMEPOS, with the exception of locations that it uses solely as warehouses or repair facilities.)
(2) The item was furnished on or after the date CMS issued to the supplier a DMEPOS supplier number conveying billing privileges. (CMS issues only one supplier number for each location.) This requirement does not apply to items furnished incident to a physician's service.
(3) CMS has not revoked or excluded the DMEPOS supplier's privileges during the period which the item was furnished has not been revoked or excluded.
(4) A supplier that furnishes a drug used as a Medicare-covered supply with durable medical equipment or prosthetic devices must be licensed by the State to dispense drugs (A supplier of drugs must bill and receive payment for the drug in its own name. A physician, who is enrolled as a DMEPOS supplier, may dispense, and bill for, drugs under this standard if authorized by the State as part of the physician's license.)
(5) The supplier has furnished to CMS all information or documentation required to process the claim.
(c)
(1) Operates its business and furnishes Medicare-covered items in compliance with the following applicable laws:
(i) Federal regulatory requirements that specify requirements for the provision of DMEPOS and ensure accessibility for the disabled.
(ii) State licensure and regulatory requirements. If a State requires licensure to furnish certain items or services, a DMEPOS supplier—
(A) Must be licensed to provide the item or service;
(B) Must employ the licensed professional on a full-time or part-time basis, except for DMEPOS suppliers who are—
(
(
(C) Must not contract with an individual or other entity to provide the licensed services, unless allowed by the State where the licensed services are being performed; and
(iii) Local zoning requirements.
(2) Has not made, or caused to be made, any false statement or misrepresentation of a material fact on its application for billing privileges. (The supplier must provide complete and accurate information in response to questions on its application for billing privileges. The supplier must report to CMS any changes in information supplied on the application within 30 days of the change.);
(3) Must have the application for billing privileges signed by an individual whose signature binds a supplier;
(4) Fills orders, frabicates, or fits items from its own inventory or by contracting with other companies for the purchase of items necessary to fill the order. If it does, it must provide, upon request, copies of contracts or other documentation showing compliance with this standard. A supplier may not contract with any entity that is currently excluded from the Medicare program, any State health care programs, or from any other Federal Government Executive Branch procurement or nonprocurement program or activity;
(5) Advises beneficiaries that they may either rent or purchase inexpensive or routinely purchased durable medical equipment, and of the purchase option for capped rental durable medical equipment, as defined in § 414.220(a) of this subchapter. (The supplier must provide, upon request, documentation that it has provided beneficiaries with this information, in the form of copies of letters, logs, or signed notices.);
(6) Honors all warranties expressed and implied under applicable State law. A supplier must not charge the beneficiary or the Medicare program for the repair or replacement of Medicare covered items or for services covered under warranty. This standard applies to all purchased and rented items, including capped rental items, as described in § 414.229 of this subchapter. The supplier must provide, upon request, documentation that it has provided beneficiaries with information about Medicare covered items covered under warranty, in the form of copies of letters, logs, or signed notices;
(7) Maintains a physical facility on an appropriate site. An appropriate site must meet all of the following:
(i) Must meet the following criteria:
(A) Except for State-licensed orthotic and prosthetic personnel providing custom fabricated orthotics or prosthetics in private practice, maintains a practice location that is at least 200 square feet beginning—
(
(
(
(B) Is in a location that is accessible to the public, Medicare beneficiaries, CMS, NSC, and its agents. (The location must not be in a gated community or other area where access is restricted.)
(C) Is accessible and staffed during posted hours of operation.
(D) Maintains a permanent visible sign in plain view and posts hours of operation. If the supplier's place of business is located within a building complex, the sign must be visible at the main entrance of the building or the hours can be posted at the entrance of the supplier.
(E) Except for business records that are stored in centralized location as described in paragraph (c)(7)(ii) of this
(F) Is in a location that contains space for retaining the necessary ordering and referring documentation specified in § 424.516(f).
(ii) May be the centralized location for all of the business records and the ordering and referring documentation of a multisite supplier.
(iii) May be a “closed door” business, such as a pharmacy or supplier providing services only to beneficiaries residing in a nursing home, that complies with all applicable Federal, State, and local laws and regulations. “Closed door” businesses must comply with all the requirements in this paragraph.
(8) Permits CMS, the NSC, or agents of CMS or the NSC to conduct on-site inspections to ascertain supplier compliance with the requirements of this section.
(9) Maintains a primary business telephone that is operating at the appropriate site listed under the name of the business locally or toll-free for beneficiaries.
(i) Cellular phones, beepers, or pagers must not be used as the primary business telephone.
(ii) Calls must not be exclusively forwarded from the primary business telephone listed under the name of the business to a cellular phone, beeper, or pager.
(iii) Answering machines, answering services, facsimile machines or combination of these options must not be used exclusively as the primary business telephone during posted operating hours.
(10) Has a comprehensive liability insurance policy in the amount of at least $300,000 that covers both the supplier's place of business and all customers and employees of the supplier. In the case of a supplier that manufactures its own items, this insurance must also cover product liability and completed operations. Failure to maintain required insurance at all times will result in revocation of the supplier's billing privileges retroactive to the date the insurance lapsed;
(11) Agree not to make a direct solicitation (as defined in § 424.57(a)) of a Medicare beneficiary unless one or more of the following applies:
(i) The individual has given written permission to the supplier or the ordering physician or non-physician practitioner to contact them concerning the furnishing of a Medicare-covered item that is to be rented or purchased.
(ii) The supplier has furnished a Medicare-covered item to the individual and the supplier is contacting the individual to coordinate the delivery of the item.
(iii) If the contact concerns the furnishing of a Medicare-covered item other than a covered item already furnished to the individual, the supplier has furnished at least one covered item to the individual during the 15-month period preceding the date on which the supplier makes such contact.
(12) Must be responsible for the delivery of Medicare covered items to beneficiaries and maintain proof of delivery. (The supplier must document that it or another qualified party has at an appropriate time, provided beneficiaries with necessary information and instructions on how to use Medicare-covered items safely and effectively);
(13) Must answer questions and respond to complaints a beneficiary has about the Medicare-covered item that was sold or rented. A supplier must refer beneficiaries with Medicare questions to the appropriate carrier. A supplier must maintain documentation of contacts with beneficiaries regarding complaints or questions;
(14) Must maintain and replace at no charge or repair directly, or through a service contract with another company, Medicare-covered items it has rented to beneficiaries. The item must function as required and intended after being repaired or replaced;
(15) Must accept returns from beneficiaries of substandard (less than full quality for the particular item or unsuitable items, inappropriate for the beneficiary at the time it was fitted and rented or sold);
(16) Must disclose these supplier standards to each beneficiary to whom it supplies a Medicare-covered item;
(17) Must comply with the disclosure provisions in § 420.206 of this subchapter;
(18) Must not convey or reassign a supplier number;
(19) Must have a complaint resolution protocol to address beneficiary complaints that relate to supplier standards in paragraph (c) of this section and keep written complaints, related correspondence and any notes of actions taken in response to written and oral complaints. Failure to maintain such information may be considered evidence that supplier standards have not been met. (This information must be kept at its physical facility and made available to CMS, upon request.);
(20) Must maintain the following information on all written and oral beneficiary complaints, including telephone complaints, it receives:
(i) The name, address, telephone number, and health insurance claim number of the beneficiary.
(ii) A summary of the complaint; the date it was received; the name of the person receiving the complaint, and a summary of actions taken to resolve the complaint.
(iii) If an investigation was not conducted, the name of the person making the decision and the reason for the decision.
(21) Provides to CMS, upon request, any information required by the Medicare statute and implementing regulations.
(22) All suppliers of DMEPOS and other items and services must be accredited by a CMS-approved accreditation organization in order to receive and retain a supplier billing number. The accreditation must indicate the specific products and services, for which the supplier is accredited in order for the supplier to receive payment for those specific products and services.
(23) All DMEPOS suppliers must notify their accreditation organization when a new DMEPOS location is opened. The accreditation organization may accredit the new supplier location for three months after it is operational without requiring a new site visit.
(24) All DMEPOS supplier locations, whether owned or subcontracted, must meet the DMEPOS quality standards and be separately accredited in order to bill Medicare. An accredited supplier may be denied enrollment or their enrollment may be revoked, if CMS determines that they are not in compliance with the DMEPOS quality standards.
(25) All DMEPOS suppliers must disclose upon enrollment all products and services, including the addition of new product lines for which they are seeking accreditation. If a new product line is added after enrollment, the DMEPOS supplier will be responsible for notifying the accrediting body of the new product so that the DMEPOS supplier can be re-surveyed and accredited for these new products.
(26) Must meet the surety bond requirements specified in paragraph (d) of this section.
(27) Must obtain oxygen from a State-licensed oxygen supplier (applicable only to those suppliers in States that require oxygen licensure.)
(28) Is required to maintain ordering and referring documentation consistent with the provisions found in § 424.516(f)
(29)(i) Except as specified in paragraph (c)(29)(ii) of this section, is prohibited from sharing a practice location with any other Medicare supplier or provider.
(ii) The prohibition specified in paragraph (c)(29)(i) of this section is not applicable at a practice location that meets one of the following:
(A) Where a physician whose services are defined in section 1848(j)(3) of the Act or a nonphysician practitioner, as described in section 1842(b)(18)(C) of the Act, furnishes items to his or her own patient as part of his or her professional service.
(B) Where a physical or occupational therapist whose services are defined in sections 1861(p) and 1861(g) of the Act, furnishes items to his or her own patient as part of his or her professional service.
(C) Where a DMEPOS supplier is co-located with and owned by an enrolled Medicare provider (as described in § 489.2(b) of this chapter). The DMEPOS supplier—
(30)(i) Except as specified in paragraph (c)(30)(ii) of this section, is open to the public a minimum of 30 hours per week.
(ii) The provision of paragraph (c)(30)(i) of this section is not applicable at a practice location where a—
(A) Physician whose services are defined in section 1848(j)(3) of the Act furnishes items to his or her own patient(s) as part of his or her professional service;
(B) Licensed non-physician practitioners whose services are defined in sections 1861(p) and 1861(g) of the Act furnishes items to his or her own patient(s) as part of his or her professional service; or
(C) DMEPOS supplier is working with custom made orthotics and prosthetics.
(d)
(e)
(f)
At 74 FR 198, Jan. 2, 2009, § 424.57 was amended by redesignating paragraphs (d) and (e) as paragraphs (e) and (f), adding a new paragraph (d) and in newly redesignated paragraph (e), by removingthe cross-reference, “paragraphs (b) and (c)” and adding the cross-reference “paragraphs (b), (c), and (d)” however, these amendments could not be incorporated due to inaccurate amendatory instruction. For the convenience of the user, the added text is set forth as follows:
(d)
(ii)
(2)
(ii) A supplier that seeks to become an enrolled DMEPOS supplier through a purchase or transfer of assets or ownership interest must submit to the NSC a surety bond from an authorized surety of $50,000 and if required by the NSC an elevated bond amount as described in paragraph (d)(3) of this section that is effective from the date of the purchase or transfer in order to exercise billing privileges as of that date. If the bond is effective at a later date, the effective date of the new DMEPOS supplier billing privileges is the effective date of the surety bond as validated by the NSC.
(iii) A DMEPOS supplier enrolling a new practice location must submit to the NSC a new surety bond from an authorized surety or an amendment or rider to the existing bond, showing that the new practice location is covered by an additional base surety bond of $50,000 or, as necessary, an elevated surety bond amount as described in paragraph (d)(3) of this section.
(3)
(ii) The NSC prescribes an elevated surety bond amount of $50,000 per occurrence of an adverse legal action within the 10 years preceding enrollment, revalidation, or reenrollment, as defined in paragraph (a) of this section.
(4)
(ii)
(B) CMS requires a supplier to submit a bond that on its face reflects the requirements of this section. CMS revokes or denies a DMEPOS supplier's billing privileges based upon the submission of a bond that does not reflect the requirements of paragraph (d) of this section.
(5)
(A) The amount of any unpaid claim, plus accrued interest, for which the DMEPOS supplier is responsible.
(B) The amount of any unpaid claims, CMPs, or assessments imposed by CMS or OIG on the DMEPOS supplier, plus accrued interest.
(ii) The bond must provide the following: The surety is liable for unpaid claims, CMPs, or assessments that occur during the term of the bond.
(iii) If the DMEPOS supplier fails to furnish a bond meeting the requirements of paragraph (d) of this section, fails to submit a rider when required, or if the DMEPOS supplier's billing privileges are revoked, the last bond or rider submitted by the DMEPOS supplier remains in effect until the last day of the surety bond coverage period and the surety remains liable for unpaid claims, CMPs, or assessments that—
(A) CMS or the OIG imposes or asserts against the DMEPOS supplier based on overpayments or other events that took place during the term of the bond or rider; and
(B) Were imposed or assessed by CMS or the OIG during the 2 years following the date that the DMEPOS supplier failed to submit a bond or required rider, or the date the DMEPOS supplier's billing privileges were terminated, whichever is later.
(6)
(ii) Cancellation of a surety bond is grounds for revocation of the DMEPOS supplier's Medicare billing privileges unless the DMEPOS supplier provides a new bond before the effective date of the cancellation. The liability of the surety continues through the termination effective date.
(iii) If CMS receives notification of a lapse in bond coverage from the surety, the DMEPOS supplier's billing privileges are revoked. During this lapse, Medicare does not pay for items or services furnished during the gap in coverage, and the DMEPOS supplier is held liable for the items or services (that is, the DMEPOS supplier would not be permitted to charge the beneficiary for the items or services).
(iv) The surety must immediately notify the NSC if there is a lapse in the surety's coverage of the DMEPOS supplier's coverage.
(7)
(8)
(9)
(10)
(11)
(ii) CMS denies billing privileges to a supplier if the supplier seeking to become an enrolled DMEPOS supplier fails to obtain and file timely a surety bond as specified with this subpart and CMS instructions.
(12)
(13)
(14)
(15)
(B) State-licensed orthotic and prosthetic personnel in private practice making custom made orthotics and prosthetics are provided an exception to the surety bond requirement if—
(
(
(C) Physicians and nonphysician practitioners as defined in section 1842(b)(18) of the Act are provided an exception to the surety bond requirement when items are furnished only to the physician or nonphysician practitioner's own patients as part of his or her physician service.
(D) Physical and occupational therapists in private practice are provided an exception to the surety bond requirement if—
(
(
(
(ii)
(a)
(b)
(i) A list of the types of DMEPOS supplies, and a list of products and services for which the organization is requesting approval.
(ii) A detailed comparison of the organization's accreditation requirements and standards with the applicable DMEPOS quality standards, such as a crosswalk.
(iii) A detailed description of the organization's operational processes, including procedures for performing unannounced surveys, frequency of the
(iv) Procedures used to notify DMEPOS suppliers of compliance or noncompliance with the accreditation requirements.
(v) Procedures used to monitor the correction of deficiencies found during an accreditation survey.
(vi) Procedures for coordinating surveys with another accrediting organization if the organization does not accredit all products the supplier provides.
(vii) Detailed professional information about the individuals who perform surveys for the accreditation organization, including the size and composition of accreditation survey teams for each type of DMEPOS supplier accredited, and the education and experience requirements surveyors must meet. The information must include the following:
(A) The content and frequency of the continuing education training provided to survey personnel.
(B) The evaluation systems used to monitor the performance of individual surveyors and survey teams.
(C) Policies and procedures for a surveyor or institutional affiliate of the independent accrediting organization that participates in a survey or accreditation decision regarding a DMEPOS supplier with which that individual or institution is professionally or financially affiliated.
(viii) A description of the organization's data management, analysis and reporting system for its surveys and accreditation decisions, including the kinds of reports, tables, and other displays generated by that system.
(ix) Procedures for responding to, and investigating complaints against, accredited facilities, including policies and procedures regarding coordination of these activities with appropriate licensing bodies, ombudsman programs, the National Supplier Clearinghouse, and CMS.
(x) The organization's policies and procedures for notifying CMS of facilities that fail to meet the accreditation organization's requirements.
(xi) A description of all types, categories, and durations of accreditations offered by the organization.
(xii) A list of the following:
(A) All currently accredited DMEPOS suppliers.
(B) The types and categories of accreditation currently held by each supplier.
(C) The expiration date of each supplier's current accreditation.
(D) The upcoming survey cycles for all DMEPOS suppliers' accreditation surveys scheduled to be performed by the organization.
(xiii) A written presentation that demonstrates the organization's ability to furnish CMS with electronic data in ASCII comparable code.
(xiv) A resource analysis that demonstrates that the organization's staffing, funding, and other resources are adequate to perform fully the required surveys and related activities.
(xv) An agreement that the accreditation organization will permit its surveyors to serve as witnesses if CMS takes an adverse action based on accreditation findings.
(2)
(i) On a representative sample basis, the CMS survey may be comprehensive or focus on a specific standard;
(ii) In response to a substantial allegation, CMS surveys for any standard that CMS determines is related to the allegations.
(3)
(4)
(i) Validation survey to take place; and
(ii) CMS survey team to monitor the correction of any deficiencies found through the validation survey.
(5)
(6)
(c)
(1) Provide to CMS all of the following in written format (either electronic or hard copy) and on a monthly basis all of the following:
(i) Copies of all accreditation surveys, together with any survey-related information that CMS may require (including corrective action plans and summaries of findings with respect to unmet CMS requirements).
(ii) Notice of all accreditation decisions.
(iii) Notice of all complaints related to suppliers of DMEPOS and other items and services.
(iv) Information about any supplier of DMEPOS and other items and services against which the CMS-approved accreditation organization has taken remedial or adverse action, including revocation, withdrawal, or revision of the supplier's accreditation.
(v) Notice of any proposed changes in its accreditation standards or requirements or survey process. If the organization implements the changes before or without CMS' approval, CMS may withdraw its approval of the accreditation organization.
(2) Within 30 calendar days of a change in CMS requirements, submit to CMS:
(i) An acknowledgment of CMS's notification of the change.
(ii) A revised cross walk reflecting the new requirements.
(iii) An explanation of how the accreditation organization plans to alter its standards to conform to CMS's new requirements, within the timeframes specified in the notification of change it receives from CMS.
(3) Permit its surveyors to serve as witnesses if CMS takes an adverse action based on accreditation findings.
(4) Within 2 calendar days of identifying a deficiency of an accredited DMEPOS supplier that poses immediate jeopardy to a beneficiary or to the general public, provide CMS with written notice of the deficiency and any adverse action implemented by the accreditation organization.
(5) Within 10 calendar days after CMS's notice to a CMS-approved accreditation organization that CMS intends to withdraw approval of the accreditation organization, provide written notice of the withdrawal to all of the CMS-approved accreditation organization's accredited suppliers.
(6) Provide, on an annual basis, summary data specified by CMS that relate to the past year's accreditation activities and trends.
(d)
(1)
(i) CMS imposes new requirements or changes its survey process;
(ii) An accreditation organization proposes to adopt new standards or changes in its survey process; or
(iii) The term of an accreditation organization's approval expires.
(2)
(i) A 10 percent rate of disparity between findings by the accreditation organization and findings by CMS or its designated survey team on standards that do not constitute immediate jeopardy to patient health and safety if unmet;
(ii) Any disparity between findings by the accreditation organization and findings by CMS on standards that constitute immediate jeopardy to patient health and safety if unmet; or
(iii) That, irrespective of the rate of disparity, there are widespread or systemic problems in an organization's accreditation process such that accreditation by that accreditation organization no longer provides CMS with adequate assurance that suppliers meet or exceed the Medicare requirements.
(3)
(4)
(i) Accreditation by the organization no longer adequately assures that the suppliers of DMEPOS and other items and services are meeting the DMEPOS quality standards, and that failure to meet those requirements could jeopardize the health or safety of Medicare beneficiaries and could constitute a significant hazard to the public health; or
(ii) The accreditation organization has failed to meet its obligations with respect to application or reapplication procedures.
(e)
(2) The request must be filed within 30 calendar days of the receipt of CMS notice of an adverse determination or non-renewal.
(3) The request for reconsideration must specify the findings or issues with which the accreditation organization disagrees and the reasons for the disagreement.
(4) A requestor may withdraw its request for reconsideration at any time before the issuance of a reconsideration determination.
(5) In response to a request for reconsideration, CMS provides the accreditation organization the opportunity for an informal hearing to be conducted by a hearing officer appointed by the Administrator of CMS and provide the accreditation organization the opportunity to present, in writing and in person, evidence or documentation to refute the determination to deny approval, or to withdraw or not renew deeming authority.
(6) CMS provides written notice of the time and place of the informal hearing at least 10 calendar days before the scheduled date.
(7) The informal reconsideration hearing is open to CMS and the organization requesting the reconsideration, including authorized representatives; technical advisors (individuals with knowledge of the facts of the case or presenting interpretation of the facts); and legal counsel.
(i) The hearing is conducted by the hearing officer who receives testimony and documents related to the proposed action.
(ii) Testimony and other evidence may be accepted by the hearing officer even though it is inadmissible under the rules of court procedures.
(iii) The hearing officer does not have the authority to compel by subpoena the production of witnesses, papers, or other evidence.
(8) Within 45 calendar days of the close of the hearing, the hearing officer presents the findings and recommendations to the accreditation organization that requested the reconsideration.
(9) The written report of the hearing officer includes separate numbered findings of fact and the legal conclusions of the hearing officer. The hearing officer's decision is final.
(a) This subpart sets forth provisions applicable to payment after the beneficiary's death and payment to entities that provide coverage complementary to Medicare Part B.
(b) The provisions applicable to payment for services excluded as custodial care or services not reasonable and necessary are set forth in §§ 405.332 through 405.336 of this chapter.
(a)
(b)
(2) The beneficiary died without receiving Medicare payment.
(3) The bill has been paid.
(c)
(1) The person or persons who, without a legal obligation to do so, paid for the services with their own funds, before or after the beneficiary's death.
(2) The legal representative of the beneficiary's estate if the services were paid for by the beneficiary before he or she died, or with funds from the estate.
(3) If the deceased beneficiary or his or her estate paid for the services and no legal representative of the estate has been appointed, the survivors, in the following order of priority:
(i) The person found by SSA to be the surviving spouse, if he or she was either living in the same household with the deceased at the time of death, or was, for the month of death, entitled to monthly social security or railroad retirement benefits on the basis of the same earnings record as the deceased beneficiary;
(ii) The child or children, who were, for the month of death, entitled to monthly social security or railroad retirement benefits on the basis of the same earnings record as the deceased (and, if there is more than one child, in equal parts to each child);
(iii) The parent or parents, who were, for the month of death, entitled to monthly social security or railroad retirement benefits on the basis of the same earnings record as the deceased (and, if there is more than one parent, in equal parts to each parent);
(iv) The person found by SSA to be the surviving spouse who was not living in the same household with the deceased at the time of death and was not, for the month of death, entitled to monthly social security or railroad retirement benefits on the basis of the same earnings record as the deceased beneficiary;
(v) The child or children who were not entitled to monthly social security or railroad retirement benefits on the basis of the same earnings record as the deceased (and, if there is more than one child, in equal parts to each child);
(vi) The parent or parents who were not entitled to monthly social security or railroad retirement benefits on the basis of the same earnings record as the deceased (and, if there is more than one parent, in equal parts to each parent).
(4) If none of the listed relatives survive, no payment is made.
(5) If the services were paid for by a person other than the deceased beneficiary, and that person died before payment was completed, Medicare does not pay that person's estate. Medicare pays a surviving relative of the deceased beneficiary in accordance with the priorities in paragraph (c)(3) of this section. If none of those relatives survive. Medicare pays the legal representative of the deceased beneficiary's estate. If there is no legal representative of the estate, no payment is made.
(d)
(e)
(1) The person who claims payment must meet the following requirements:
(i) Submit a claim on a CMS-prescribed form and an itemized bill in accordance with the requirements of this subpart. (See paragraph (g) of this section for an exception.)
(ii) Provide evidence that the services were furnished if the intermediary or carrier requests it.
(iii) Provide evidence of payment of the bill and of the identity of the person who paid it.
(2) If a person claims payment as the legal representative of the deceased beneficiary's estate, he or she must also submit a copy of the papers showing appointment as legal representative.
(3) If a person claims payment as a survivor of the beneficiary, he or she must also submit evidence, if the intermediary or carrier requests it, that he or she is highest on the priority list of paragraph (c)(3) of this section.
(f)
(1) A receipted bill, or a properly completed “Report of Services” section of a claim form, showing who paid the bill;
(2) A cancelled check;
(3) A written statement from the provider or supplier or an authorized staff member; or
(4) Other probative evidence.
(g)
(a)
(b)
(2) The beneficiary died without making an assignment to the physician or other supplier or receiving Medicare payment.
(3) The bill has not been paid.
(c)
(1)
(i) Files a claim on a CMS-prescribed form in accordance with the applicable requirements of this subpart;
(ii) Upon request from the carrier, provides evidence that the services for which it claims payment were, in fact, furnished; and
(iii) Agrees in writing to accept the reasonable charge as the full charge for the services.
(2)
(i) A statement indicating that he or she has assumed legal obligation to pay for the services.
(ii) A claim on a CMS-prescribed form in accordance with the requirements of this subpart. (If a claim had been submitted by or on behalf of the beneficiary before he or she died, submission of another claim form is not required; a written request by the person seeking payment meets the requirement for a claim.)
(iii) An itemized bill that identifies the claimant as the person to whom the physician or other supplier holds
(iv) If the intermediary or carrier requests it, evidence that the services were actually furnished.
(a)
(1) Provides coverage of the service under a complementary health benefit plan (this is, the coverage that the plan provides is complementary to Medicare benefits and covers only the amount by which the Part B payment falls short of the approved charge for the service under the plan).
(2) Has paid the person who provided the service an amount (including the amount payable under the Medicare program) that the person accepts as full payment.
(3) Has the written authorization of the beneficiary (or of a person authorized to sign claims on his behalf under § 424.36) to receive the Part B payment for the services for which the entity pays.
(4) Relieves the beneficiary of liability for payment for the service and will not seek any reimbursement from the beneficiary, his or her survivors or estate.
(5) Submits any information CMS or the carrier may request, including an itemized physician or supplier bill, in order to apply the requirements under the Medicare program.
(6) Identifies and excludes from its requests for payment all services for which Medicare is the secondary payer.
(b)
(a)
(b)
(1) Prohibits the assignment, reassignment, or other transfer of the right to Medicare payments except under specified conditions;
(2) Sets forth the sanctions that CMS may impose on a provider or supplier that violates this prohibition, or on a supplier that violates the conditions to which it agreed in accepting assignment from the individual; and
(3) Specifies the conditions for payment under court-ordered assignments or reassignments.
As used in this subpart, unless the context indicates otherwise—
(1) Receive, in the agent's name, any payments due the principal;
(2) Negotiate checks payable to the principal; or
(3) Receive, in any other manner, direct payment of amounts due the principal.
(a)
(b)
(2)
(3)
(i) The agent receives the payment under an agency agreement with the provider;
(ii) The agent's compensation is not related in any way to the dollar amounts billed or collected;
(iii) The agent's compensation is not dependent upon the actual collection of payment;
(iv) The agent acts under payment disposition instructions that the provider may modify or revoke at any time; and
(v) The agent, in receiving the payment, acts only on behalf of the provider.
CMS may terminate a provider agreement, in accordance with § 489.53(a)(1) of this chapter, if the provider—
(a) Executes or continues a power of attorney, or enters into or continues any other arrangement, that authorizes or permits payment contrary to the provisions of this subpart; or
(b) Fails to furnish, upon request by CMS or the intermediary, evidence necessary to establish compliance with the requirements of this subpart.
(a)
(b)
(2)
(3)
(4)
(5)
(c)
(d)
(2)
(3)
(a)
(b)
(c)
(1) Violates the terms of assignment in § 424.55(b).
(2) Continues collection efforts or fails to refund moneys incorrectly collected, in violation of the terms of assignment in § 424.55(b).
(3) Executes or continues in effect a reassignment or power of attorney or any other arrangement that seeks to obtain payment contrary to the provisions of § 424.80; or
(4) Fails to furnish evidence necessary to establish its compliance with the requirements of § 424.80.
(d)
(1) States the reasons for the proposed revocation; and
(2) Provides an opportunity for the supplier or other party to submit written argument and evidence against the proposed revocation. CMS usually allows 15 days from the date on the notice, but may extend or reduce the time as circumstances require.
(e)
(2)
(i) The reasons for the revocation;
(ii) That the revocation is effective as of the date on the notice;
(iii) That the supplier or other party may, within 60 days from the date on the notice (or a longer period if the notice so specifies), request an administrative hearing and may be represented by counsel or other qualified representative.
(iv) That the carrier will withhold payment on any claims submitted by the supplier or other party until the period for requesting a hearing expires or, if a hearing is requested, until the hearing officer issues a decision;
(v) That if the hearing decision reverses the revocation, the carrier will pay the supplier's or other party's claims; and
(vi) That if a hearing is not requested or the hearing decision upholds the revocation, payment will be made to the beneficiary or to another person or agency authorized to receive payment on his or her behalf.
If the supplier or other party requests a hearing under § 424.82(e)(2)—
(a) The hearing is conducted—
(1) By a CMS hearing official who was not involved in the decision to revoke; and
(2) In accordance with the procedures set forth in §§ 405.824 through 405.833 (but excepting § 405.832(d)) and 405.860 through 405.872 of this chapter. In applying those procedures, “CMS” is substituted for “carrier”; and “hearing official”, for “hearing officer”.
(b) As soon as practicable after the close of the hearing, the official who conducted it issues a hearing decision that—
(1) Is based on all the evidence presented at the hearing and included in the hearing record; and
(2) Contains findings of fact and a statement of reasons.
(a)
(2)
(b)
(c)
(2) A final determination to revoke remains in effect until CMS finds that the reason for the revocation has been removed and that there is reasonable assurance that it will not recur.
(d)
(a)
(b)
(2)
(a)
(1) Someone files a certified copy of the court order and of the executed assignment or reassignment (if it was necessary to execute one) with the intermediary or carrier responsible for processing the claim; and
(2) The assignment or reassignment—
(i) Applies to all Medicare benefits payable to a particular person or entity during a specified or indefinite time period; or
(ii) Specifies a particular amount of money, payable to a particular person or entity by a particular intermediary or carrier.
(b)
(c)
This subpart sets forth procedures and criteria that are followed in determining whether Medicare will pay for emergency services furnished by a hospital that is located in the United States and does not have in effect a provider agreement, that is, an agreement to participate in Medicare.
As used in this subpart, unless the context indicates otherwise—
(1) Is primarily engaged in providing, by or under the supervision of doctors of medicine or osteopathy, inpatient services for the diagnosis, treatment, and care or rehabilitation of persons who are sick, injured, or disabled;
(2) Is not primarily engaged in providing skilled nursing care and related services for patients who require medical or nursing care, as described in section 1861(j)(1)(A) of the Act;
(3) Provides 24-hour nursing service in accordance with section 1861(e)(5) of the Act; and
(4) Is licensed, or is approved as meeting the standards for licensing, by the State or local licensing agency.
Without additional evidence of a threat to life or health, the following situations do not in themselves indicate a need for emergency services:
(a) Lack of care at home.
(b) Lack of transportation to a participating hospital.
(c) Death of the patient in the hospital.
Medicare pays for emergency services furnished to a beneficiary by a nonparticipating hospital or under arrangements made by such a hospital if the conditions of this section are met.
(a)
(2) The hospital has in effect an election to claim payment for all emergency services furnished in a calendar year in accordance with § 424.104.
(3) The need for emergency services arose while the beneficiary was not an inpatient in a hospital.
(4) In the case of inpatient hospital services, the services are furnished during a period in which the beneficiary could not be safely discharged or transferred to a participating hospital or other institution.
(5) The determination that the hospital was the most accessible hospital available and equipped to furnish the services is made in accordance with § 424.106.
(b)
(1) Describes the nature of the emergency and specifies why it required that the beneficiary be treated in the most accessible hospital;
(2) Establishes that all the conditions in paragraph (a) of this section are met; and
(3) Indicates when the emergency ended, which, for inpatient hospital services, is the earliest date on which the beneficiary could be safely discharged or transferred to a participating hospital or other institution.
(a)
(1) To comply with the provisions of subpart C of part 489 of this chapter relating to charges for items and services the hospital may make to the beneficiary, or any other person on his or her behalf.
(2) To comply with the provisions of subpart D of part 489 of this chapter relating to proper disposition of monies incorrectly collected from, or on behalf of a beneficiary.
(3) To request payment under the Medicare program based on amounts specified in § 413.74 of this chapter.
(b)
(c)
(d)
(e)
(1) The reason for its failure to qualify has been removed; and
(2) There is reasonable assurance that it will not recur.
(a)
(2) CMS determines accessibility based on the factors specified in paragraphs (b) and (c) of this section and the conditions set forth in paragraph (d) of this section.
(b)
(1) The relative distances of participating and nonparticipating hospitals in the area.
(2) The transportation facilities available to these hospitals.
(3) The quality of the roads to each hospital.
(4) The availability of beds at each hospital.
(5) Any other factors that bear on whether or not the services could be
(c)
(1) The personal preference of the beneficiary, the physician, or members of the family.
(2) The fact that the attending physician did not have staff privileges in a participating hospital which was available and the most accessible to the beneficiary.
(3) The location of previous medical records.
(d)
(1) It was the nearest hospital to the point where the emergency occurred, it was medically equipped to handle the type of emergency, and it was the most accessible, on the basis of the factors specified in paragraph (b) of this section; or
(2) There was a closer participating hospital equipped to handle the emergency, but the participating hospital did not have a bed available or would not accept the individual.
(a)
(1) Has in effect a statement of election to claim payment for all covered emergency services furnished during a calendar year, in accordance with § 424.104;
(2) Claims payment in accordance with § 424.32; and
(3) Submits evidence requested by CMS to establish that the services meet the requirements of this subpart.
(b)
(1) Contain sufficient information to clearly establish that, when the additional services were furnished, the emergency still existed; and
(2) Indicate when the emergency ended, which, for inpatient hospital services, is the earliest date on which the beneficiary could be safely discharged or transferred to a participating hospital or other institution.
Medicare pays the beneficiary for emergency services if the following conditions are met:
(a) The hospital does not have in effect an election to claim payment.
(b) The beneficiary, or someone on his or her behalf, submits—
(1) A claim that meets the requirements of § 424.32;
(2) An itemized hospital bill; and
(3) Evidence requested by CMS to establish that the services meet the requirements of this subpart.
This subpart sets forth the conditions for payment for services furnished in a foreign country.
Subject to the conditions set forth in this subpart—
(a) Medicare Part A pays, in the amounts specified in § 413.74 of this chapter, for emergency and nonemergency inpatient hospital services furnished by a foreign hospital.
(b) Medicare Part B pays for certain physicians' services and ambulance services furnished in connection with covered inpatient care in a foreign hospital, as specified in § 424.124.
(c) All other services furnished outside the United States are excluded
Medicare Part A pays for emergency inpatient hospital services furnished by a foreign hospital if the following conditions are met:
(a) At the time of the emergency that required the inpatient hospital services, the beneficiary was—
(1) In the United States; or
(2) In Canada traveling between Alaska and another State without unreasonable delay and by the most direct route.
(b) The foreign hospital was closer to, or more accessible from, the site of the emergency than the nearest United States hospital equipped to deal with, and available to treat, the individual's illness or injury.
(c) The conditions for payment for emergency services set forth in § 424.103 are met.
(d) The hospital is a hospital as defined in § 424.101, and is licensed, or approved as meeting the conditions for licensing, by the appropriate agency of the country in which it is located.
(e) The determination of whether the hospital was more accessible is made in accordance with § 424.106.
Medicare Part A pays for inpatient hospital services furnished by a foreign hospital if the following conditions are met:
(a) The beneficiary is a resident of the United States.
(b) The foreign hospital is closer or more accessible to the beneficiary's residence than the nearest United States hospital equipped to deal with, and available to treat, the individual's illness or injury.
(c) The foreign hospital is—
(1) A hospital as defined in § 424.101 and, it is licensed, or approved as meeting the conditions for licensing, by the appropriate agency of the country in which it is located; and
(2) Accredited by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) or accredited or approved by a program of the country where it is located under standards the CMS finds to be essentially equivalent to those of the JCAHO.
(d) The services are covered services that Medicare would pay for if they were furnished by a participating hospital.
(a)
(1) They are furnished—
(i) To an individual who is entitled to Part B benefits; and
(ii) In connection with covered inpatient hospital services; and
(2) They meet the conditions set forth in paragraphs (b) and (c) of this section.
(b)
(i) In the hospital, during a period of covered inpatient services; or
(ii) Outside the hospital, on the day of admission and for the same condition that required inpatient admission; and
(2) The physician is legally authorized to practice in the country where he or she furnishes the services.
(c)
(1) Necessary because the use of other means of transportation is contraindicated by the beneficiary's condition; and
(2) Furnished by an ambulance that meets the definition in § 410.41 of this chapter.
(a)
(1) Has in effect an election that—
(i) Meets the requirements set forth in § 424.104; and
(ii) Reflects the hospital's intent to claim for all covered services furnished during a calendar year.
(2) Claims payment in accordance with §§ 424.32 and 413.74 of this chapter; and
(3) Submits evidence requested by CMS to establish that the services meet the requirements of this subpart.
(b)
(a)
(1) The hospital does not have in effect an election to claim payment; and
(2) The beneficiary, or someone on his or her behalf, submits—
(i) A claim in accordance with § 424.32;
(ii) An itemized hospital bill; and
(iii) Evidence requested by CMS to establish that the services meet the requirements of this subpart.
(b)
(c)
(d) The amount payable to the beneficiary is determined in accordance with § 410.152 of this chapter.
(a)
(2)
(3)
(b)
(a) When an intermediary or carrier is notified by a payee that a check has been lost, stolen, defaced, mutilated, destroyed, or paid on forged endorsement, the intermediary or carrier contacts the commercial bank on whose paper the check was drawn and determines whether the check has been negotiated.
(b) If the check has been negotiated—
(1) The intermediary or carrier provides the payee with a copy of the check and other pertinent information (such as a claim form, affidavit or questionnaire to be completed by the
(2) To pursue the claim, the payee must examine the check and certify (by completing the claim form, questionnaire or affidavit) that the endorsement is not the payee's.
(3) The claim form and other pertinent information is sent to the intermediary or carrier for review and processing of the claim.
(4) The intermediary or carrier reviews the payee's claim. If the intermediary or carrier determines that the claim appears to be valid, it forwards the claim and a copy of the check to the issuing bank. The intermediary or carrier takes further action to recover the proceeds of the check in accordance with the State law and regulations.
(5) Once the intermediary or carrier recovers the proceeds of the initial check, the intermediary or carrier issues a replacement check to the payee.
(6) If the bank of first deposit refuses to settle on the check for good cause, the payee must pursue the claim on his or her own and the intermediary or carrier will not reissue the check to the payee.
(c) If the check has not been negotiated—
(1) The intermediary or carrier arranges with the bank to stop payment on the check; and
(2) Except as provided in paragraph (d), the intermediary or carrier reissues the check to the payee.
(d) No check may be reissued under (c)(2) unless the claim for a replacement check is received by the intermediary or carrier no later than 1 year from the date of issuance of the original check, unless State law (including any applicable Federal banking laws or regulations that may affect the relevant State proceeding) provides a longer period which will control.
The provisions of this subpart contain the requirements for enrollment, periodic resubmission and certification of enrollment information for revalidation, and timely reporting of updates and changes to enrollment information. These requirements apply to all providers and suppliers except for physicians and practitioners who have entered into a private contract with a beneficiary as described in part 405, subpart D of this chapter. Providers and suppliers must meet and maintain these enrollment requirements to bill either the Medicare program or its beneficiaries for Medicare covered services or supplies.
As used in this subpart, unless the context indicates otherwise—
(1) Identification of a provider or supplier;
(2) Validation of the provider's or supplier's eligibility to provide items or services to Medicare beneficiaries;
(3) Identification and confirmation of the provider or supplier's practice location(s) and owner(s); and
(4) Granting the provider or supplier Medicare billing privileges.
(1) A Medicare-imposed revocation of any Medicare billing privileges;
(2) Suspension or revocation of a license to provide health care by any State licensing authority;
(3) Revocation or suspension by an accreditation organization;
(4) A conviction of a Federal or State felony offense (as defined in § 424.535(a)(3)(i)) within the last 10 years preceding enrollment, revalidation, or re-enrollment; or
(5) An exclusion or debarment from participation in a Federal or State health care program.
To receive payment for covered Medicare items or services from either Medicare (in the case of an assigned claim) or a Medicare beneficiary (in the case of an unassigned claim), a provider or supplier must be enrolled in the Medicare program. Once enrolled, the provider or supplier receives billing privileges and is issued a valid billing number effective for the date a claim was submitted for an item that was furnished or a service that was rendered. (See 45 CFR part 162 for information on the National Provider Identifier and its use as the Medicare billing number.)
(a)
(b)
(2) If a provider or a supplier who is eligible for an NPI enrolled in the Medicare program prior to obtaining an NPI and the provider's or the supplier's NPI is not in the provider's or the supplier's Medicare enrollment record, the provider or the supplier must submit a Medicare enrollment application that contains the NPI.
(3) A physician or an eligible professional who has validly opted out of the Medicare program does not need to submit an enrollment application.
(c)
(2) A Medicare beneficiary who submits a claim for service to Medicare—
(i) Must include the legal name of any provider or supplier who is required to be identified in that claim; and
(ii) May, if known to the beneficiary, include the National Provider Identifier (NPI) of any provider or supplier who is required to be identified in that claim.
(3) A Medicare contractor will reject a claim from a provider or a supplier if the required NPI(s) is not reported.
(a)
(i) The Part B items and services must have been ordered or referred by a physician or, when permitted, an eligible professional (as defined in § 424.506(a) of this part).
(ii) The claim from the Part B provider or supplier must contain the legal name and the National Provider Identifier (NPI) of the physician or the eligible professional (as defined in § 424.506(a) of this part) who ordered or referred.
(iii) The physician or the eligible professional who ordered or referred must have an approved enrollment record or a valid opt-out record in the Provider Enrollment, Chain and Ownership System (PECOS).
(iv) If the items or services were ordered or referred by a resident or an intern, the claim must identify the teaching physician as the ordering or referring supplier. The claim must identify the teaching physician by his or her legal name and NPI and he or she must have an approved enrollment
(2)
(i) The Part B items and services must have been ordered or referred by a physician or, when permitted, an eligible professional (as defined in § 424.506(a) of this part).
(ii) The claim must contain the legal name of the physician or the eligible professional (as defined in § 424.506(a) of this part) who ordered or referred.
(iii) The physician or the eligible professional who ordered or referred must have an approved enrollment record or a valid opt-out record in the Provider Enrollment, Chain and Ownership System (PECOS).
(iv) If the items or services were ordered or referred by a resident or an intern, the claim must identify the teaching physician as the ordering or referring supplier. The claim must identify the teaching physician by his or her legal name and he or she must have an approved enrollment record or a valid opt-out record in PECOS.
(b)
(i) The Part A or Part B home health services must have been ordered by a physician;
(ii) The claim from the provider of home health services must contain the legal name and the National Provider Identifier (NPI) of the ordering physician;
(iii) The ordering physician must have an approved enrollment record or a valid opt-out record in the Provider Enrollment, Chain, and Ownership System (PECOS); and
(iv) If the services were ordered by a resident or an intern, the claim must identify the teaching physician as the ordering or referring physician. The claim must identify the teaching physician by his or her legal name and NPI and he or she must have an approved enrollment record or a valid opt-out record in PECOS.
(2)
(i) The Part A or Part B home health services must have been ordered by a physician.
(ii) The claim from the provider of home health services must contain the legal name of the ordering physician.
(iii) The ordering physician must have an approved enrollment record or a valid opt-out record in the Provider Enrollment, Chain, and Ownership System (PECOS).
(iv) If the services were ordered by a resident or an intern, the claim must identify the teaching physician as the ordering or referring physician. The claim must identify the teaching physician by his or her legal name and he or she must have an approved enrollment record or a valid opt-out record in PECOS.
(c) A Medicare contractor will reject a claim from a provider or a supplier for covered services described in paragraphs (a) and (b) of this section if the claim does not meet the requirements of paragraph (a)(1) and (b)(1) of this section, respectively.
(d) A Medicare contractor may deny a claim from a Medicare beneficiary for covered items or services described in paragraphs (a) and (b) of this section if the claim does not meet the requirements of paragraphs (a)(2) and (b)(2) of this section, respectively.
(a) Providers and suppliers must submit enrollment information on the applicable enrollment application. Once the provider or supplier successfully completes the enrollment process, including, if applicable, a State survey and certification or accreditation process, CMS enrolls the provider or supplier into the Medicare program. To be enrolled, a provider or supplier must
(b) The effective dates for reimbursement are specified in § 489.13 of this chapter for providers and suppliers requiring State survey or certification or accreditation, § 424.5 and § 424.44 for non-surveyed or certified/accredited suppliers, and § 424.57 and section 1834(j)(1)(A) of the Act for DMEPOS suppliers.
(c) The effective date for reimbursement for providers and suppliers seeking accreditation from a CMS-approved accreditation organization as specified in § 489.13.
(d) Providers and suppliers must meet the following enrollment requirements:
(1)
(2)
(i) Complete, accurate, and truthful responses to all information requested within each section as applicable to the provider or supplier type.
(ii) Submission of all documentation required by CMS under this or other statutory or regulatory authority, or under the Paperwork Reduction Act of 1995, to uniquely identify the provider or supplier. This documentation may include, but is not limited to, proof of the legal business name, practice location, social security number (SSN), tax identification number (TIN), National Provider Identifier (NPI), if issued, and owners of the business.
(iii) Submission of all documentation, including—
(A) All applicable Federal and State licenses, certifications including, but not limited to Federal Aviation Administration; and
(B) Documentation associated with regulatory and statutory requirements necessary to establish a provider's or supplier's eligibility to furnish Medicare covered items or services to beneficiaries in the Medicare program.
(iv) At the time of enrollment, an enrollment change request, revalidation or change of Medicare contractors where the provider or supplier was already receiving payments via EFT, providers and suppliers must agree to receive Medicare payments via EFT, if not already receiving payment through EFT. In order to receive Medicare payments via EFT, providers and suppliers must submit the CMS-588 form.
(3)
(i)
(A) An individual practitioner, the applying practitioner.
(B) A sole proprietorship, the applying sole proprietor.
(C) A corporation, partnership, group, limited liability company, or other organization (hereafter referred to collectively in this section as an organization), an authorized official, as defined in § 424.502. When an authorized official signs the certification statement on behalf of an organization, the signed statement is considered legally binding upon the organization.
(ii)
(A) Be assigned by the authorized official currently on file with CMS;
(B) Be submitted to CMS using the appropriate enrollment application or CMS established electronic enrollment process;
(C) Include the title and SSN of each person delegated authority to update or change the organization's enrollment information;
(D) Be an individual that has an ownership or control interest in the organization or is a W-2 managing employee as defined in section 1126(b) of the Act; and
(E) Be signed by the authorized official and the delegated official(s) of the organization.
(4)
(5)
(6)
(7)
(8)
(i)
(ii)
(9) In order to obtain enrollment and to maintain enrollment for the first three months after Medicare billing privileges are conveyed, a home health agency must satisfy the home health “initial reserve operating funds” requirement as set forth in § 489.28 of this chapter.
(e) Providers and suppliers must—
(1) Agree to receive Medicare payment via electronic funds transfer
(2) Submit the CMS-588 form to receive Medicare payment via electronic funds transfer.
(a)
(1) The applicable application fee.
(2) A request for a hardship exception to the application fee at the time of filing a Medicare enrollment application.
(b)
(1) The applicable application fee.
(2) A request for a hardship exception to the application fee at the time of filing a Medicare enrollment application.
(c)
(d)
(1) For 2010, $500.00.
(2) For 2011 and subsequent years—
(i) Is adjusted by the percentage change in the consumer price index for all urban consumers (all items; United States city average) for the 12-month period ending with June of the previous year;
(ii) Is effective from January 1 to December 31 of a calendar year;
(iii) Is based on the submission of an initial application, application to establish a new practice location or the submission of an application in response to a CMS revalidation request;
(iv) Must be in the amount calculated by CMS in effect for the year during which the application for enrollment is being submitted;
(v) Is nonrefundable, except if submitted with one of the following:
(A) A request for hardship exception that is subsequently approved;
(B) An application that is rejected prior to initiation of screening processes;
(C) An application that is subsequently denied as a result of the imposition of a temporary moratorium;
(e)
(f)
(g)
(1) Reject an enrollment application from a newly-enrolling institutional provider that, with the exceptions described in § 424.514(b), is not accompanied by the application fee or by a letter requesting a hardship exception from the application fee.
(2) Revoke the billing privileges of a currently enrolled institutional provider that, with the exceptions described in § 424.514(b), is not accompanied by the application fee or by a
(3)(i) Notwithstanding the foregoing, the contractor must first inform the provider that the application fee was not submitted in accordance with this section.
(ii) Within 30 days after the date of the notification, the contractor may reject the application of the newly-enrolling institutional provider or revoke the billing privileges of the currently enrolled institutional provider that has not submitted the fee.
(h)
(1) A Medicare contractor does not—
(i) Begin processing an enrollment application that is accompanied by a hardship exception request until CMS has made a decision to approve or disapprove the hardship exception request; and
(ii) Deny an enrollment application that is accompanied by a hardship exception request unless the hardship exception request is denied by CMS and the provider or supplier fails to submit the required application fee within 30 days of being notified that the request for a hardship exception was denied.
(2) A hardship exception determination made by CMS is appealable using § 405.874 of this chapter.
To maintain Medicare billing privileges, a provider or supplier (other than a DMEPOS supplier) must resubmit and recertify the accuracy of its enrollment information every 5 years. All providers and suppliers currently billing the Medicare program or initially enrolling in the Medicare program are required to complete the applicable enrollment application. The provider or supplier then enters a 5-year revalidation cycle once a completed enrollment application is submitted and validated. (Ambulance service providers must continue to resubmit enrollment information in accordance with § 410.41(c)(2) of this chapter and DMEPOS suppliers must continue to renew enrollment in accordance with § 424.57(e)). The requirements for the resubmission, recertification and reverification of enrollment information include the following:
(a)
(1) CMS contacts each provider or supplier directly when it is time to revalidate their enrollment information.
(2) A provider or supplier must submit to CMS the applicable enrollment application with complete and accurate information and applicable supporting documentation within 60 calendar days of our notification to resubmit and certify to the accuracy of its enrollment information.
(b)
(c)
(1)
(2)
(d)
(2) CMS reserve the right to adjust the routine 5-year revalidation schedule if we determine that revalidation should occur on a more frequent basis due to complaints or evidence we receive indicating noncompliance with the statute or regulations by specific provider or supplier types. The schedule may also be on a less frequent basis if we determine that the integrity of and compliance with the statute and regulations by specific provider or supplier types indicates that less frequent validation is justified. If a change occurs, CMS notifies all affected providers and suppliers at least 90 days in advance of implementing the change.
(3) CMS revalidates enrollment information for ambulance service suppliers in accordance with § 410.41(c)(2) of this chapter (Requirements for ambulance suppliers), and DMEPOS suppliers renews enrollment in accordance with § 424.57(e) (Special payment rules for items furnished by DMEPOS suppliers and issuance of DMEPOS supplier billing numbers).
(e)
(1) CMS will contact providers or suppliers to revalidate their enrollment for off-cycle revalidation.
(2) As with all revalidations, revalidations described in this paragraph are conducted in accordance with the screening procedures specified at § 424.518.
(a)
(1) Compliance with title XVIII of the Act and applicable Medicare regulations.
(2) Compliance with Federal and State licensure, certification, and regulatory requirements, as required, based on the type of services or supplies the provider or supplier type will furnish and bill Medicare.
(3) Not employing or contracting with individuals or entities that meet either of the following conditions:
(i) Excluded from participation in any Federal health care programs, for the provision of items and services covered under the programs, in violation of section 1128A(a)(6) of the Act.
(ii) Debarred by the General Services Administration (GSA) from any other Executive Branch procurement or nonprocurement programs or activities, in accordance with the Federal Acquisition and Streamlining Act of 1994, and with the HHS Common Rule at 45 CFR part 76.
(b)
(c)
(d)
(1) Within 30 days—
(i) A change of ownership;
(ii) Any adverse legal action; or
(iii) A change in practice location.
(2) All other changes in enrollment must be reported within 90 days.
(e)
(1) Within 30 days for a change of ownership or control, including changes in authorized official(s) or delegated official(s);
(2) All other changes to enrollment must be reported within 90 days.
(3) Within 30 days of any revocation or suspension of a Federal or State license or certification including Federal Aviation Administration certifications, an air ambulance supplier must report a revocation or suspension of its license or certification to the applicable Medicare contractor. The following FAA certifications must be reported:
(i) Specific pilot certifications including but not limited to instrument and medical certifications.
(ii) Airworthiness certification.
(f)
(2) A physician who ordered home health services and a physician and an eligible professional who ordered or referred items of DMEPOS or laboratory, imaging, and specialist services is required to maintain documentation for 7 years from the date of the order, certification, or referral and, upon request of CMS or a Medicare contractor, to provide access to that documentation. The documentation includes written and electronic documents (including the NPI of the physician who ordered the home health services and the NPI of the physician or the eligible professional who ordered or referred the DMEPOS, laboratory, imaging, or specialist services) relating to written orders or requests for payments for items of DMEPOS and home health, laboratory, imaging, and specialist services.
(a) CMS reserves the right, when deemed necessary, to perform onsite review of a provider or supplier to verify that the enrollment information submitted to CMS or its agents is accurate and to determine compliance with Medicare enrollment requirements. Site visits for enrollment purposes do not affect those site visits performed for establishing compliance with conditions of participation. Based upon the results of CMS's onsite review, the provider may be subject to denial or revocation of Medicare billing privileges as specified in § 424.530 or § 424.535 of this part.
(1)
(i) Is unable to furnish Medicare-covered items or services.
(ii) Has failed to satisfy any of the Medicare enrollment requirements.
(2)
(i) Is unable to furnish Medicare-covered items or services.
(ii) Has failed to satisfy any or all of the Medicare enrollment requirements.
(iii) Has failed to furnish Medicare covered items or services as required by the statute or regulations.
(b) [Reserved]
A Medicare contractor is required to screen all initial applications, including applications for a new practice location, and any applications received in response to a revalidation request based on a CMS assessment of risk and assignment to a level of “limited,” “moderate,” or “high.”
(a)
(i) Physician or nonphysician practitioners (including nurse practitioners, CRNAs, occupational therapists, speech/language pathologists, and audiologists) and medical groups or clinics.
(ii) Ambulatory surgical centers.
(iii) Competitive Acquisition Program/Part B Vendors.
(iv) End-stage renal disease facilities.
(v) Federally qualified health centers.
(vi) Histocompatibility laboratories.
(vii) Hospitals, including critical access hospitals, Department of Veterans Affairs hospitals, and other federally owned hospital facilities.
(viii) Health programs operated by an Indian Health Program (as defined in section 4(12) of the Indian Health Care Improvement Act) or an urban Indian organization (as defined in section 4(29) of the Indian Health Care Improvement Act) that receives funding from the Indian Health Service pursuant to Title V of the Indian Health Care Improvement Act.
(ix) Mammography screening centers.
(x) Mass immunization roster billers
(xi) Organ procurement organizations.
(xii) Pharmacies newly enrolling or revalidating via the CMS-855B application.
(xiii) Radiation therapy centers.
(xiv) Religious non-medical health care institutions.
(xv) Rural health clinics.
(xvi) Skilled nursing facilities.
(2)
(i) Verifies that a provider or supplier meets all applicable Federal regulations and State requirements for the provider or supplier type prior to making an enrollment determination.
(ii) Conducts license verifications, including licensure verifications across State lines for physicians or nonphysician practitioners and providers and suppliers that obtain or maintain Medicare billing privileges as a result of State licensure, including State licensure in States other than where the provider or supplier is enrolling.
(iii) Conducts database checks on a pre- and post-enrollment basis to ensure that providers and suppliers continue to meet the enrollment criteria for their provider/supplier type.
(b)
(i) Ambulance service suppliers.
(ii) Community mental health centers.
(iii) Comprehensive outpatient rehabilitation facilities.
(iv) Hospice organizations.
(v) Independent clinical laboratories.
(vi) Independent diagnostic testing facilities.
(vii) Physical therapists enrolling as individuals or as group practices.
(viii) Portable x-ray suppliers.
(ix) Revalidating home health agencies.
(x) Revalidating DMEPOS suppliers.
(2)
(i) Performs the “limited” screening requirements described in paragraph (a)(2) of this section.
(ii) Conducts an on-site visit.
(c)
(i) Prospective (newly enrolling) home health agencies.
(ii) Prospective (newly enrolling) DMEPOS suppliers.
(2)
(i) Performs the “limited” and “moderate” screening requirements described in paragraphs (a)(2) and (b)(2) of this section.
(ii)(A) Requires the submission of a set of fingerprints for a national background check from all individuals who maintain a 5 percent or greater direct or indirect ownership interest in the provider or supplier; and
(B) Conducts a fingerprint-based criminal history record check of the Federal Bureau of Investigation's Integrated Automated Fingerprint Identification System on all individuals who maintain a 5 percent or greater direct or indirect ownership interest in the provider or supplier.
(3)
(i) CMS imposes a payment suspension on a provider or supplier at any time in the last 10 years.
(ii) The provider or supplier—
(A) Has been excluded from Medicare by the OIG; or
(B) Had billing privileges revoked by a Medicare contractor within the previous 10 years and is attempting to establish additional Medicare billing privileges by—
(
(
(C) Has been terminated or is otherwise precluded from billing Medicaid;
(D) Has been excluded from any Federal health care program; or
(E) Has been subject to any final adverse action, as defined at § 424.502, within the previous 10 years.
(iii) CMS lifts a temporary moratorium for a particular provider or supplier type and a provider or supplier that was prevented from enrolling based on the moratorium, applies for enrollment as a Medicare provider or supplier at any time within 6 months from the date the moratorium was lifted.
(d)
(1) Must submit a set of fingerprints for a national background check.
(i) Upon submission of a Medicare enrollment application; or
(ii) Within 30 days of a Medicare contractor request.
(2) In the event the individual(s) required to submit fingerprints under paragraph (c)(2) of this section fail to submit such fingerprints in accordance with paragraph (d)(1) of this section, the provider or supplier will have its billing privileges—
(i) Denied under § 424.530(a)(1); or
(ii) Revoked under § 424.535(a)(1).
(a)
(b)
(c)
(d)
(a) Physicians, nonphysician practitioners and physician and nonphysician practitioner organizations may retrospectively bill for services when a physician or nonphysician practitioner or a physician or a nonphysician organization have met all program requirements, including State licensure requirements, and services were provided at the enrolled practice location for up to—
(1) 30 days prior to their effective date if circumstances precluded enrollment in advance of providing services to Medicare beneficiaries, or
(2) 90 days prior to their effective date if a Presidentially-declared disaster under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121-5206 (Stafford Act) precluded enrollment in advance of providing services to Medicare beneficiaries.
(b) [Reserved]
(a)
(1) The prospective provider or supplier fails to furnish complete information on the provider/supplier enrollment application within 30 calendar days from the date of the contractor request for the missing information.
(2) The prospective provider or supplier fails to furnish all required supporting documentation within 30 calendar days of submitting the enrollment application.
(3) The prospective institutional provider or supplier does not submit the application fee in the designated amount or a hardship waiver request with the Medicare enrollment application at the time of filing.
(b)
(c)
(d)
(a)
(1)
(2)
(i) Excluded from the Medicare, Medicaid and any other Federal health care programs, as defined in § 1001.2 of this chapter, in accordance with section
(ii) Debarred, suspended, or otherwise excluded from participating in any other Federal procurement or nonprocurement activity in accordance with section 2455 of the Federal Acquisition Streamlining Act (FASA).
(3)
(i) Offenses include—
(A) Felony crimes against persons, such as murder, rape, or assault, and other similar crimes for which the individual was convicted, including guilty pleas and adjudicated pretrial diversions.
(B) Financial crimes, such as extortion, embezzlement, income tax evasion, insurance fraud and other similar crimes for which the individual was convicted, including guilty pleas and adjudicated pretrial diversions.
(C) Any felony that placed the Medicare program or its beneficiaries at immediate risk (such as a malpractice suit that results in a conviction of criminal neglect or misconduct).
(D) Any felonies outlined in section 1128 of the Act.
(ii) Denials based on felony convictions are for a period to be determined by the Secretary, but not less than 10 years from the date of conviction if the individual has been convicted on one previous occasion for one or more offenses.
(4)
(5)
(i) A Medicare Part A provider is no longer operational to furnish Medicare covered items or services, or the provider fails to satisfy any of the Medicare enrollment requirements.
(ii) A Medicare Part B supplier is no longer operational to furnish Medicare covered items or services, or the supplier has failed to satisfy any or all of the Medicare enrollment requirements, or has failed to furnish Medicare covered items or services as required by the statute or regulations.
(6)
(7)
(8)
(ii) CMS may deny Medicare billing privileges upon an HHA applicant's failure to satisfy the initial reserve operating funds requirement found in 42 CFR 489.28(a).
(9)
(10)
(b)
(1) Was not appealed, the provider or supplier may reapply after its appeal rights have lapsed.
(2) Was appealed, the provider or supplier may reapply after notification that the determination was upheld.
(c)
(d)
(e)
(a)
(1)
(i) CMS may request additional documentation from the provider or supplier to determine compliance if adverse information is received or otherwise found concerning the provider or supplier.
(ii) Requested additional documentation must be submitted within 60 calendar days of request.
(2)
(i) Excluded from the Medicare, Medicaid, and any other Federal health care program, as defined in § 1001.2 of this chapter, in accordance with section 1128, 1128A, 1156, 1842, 1862, 1867 or 1892 of the Act.
(ii) Is debarred, suspended, or otherwise excluded from participating in any other Federal procurement or nonprocurement program or activity in accordance with the FASA implementing regulations and the Department of Health and Human Services nonprocurement common rule at 45 CFR part 76.
(3)
(i) Offenses include—
(A) Felony crimes against persons, such as murder, rape, assault, and other similar crimes for which the individual was convicted, including guilty pleas and adjudicated pretrial diversions.
(B) Financial crimes, such as extortion, embezzlement, income tax evasion, insurance fraud and other similar crimes for which the individual was
(C) Any felony that placed the Medicare program or its beneficiaries at immediate risk, such as a malpractice suit that results in a conviction of criminal neglect or misconduct.
(D) Any felonies that would result in mandatory exclusion under section 1128(a) of the Act.
(ii) Denials based on felony convictions are for a period to be determined by the Secretary, but not less than 10 years from the date of conviction if the individual has been convicted on one previous occasion for one or more offenses.
(4)
(5)
(i) A Medicare Part A provider is no longer operational to furnish Medicare covered items or services, or the provider fails to satisfy any of the Medicare enrollment requirements.
(ii) A Medicare Part B supplier is no longer operational to furnish Medicare covered items or services, or the supplier has failed to satisfy any or all of the Medicare enrollment requirements, or has failed to furnish Medicare covered items or services as required by the statute or regulations.
(6)
(B) The hardship exception is not granted and the institutional provider does not submit the applicable application form or application fee within 30 days of being notified that the hardship exception request was denied.
(ii)(A) Either of the following occurs:
(
(
(B) The provider or supplier lacks sufficient funds in the account at the banking institution whose name is imprinted on the check or other banking instrument to pay the application fee; or
(C) There is any other reason why CMS or its Medicare contractor is unable to deposit the application fee into a government-owned account.
(7)
(8)
(9)
(10)
(ii) A provider or supplier that meets the revocation criteria specified in paragraph (a)(10)(i) of this section, is subject to revocation for a period of
(11)
(12)
(ii) Medicare may not terminate unless and until a provider or supplier has exhausted all applicable appeal rights.
(b)
(c)
(2) The re-enrollment bar is a minimum of 1 year, but not greater than 3 years depending on the severity of the basis for revocation.
(3) CMS may waive the re-enrollment bar if it has revoked a provider or supplier under § 424.535(a)(6)(i) based upon the failure of the provider or supplier to submit an application fee or a hardship exception request with an enrollment application upon revalidation.
(d)
(1) The provider or supplier must re-enroll in the Medicare program through the completion and submission of a new applicable enrollment application and applicable documentation, as a new provider or supplier, for validation by CMS.
(2) Providers must be resurveyed and recertified by the State survey agency as a new provider and must establish a new provider agreement with CMS's Regional Office.
(e)
(f)
(g)
(h)
(a)
(1) The provider or supplier does not submit any Medicare claims for 12 consecutive calendar months. The 12 month period will begin the 1st day of the 1st month without a claims submission through the last day of the 12th month without a submitted claim.
(2) The provider or supplier does not report a change to the information supplied on the enrollment application within 90 calendar days of when the change occurred. Changes that must be reported include, but are not limited to, a change in practice location, a change of any managing employee, and a change in billing services. A change in ownership or control must be reported within 30 calendar days as specified in § 424.520(b) and § 424.550(b).
(b)
(2) Providers and suppliers deactivated for nonsubmission of a claim are required to recertify that the enrollment information currently on file with Medicare is correct and furnish any missing information as appropriate. The provider or supplier must meet all current Medicare requirements in place at the time of reactivation, and be prepared to submit a valid Medicare claim.
(3) Except as provided in paragraph (b)(3)(i) of this section, reactivation of Medicare billing privileges does not require a new certification of the provider or supplier by the State survey agency or the establishment of a new provider agreement.
(i) An HHA whose Medicare billing privileges are deactivated under the provisions found at paragraph (a) of this section must obtain an initial State survey or accreditation by an approved accreditation organization before its Medicare billing privileges can be reactivated.
(ii) [Reserved]
(c)
(a)
(1)
(ii) When a provider appeals the revocation of billing privileges and the termination of its provider agreement, there will be one appeals process which will address both matters. The appeal procedures for revocation of Medicare billing privileges will apply.
(2)
(b) A provider or supplier whose billing privileges are deactivated may file a rebuttal in accordance with § 405.374 of this chapter.
(c) The provider or supplier must be able to demonstrate that it meets the enrollment requirements and it must be able to make available any documents and records that support the provisions of this regulation and the Medicare enrollment application if requested by CMS or its agents.
(a)
(b)
(1) Unless an exception in (b)(2) of this section applies, if there is a change in majority ownership of a home health agency by sale (including asset sales, stock transfers, mergers, and consolidations) within 36 months after the effective date of the HHA's initial enrollment in Medicare or within 36 months after the HHA's most recent change in majority ownership, the provider agreement and Medicare billing privileges do not convey to the new owner. The prospective provider/owner of the HHA must instead:
(i) Enroll in the Medicare program as a new (initial) HHA under the provisions of § 424.510 of this subpart.
(ii) Obtain a State survey or an accreditation from an approved accreditation organization.
(2)(i) The HHA submitted two consecutive years of full cost reports. For purposes of this exception, low utilization or no utilization cost reports do not qualify as full cost reports.
(ii) An HHA's parent company is undergoing an internal corporate restructuring, such as a merger or consolidation.
(iii) The owners of an existing HHA are changing the HHA's existing business structure (for example, from a corporation to a partnership (general or limited); from an LLC to a corporation; from a partnership (general or limited) to an LLC) and the owners remain the same.
(iv) An individual owner of an HHA dies.
(c)
(a) No payment may be made for otherwise Medicare covered items or services furnished to a Medicare beneficiary by suppliers of durable medical equipment, prosthetics, orthotics, and other supplies unless the supplier obtains (and renews, as set forth in section 1834(j) of the Act) Medicare billing privileges.
(b) No payment may be made for otherwise Medicare covered items or services furnished to a Medicare beneficiary by a provider or supplier if the billing privileges of the provider or supplier are deactivated, denied, or revoked. The Medicare beneficiary has no financial responsibility for expenses, and the provider or supplier must refund on a timely basis to the Medicare beneficiary any amounts collected from the Medicare beneficiary for these otherwise Medicare covered items or services.
(c) If any provider or supplier furnishes an otherwise Medicare covered item or service for which payment may not be made by reason of paragraph (b) of this section, any expense incurred for such otherwise Medicare covered item or service shall be the responsibility of the provider or supplier. The provider or supplier may also be criminally liable for pursuing payments that may not be made by reason of paragraph (b) of this section, in accordance with section 1128B(a)(3) of the Act.
A physician or nonphysician practitioner organization, physician or nonphysician practitioner that does not comply with the reporting requirements specified in § 424.516(d)(1)(ii) and (iii) of this subpart is assessed an overpayment back to the date of the final adverse action or change in practice location. Overpayments are processed in accordance with part 405 subpart C of this chapter.
(a)
(ii) CMS will announce the temporary enrollment moratorium in a
(iii) The temporary moratorium does not apply to changes in practice location, changes in provider or supplier information such as phone number, address or changes in ownership (except changes in ownership of home health agencies that would require an initial enrollment under § 424.550).
(iv) The temporary enrollment moratorium does not apply to any enrollment application that has been approved by the enrollment contractor but not yet entered into PECOS at the time the moratorium is imposed.
(2)
(i) CMS determines that there is a significant potential for fraud, waste or abuse with respect to a particular provider or supplier type or particular geographic area or both. CMS's determination is based on its review of existing data, and without limitation, identifies a trend that appears to be associated with a high risk of fraud, waste or abuse, such as a—
(A) Highly disproportionate number of providers or suppliers in a category relative to the number of beneficiaries; or
(B) Rapid increase in enrollment applications within a category;
(ii) A State Medicaid program has imposed a moratorium on a group of Medicaid providers or suppliers that are also eligible to enroll in the Medicare program;
(iii) A State has imposed a moratorium on enrollment in a particular geographic area or on a particular provider or supplier type or both; or
(iv) CMS, in consultation the HHS OIG or the Department of Justice or both and with the approval of the CMS Administrator identifies either or both of the following as having a significant potential for fraud, waste or abuse in the Medicare program:
(A) A particular provider or supplier type.
(B) Any particular geographic area.
(b)
(c)
(d)
(1) The President declares an area a disaster under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121-5206 (Stafford Act).
(2) Circumstances warranting the imposition of a moratorium have abated or CMS has implemented program safeguards to address the program vulnerability.
(3) The Secretary has declared a public health emergency under section 319 of the Public Health Service Act in the area subject to a temporary moratorium.
(4) In the judgment of the Secretary, the moratorium is no longer needed.
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh)
(a)
(b)
For the purposes of this part, the following definitions apply:
(1) Is entitled to benefits under Part A, enrolled under Part B, or both (including an individual enrolled in fee-for-service Medicare, in a Medicare+Choice plan, or in another Medicare managed care plan);
(2) Is in need of coverage for a service that is denied based on an applicable LCD (in the relevant jurisdiction) or an NCD, regardless of whether the service was received; and
(3) Has obtained documentation of the need by the beneficiary's treating physician.
(1) It is ordinarily protected from disclosure in accordance with 45 CFR part 164, under the Trade Secrets Act (18 U.S.C. 1905) or under Exemptions 4 or 5 of the Freedom of Information Act (5 U.S.C. 552) as specified in 45 CFR 5.65.
(2) The party who possesses the right to protection of the information from public release or disclosure has not provided its consent to the public release or disclosure of the information. Any information submitted by the public that is not marked proprietary is not considered proprietary.
In counting days, Saturdays, Sundays, and Federal holidays are included. If a due date falls on a Saturday, Sunday, or Federal holiday, the due date is the next Federal working day.
Any party submitting material, except for material for which a privilege is asserted, or proprietary data, to the ALJ or the Board after that party's initial challenge must serve the material on all other parties at the same time.
(a) Upon the receipt of an acceptable LCD complaint as described in § 426.400, an ALJ conducts a review of a challenged provision (or provisions) of an LCD using the reasonableness standard.
(b) Upon the receipt of an acceptable NCD complaint as described in § 426.500, the Board conducts an NCD review of a challenged provision (or provisions) of an NCD using the reasonableness standard.
(c) The procedures established in this part governing the review of NCDs also apply in cases in which a deemed NCD is challenged.
(a) LCD and NCD reviews are distinct from the claims appeal processes set forth in part 405, subparts G and H; part 417, subpart Q; and part 422, subpart M of this chapter.
(b) An aggrieved party must notify the ALJ or the Board, as appropriate, regarding the submission and disposition of any pending claim or appeal relating to the subject of the aggrieved party's LCD or NCD complaint. This reporting obligation continues through the entire LCD or NCD review process.
(a) Only an aggrieved party may initiate a review of an LCD or NCD (including a deemed NCD), or provisions of an LCD or NCD by filing an acceptable complaint.
(b) Neither an ALJ nor the Board recognizes as valid any attempt to assign rights to request review under section 1869(f) of the Act.
(a) Only LCDs or NCDs (including deemed NCDs) that are currently effective may be challenged.
(b) Some items are not reviewable under this part, including the following:
(1) Pre-decisional materials, including—
(i) Draft LCDs;
(ii) Template LCDs or suggested LCDs; and
(iii) Draft NCDs, including national coverage decision memoranda.
(2) Retired LCDs or withdrawn NCDs.
(3) LCD or NCD provisions that are no longer in effect due to revisions or reconsiderations.
(4) Interpretive policies that are not an LCD or NCD.
(5) Contractor decisions that are not based on section 1862(a)(1)(A) of the Act.
(6) Contractor claims processing edits.
(7) Payment amounts or methodologies.
(8) Procedure coding issues, including determinations, methodologies, definitions, or provisions.
(9) Contractor bulletin articles, educational materials, or Web site frequently asked questions.
(10) Any M+C organization or managed care plan policy, rule, or procedure.
(11) An individual claim determination.
(12) Any other policy that is not an LCD or an NCD as set forth in § 400.202 of this chapter.
During an LCD or NCD review, an aggrieved party bears the burden of proof and the burden of persuasion for the issue(s) raised in a complaint. The burden of persuasion is judged by a preponderance of the evidence.
(a) The process for review of new evidence is initiated once the ALJ/Board completes the taking of evidence.
(b) If an aggrieved party has submitted new evidence pertaining to the LCD/NCD provision(s) in question, and the ALJ or the Board finds that evidence admissible, the ALJ or the Board reviews the record as a whole and decide whether the new evidence has the potential to significantly affect the ALJ's or the Board's evaluation of the LCD/NCD provision(s) in question under the reasonableness standard.
(c) If the ALJ or the Board determines that the new evidence does not have the potential to significantly affect the ALJ's or the Board's evaluation of the LCD/NCD provision(s) in question under the reasonableness standard, this evidence is included in the review record, and the review goes forward to a decision on the merits.
(d) If the ALJ or the Board determines that the new evidence has the potential to significantly affect the ALJ's or the Board's evaluation of the LCD or NCD provision(s) in question under the reasonableness standard, then the ALJ or the Board—
(1) Stays the proceedings and ensures that the contractor or CMS, whichever is appropriate, has a copy of the new evidence for its examination; and
(2) Allows the contractor/CMS 10 days, generally, to examine the new evidence, and to decide whether the contractor or CMS initiates a reconsideration.
(e) If the contractor or CMS informs the ALJ or the Board by the end of the 10 days that a reconsideration is initiated, and then the ALJ or the Board—
(1) Continues the stay in proceedings; and
(2) Sets a reasonable timeframe—
(i) For LCDs, of not more than 90 days, by which the contractor completes the reconsideration; or
(ii) For NCDs, in compliance with the timeframes specified in section 1862(1) of the Act, by which CMS completes the reconsideration.
(f) The ALJ or Board lifts the stay in proceedings and continues the review on the challenged provision(s) of the original LCD or NCD, including the new evidence in the review record, if the contractor or CMS—
(1) Informs the ALJ or Board that a reconsideration is not initiated; or
(2) Does not meet—
(i) For LCDs, the 90-day reconsideration timeframe; or
(ii) For NCDs, the reconsideration timeframe specified by the Board, in compliance with section 1862(l) of the Act.
(g) If an LCD or NCD is reconsidered and revised within the timeframe allotted by the ALJ or Board, then the revised LCD or NCD and any supplement to the LCD or NCD record is forwarded to the ALJ or the Board and all parties and the review proceeds on the LCD or NCD.
(a)
(b)
(1) 6 months of the issuance of a written statement from each aggrieved party's treating practitioner, in the case of aggrieved parties who choose to file an LCD challenge before receiving the service; or
(2) 120 days of the initial denial notice, in the case of aggrieved parties who choose to file an LCD challenge after receiving the service.
(c)
(1)
(i) Name.
(ii) Mailing address.
(iii) State of residence, if different from mailing address.
(iv) Telephone number, if any.
(v) Health Insurance Claim number, if applicable.
(vi) E-mail address, if applicable.
(2)
(i) Name.
(ii) Mailing address.
(iii) Telephone number.
(iv) E-mail address, if any.
(v) Copy of the written authorization to represent the beneficiary.
(3)
(4)
(i) Name of the contractor using the LCD.
(ii) Title of LCD being challenged.
(iii) The specific provision (or provisions) of the LCD adversely affecting the aggrieved party.
(5)
(6)
(ii) Any documents or portions of documents that include proprietary data must be marked “proprietary data,” and include a legal basis for that assertion.
(iii) Proprietary data submitted by a manufacturer concerning a drug or device for which the manufacturer has submitted information to the Food and Drug Administration, must be considered and given substantive weight only when supported by an affidavit certifying that the submission contains true and correct copies of all data submitted by the manufacturer to the
(d)
(i) Each aggrieved party named in the joint complaint has a similar medical condition or there are other bases for combining the complaints.
(ii) Each aggrieved party named in the joint complaint is filing the complaint in regard to the same provision(s) of the same LCD.
(2)
(i) The beneficiary-identifying information described in paragraph (c)(1) of this section for each aggrieved party named in the joint complaint.
(ii) The LCD-identifying information described in paragraph (c)(2) of this section.
(iii) The documentation described in paragraphs (c)(3) and (c)(4) of this section.
(3)
(i) Before receiving the service, must file with the ALJ a joint complaint within 6 months of the written statement from each aggrieved party's treating physician.
(ii) After receiving the service, must file with the ALJ a complaint within 120 days of each aggrieved party's initial denial notice.
Once an acceptable complaint is filed, the aggrieved party may submit additional new evidence without withdrawing the complaint until the ALJ closes the record.
(a) An ALJ conducts a fair and impartial hearing, avoids unnecessary delay, maintains order, and ensures that all proceedings are recorded.
(b) An ALJ defers only to reasonable findings of fact, reasonable interpretations of law, and reasonable applications of fact to law by the Secretary.
(c) The ALJ has the authority to do any of the following:
(1) Review complaints by an aggrieved party (or aggrieved parties).
(2) Dismiss complaints that fail to comply with § 426.400.
(3) Set and change the date, time, and place of a hearing upon reasonable notice to the parties.
(4) Continue or recess a hearing for a reasonable period of time.
(5) Hold conferences to identify or simplify the issues, or to consider other matters that may aid in the expeditious disposition of the proceeding.
(6) Consult with scientific and clinical experts on his or her own motion concerning clinical or scientific evidence.
(7) Set schedules for submission of exhibits and written reports of experts.
(8) Administer oaths and affirmations.
(9) Examine witnesses.
(10) Issue subpoenas requiring the attendance of witnesses at hearings as permitted by this part.
(11) Issue subpoenas requiring the production of existing documents before, and relating to, the hearing as permitted by this part.
(12) Rule on motions and other procedural matters.
(13) Stay the proceedings in accordance with § 426.340.
(14) Regulate the scope and timing of documentary discovery as permitted by this part.
(15) Regulate the course of a hearing and the conduct of representatives, parties, and witnesses.
(16) Receive, rule on, exclude, or limit evidence, as provided in § 426.340.
(17) Take official notice of facts, upon motion of a party.
(18) Decide cases, upon the motion of a party, by summary judgment when there is no disputed issue of material fact.
(19) Conduct any conference, argument, or hearing in person or, upon agreement of the parties, by telephone, picture-tel, or any other means.
(20) Issue decisions.
(21) Exclude a party from an LCD review for failure to comply with an ALJ
(22) Stay the proceedings for a reasonable time when all parties voluntarily agree to mediation or negotiation, and provide mediation services upon request.
(d) The ALJ does not have authority to do any of the following under this part:
(1) Conduct an LCD review or conduct LCD hearings on his or her own motion or on the motion of a nonaggrieved party.
(2) Issue a decision based on any new evidence without following § 426.340, regarding procedures for review of new evidence.
(3) Review any decisions by contractors to develop a new or revised LCD.
(4) Conduct a review of any draft, retired, archived, template, or suggested LCDs.
(5) Conduct a review of any policy that is not an LCD, as defined in § 400.202 of this chapter.
(6) Conduct a review of any NCD according to section 1869(f)(1)(A)(i) of the Act.
(7) Conduct a review of the merits of an unacceptable LCD complaint as discussed in § 426.410.
(8) Allow participation by individuals or entities other than—
(i) The aggrieved party and/or his/her representative;
(ii) CMS and/or the contractor; and
(iii) Experts called by the parties or the ALJ.
(9) Compel the parties to participate in a mediation process or to engage in settlement negotiations.
(10) Deny a request for withdrawal of a complaint by an aggrieved party.
(11) Compel the contractor to conduct studies, surveys, or develop new information to support an LCD record.
(12) Deny a contractor the right to reconsider, revise or retire an LCD.
(13) Find invalid applicable Federal statutes, regulations, rulings, or NCDs.
(14) Enter a decision specifying terms to be included in an LCD.
No party or person (except employees of the ALJ's office) communicates in any way with the ALJ on any substantive matter at issue in a case, unless on notice and opportunity for all parties to participate. This provision does not prohibit a person or party from inquiring about the status of a case or asking routine questions concerning administrative functions or procedures.
(a)
(1) Dockets the complaint.
(2) Determines whether the complaint is—
(i) The first challenge to a particular LCD; or
(ii) Related to a pending LCD review.
(3) Forwards the complaint to the ALJ that conducts the review. In cases related to pending reviews, the complaint generally is forwarded to the ALJ who is conducting the review.
(b)
(1) The complaint is being submitted by an aggrieved party or, in the case of a joint complaint, that each individual named in the joint complaint is an aggrieved party. (In determining if a complaint is acceptable, the ALJ assumes that the facts alleged by the treating physician's documentation regarding the aggrieved party's (or parties') clinical condition are true.)
(2) The complaint meets the requirements for a valid complaint in § 426.400 and does not challenge one of the documents in § 426.325(b).
(c)
(2) If the aggrieved party (or parties) fail(s) to submit an acceptable amended complaint within a reasonable timeframe as determined by the ALJ, the ALJ must issue a decision dismissing the unacceptable complaint.
(3) If a complaint is determined unacceptable after one amendment, the beneficiary is precluded from filing
(d)
(1) Sends a letter to the aggrieved party (or parties) acknowledging the complaint and informing the aggrieved party (or parties) of the docket number and the deadline for the contractor to produce the LCD record.
(2) Forwards a copy of the complaint, any evidence submitted in the complaint, and the letter described in paragraph (d)(1) of this section to the applicable contractor and CMS.
(3) Requires CMS or the contractor to send a copy of the LCD record to the ALJ and all parties to the LCD review within 30 days of receiving the ALJ's letter, the copy of the complaint, and any associated evidence, subject to extension for good cause shown.
(e)
(i) The complaints are in regard to the same provision(s) of the same LCD or there are other bases for consolidating the complaints.
(ii) The complaints contain common questions of law, common questions of fact, or both.
(iii) Consolidating the complaints does not unduly delay the ALJ's decision.
(2)
(i) Provides notification that the LCD review is consolidated and informs all parties of the docket number of the consolidated review.
(ii) Makes a single record of the proceeding.
(iii) Considers the relevant evidence introduced in each LCD complaint as introduced in the consolidated review.
(3)
CMS may provide to the ALJ, and all parties to the LCD review, information identifying the person who represents the contractor or CMS, if necessary, in the LCD review process.
Medicare MCOs and Medicaid State agencies have no role in the LCD review process. However, once the ALJ has issued its decision, the decision is made available to all Medicare MCOs and State agencies.
(a) The contractor may review any new evidence that is submitted, regardless of whether the ALJ has stayed the proceedings, including but not limited to—
(1) New evidence submitted with the initial complaint;
(2) New evidence submitted with an amended complaint;
(3) New evidence produced during discovery;
(4) New evidence produced when the ALJ consults with scientific and clinical experts; and
(5) New evidence presented during any hearing.
(b) The contractor may submit a statement regarding whether the new evidence is significant under § 426.340, within such deadline as the ALJ may set.
(a)
(1) The LCD being challenged.
(2) Any medical evidence considered on or before the date the LCD was issued, including, but not limited to, the following:
(i) Scientific articles.
(ii) Technology assessments.
(iii) Clinical guidelines.
(iv) Statements from clinical experts, medical textbooks, claims data, or other indication of medical standard of practice.
(3) Comment and Response Document (a summary of comments received by the contractor concerning the draft LCD).
(4) An index of documents considered that are excluded under paragraph (b) of this section.
(b)
(1) Proprietary data or privileged information.
(2) Any new evidence.
The LCD record furnished to the ALJ includes the following:
(a) Documents included in § 426.418(a).
(b) Privileged information and proprietary data considered that must be filed with the ALJ under seal.
(a) A contractor may retire an LCD or LCD provision under review before the date the ALJ issues a decision regarding that LCD. Retiring an LCD or LCD provision under review has the same effect as a decision under § 426.460(b).
(b) A contractor may revise an LCD under review to remove or amend the LCD provision listed in the complaint through the reconsideration process before the date the ALJ issues a decision regarding that LCD. Revising an LCD under review to remove the LCD provision in question has the same effect as a decision under § 426.460(b).
(c) A contractor must notify the ALJ within 48 hours of—
(1) Retiring an LCD or LCD provision that is under review; or
(2) Issuing a revised version of the LCD that is under review.
(d) If the contractor issues a revised LCD, the contractor forwards a copy of the revised LCD to the ALJ.
(e) The ALJ must take the following actions upon receiving a notice that the contractor has retired or revised an LCD under review:
(1) If, before the ALJ issues a decision, the ALJ receives notice that the contractor has retired the LCD or revised the LCD to completely remove the provision in question, the ALJ must dismiss the complaint and inform the aggrieved party(ies) who sought the review that he or she or they receive individual claim review without the retired/withdrawn provision(s).
(2) If, before the ALJ issues a decision, the ALJ receives notice that the contractor has revised the LCD provision in question but has not removed it altogether, the ALJ must continue the review based on the revised LCD. In this case, the contractor must send a copy of the supplemental record to the ALJ and all parties. In that circumstance, the ALJ permits the aggrieved party to respond to the revised LCD and supplemental record.
(a)
(b)
(c)
(2)
(3)
(a)
(b)
(c)
(2) Issuance of a decision finding the record complete and adequate to support the validity of the LCD ends the review process.
(3) If the ALJ determines that the LCD record is not complete and adequate to support the validity of the LCD, the ALJ permits discovery and the taking of evidence in accordance with § 426.432 and § 426.440 and evaluates the LCD in accordance with § 426.431.
(d) The process described in paragraphs (a), (b), and (c) of this section applies when an LCD record has been supplemented, except that discovery and the taking of evidence are not repeated. The period for the aggrieved party to file a statement begins when the aggrieved party receives the supplement.
(a)
(1) Confine the LCD review to the provision(s) of the LCD raised in the aggrieved party's complaint.
(2) Conduct a hearing, unless the matter can be decided on the written record.
(3) Close the LCD review record to the taking of evidence.
(4) Treat as precedential any previous Board decision under § 426.482 that involves the same LCD provison(s), same specific issue and facts in question, and the same clinical conditions.
(5) Issue a decision as described in § 426.447.
(b)
(1) Consult with appropriate scientific or clinical experts concerning evidence.
(2) Consider any previous ALJ decision made under § 426.447 regarding the
(c)
(a)
(b)
(2)
(i) Is irrelevant or unduly repetitive;
(ii) Is unduly costly or burdensome; or
(iii) Unduly delays the proceeding.
(c)
(d)
(e)
(f)
(g)
(a)
(b)
(1) Designate the witnesses.
(2) Specify any evidence to be produced.
(3) Describe the address and location with sufficient particularity to permit the witnesses to be found.
(4) State the pertinent facts that the party expects to establish by the witnesses or documents and whether other evidence may establish without the use of a subpoena.
(c)
(d)
(e)
(1) Be issued in the name of the ALJ.
(2) Include the docket number and title of the LCD under review.
(3) Provide notice that the subpoena is issued according to sections 1872 and 205(d) and (e) of the Act.
(4) Specify the time and place at which the witness is to appear and any evidence the witness is to produce.
(f)
(g)
(h)
(a) Except as provided in this part, the ALJ is not bound by the Federal Rules of Evidence. However, the ALJ may apply the Federal Rules of Evidence when appropriate, for example, to exclude unreliable evidence.
(b) The ALJ must exclude evidence that (s)he determines is clearly irrelevant, immaterial, or unduly repetitive.
(c) The ALJ may accept privileged information or proprietary data, but must maintain it under seal.
(d) The ALJ may permit the parties to introduce the testimony of expert witnesses on scientific and clinical issues, rebuttal witnesses, and other relevant evidence. The ALJ may require that the testimony of expert witnesses be submitted in the form of a written report, accompanied by the curriculum vitae of the expert preparing the report.
(e) Experts submitting reports must be available for cross-examination at an evidentiary hearing upon request of the ALJ or a party to the proceeding, or the reports will be excluded from the record.
(f) Except as set forth in paragraph (c) of this section or unless otherwise ordered by the ALJ for good cause shown, all documents and other evidence offered or taken for the record are open to examination by all parties.
(a) The ALJ may, at the request of any party, or on his or her own motion, dismiss a complaint if the aggrieved party fails to do either of the following:
(1) Attend or participate in a prehearing conference (the pre-hearing may be conducted by telephone) or hearing without good cause shown.
(2) Comply with a lawful order of the ALJ without good cause shown.
(b) The ALJ must dismiss any complaint concerning LCD provision(s) if the following conditions exist:
(1) The ALJ does not have the authority to rule on that provision under § 426.405(d).
(2) The complaint is not timely. (See § 426.400(b).)
(3) The complaint is not filed by an aggrieved party.
(4) The complaint is filed by an individual who fails to provide an adequate statement of need for the service from the treating physician.
(5) The complaint challenges a provision or provisions of an NCD. (See § 426.405, regarding the authority of the ALJ.)
(6) The contractor notifies the ALJ that the LCD provision(s) is (are) no longer in effect.
(7) The aggrieved party withdraws the complaint. (See § 426.423 for requirements related to withdrawing a complaint regarding an LCD under review.)
(a) A witness testifying at a hearing before an ALJ receives the same fees and mileage as witnesses in Federal district courts of the United States. If the witness qualifies as an expert, he or she is entitled to an expert witness fee. Witness fees are paid by the party seeking to present the witness.
(b) If an ALJ requests expert testimony, the appropriate office overseeing the ALJ is responsible for paying all applicable fees and mileage, unless the expert waives payment.
The ALJ must ensure that all hearings are open to the public and are electronically, mechanically or stenographically reported. Except for privileged information and proprietary data that are filed under seal, all evidence upon which the ALJ relies for decision must be admitted into the public record. All medical reports, exhibits, and any other pertinent document, either in whole or in material part, must be offered, marked for identification, and retained in the case record.
An ALJ must issue to all parties to the LCD review, within 90 days of closing the LCD review record to the taking of evidence, one of the following:
(a) A written decision, including a description of appeal rights.
(b) A written notification stating that a decision is pending, and an approximate date of issuance for the decision.
(a)
(1) A determination that the provision of the LCD is valid under the reasonableness standard.
(2) A determination that the provision of the LCD is not valid under the reasonableness standard.
(3) A statement dismissing the complaint regarding the LCD and a rationale for the dismissal.
(4) A determination that the LCD record is complete and adequate to support the validity of the LCD provisions under the reasonableness standard.
(b)
(1) The date of issuance.
(2) The docket number of the LCD review.
(3) A statement as to whether the aggrieved party has filed a claim for the service(s) named in the complaint, the date(s)-of-service, and the disposition, if known.
(4) A basis for concluding that the LCD was or was not valid based on the application of the reasonableness standard to the record before the ALJ, including the contractor's:
(i) Findings of fact.
(ii) Interpretations of law.
(iii) Applications of fact to law.
(5) A summary of the evidence reviewed. If proprietary or privileged data were submitted under seal, the decision must state whether the data were material and what role they played in the determination, but without disclosing the substance or contents of the evidence under seal. A separate statement of the rationale for the ALJ's treatment of the sealed evidence must be prepared and kept under seal itself. If the ALJ decision is appealed to the Board, this statement must be provided to the Board under seal.
(6) A statement regarding appeal rights.
An ALJ's decision may not do any of the following:
(a) Order CMS or its contractors to add any language to a provision or provisions of an LCD.
(b) Order CMS or its contractors to pay a specific claim.
(c) Set a time limit for CMS or its contractors to establish a new or revised LCD.
(d) Review or evaluate an LCD other than the LCD under review.
(e) Include a requirement for CMS or its contractors that specifies payment, coding, or systems changes for an LCD, or deadlines for implementing these types of changes.
(f) Order or address how a contractor(s) must implement an LCD.
When appropriate, the ALJ may limit a decision holding invalid a specific provision(s) of an LCD to specific clinical indications and for similar conditions.
(a)
(1) The LCD complaint.
(2) The LCD and LCD record.
(3) The supplemental LCD record, if applicable.
(4) Transcripts of record.
(5) Any other relevant evidence gathered under § 426.440.
(6) The ALJ's decision.
(b)
(a)
(b)
(1)
(ii) If a revised LCD is issued, the contractor, the M+C organization, and any other Medicare managed care organization within the contractor's jurisdiction uses the revised LCD in reviewing claim or appeal submissions or request for services delivered or services performed on or after the effective date of the revised LCD.
(iii) If the aggrieved party who sought the review has not yet submitted a claim, the contractor adjudicates the claim without using the provision(s) of the LCD that the ALJ found invalid.
(iv) In either case, the claim and any subsequent claims for the service provided under the same circumstances is adjudicated without using the LCD provision(s) found invalid.
(2)
After the ALJ has made a decision regarding an LCD complaint, the ALJ sends a written notice of the decision to each party. The notice must—
(a) State the outcome of the review; and
(b) Inform each party to the determination of his or her rights to seek further review if he or she is dissatisfied with the determination, and the time limit under which an appeal must be requested.
The contractor may not reinstate an LCD provision(s) found to be unreasonable unless the contractor has a different basis (such as additional evidence) than what the ALJ evaluated.
(a)
(1) States that a provision of an LCD is valid under the reasonableness standard; or
(2) Dismisses a complaint regarding an LCD (except as prohibited in paragraph (b) of this section).
(b)
(c)
(2) The appeal request must be submitted to the Board in accordance with paragraph (e) of this section.
(d)
(1) The contractor has retired the LCD provision(s) under review.
(2) The aggrieved party who filed the complaint has withdrawn the complaint.
(e)
(f)
(i) The full names and addresses of the parties, including the name of the LCD.
(ii) The date of issuance of the ALJ's decision.
(iii) The docket number that appears on the ALJ's decision.
(iv) A statement identifying the part(s) of the ALJ's decision that are being appealed.
(2) If an appeal described in paragraph (a) of this section is filed with the Board later than the date described in paragraph (c) of this section, it must include a rationale stating why the Board must accept the late appeal.
(3) An appeal described in paragraph (a) of this section must include a statement explaining why the ALJ's decision should be reversed.
(a) Failure to timely appeal without good cause shown waives the right to challenge any part(s) of the ALJ's decision under § 426.465.
(b) Unless the Board finds good cause shown for late filing, an untimely appeal is dismissed.
(c) If a party does not timely appeal any part(s) of the ALJ's decision on an LCD review to the Board, as provided in this subpart, then the ALJ's decision is final and not subject to further review.
(a)
(1) Dockets the appeal either separately or with similar appeals.
(2) Assigns a docket number.
(b)
(c)
(d)
(1) Sends a letter to the appellant to acknowledge that the appeal is acceptable, and informs them of the docket number.
(2) Forwards a copy of the appeal and the letter described in paragraph (d)(1) of this section to all parties involved in the appeal.
(3) Requires the ALJ to send a copy of the ALJ's LCD review record (maintaining any sealed documents) to the Board and a copy of the public record to all parties involved in the appeal.
(e)
(a)
(1) Permits the party that did not file the appeal an opportunity to respond to the appeal;
(2) Hears oral argument (which may be held by telephone) if the Board determines that oral argument would be helpful to the Board's review of the ALJ decision;
(3) Reviews the LCD review record and the parties' arguments; and
(4) Issues a written decision either upholding, modifying, or reversing the ALJ decision, or remanding the case to the ALJ for further proceedings.
(b)
(2) If the ALJ erred in determining that the contractor's record was complete and adequate to support the validity of the LCD, the Board remands the case to the ALJ for discovery and the taking of evidence.
(3) If a party alleges a prejudicial error of procedure, and the Board determines that such an error was made, the Board may remand the case to the ALJ for further proceedings consistent with the Board decision or may take other appropriate steps to correct the procedural error.
(4) Harmless error is not a basis for reversing an ALJ decision.
(c)
(d)
A contractor may retire or revise an LCD during the Board's review of an ALJ's decision using the same process described in § 426.420. If an LCD is retired or revised to remove completely the challenged provision(s), the aggrieved party who sought the review is entitled to individual claim review provided at § 426.488(b).
(a)
(b)
(c)
(2)
The Board must issue a written decision, including a description of appeal rights, to all parties to the review of the ALJ decision.
(a)
(1) A statement upholding the part(s) of the ALJ decision named in the appeal.
(2) A statement reversing the part(s) of the ALJ decision named in the appeal.
(3) A statement modifying the part(s) of the ALJ decision named in the appeal.
(4) A statement dismissing the appeal of an ALJ decision and a rationale for the dismissal.
(b)
(1) The date of issuance.
(2) The docket number of the review of the ALJ decision.
(3) A summary of the ALJ's decision.
(4) A rationale for the basis of the Board's decision.
A Board decision must not do any of the following:
(a) Order CMS or its contractors to add any language to a provision or provisions of an LCD.
(b) Order CMS or its contractors to pay a specific claim.
(c) Set a time limit to establish a new or revised LCD.
(d) Review or evaluate an LCD other than the LCD named in the ALJ's decision.
(e) Include a requirement for CMS or its contractors that specifies payment, coding, or system changes for an LCD or deadlines for implementing these changes.
(f) Order CMS or its contractors to implement an LCD in a particular manner.
(a)
(1) The LCD complaint.
(2) The LCD and LCD record.
(3) The supplemental LCD record, if applicable.
(4) Transcripts of record.
(5) Any other relevant evidence gathered under § 426.440.
(6) The ALJ's decision.
(7) The Board's decision.
(b)
(c)
(a)
(b)
(c)
(a)
(1) Notifies each aggrieved party who sought the LCD review, through his or her representative or at his or her last known address, the contractor, and CMS of the Board's remand decision; and
(2) Explains why the case is being remanded and the specific actions ordered by the Board.
(b)
A decision by the Board (other than a remand) constitutes a final agency action and is subject to judicial review. Neither the contractor nor CMS may appeal a Board decision.
(a)
(b)
(1) 6 months of the written statement from each aggrieved party's treating physician, in the case of aggrieved parties who choose to file an NCD challenge before receiving the service; or
(2) 120 days of the initial denial notice, in the case of aggrieved parties who choose to file an NCD challenge after receiving the service.
(c)
(1)
(i) Name.
(ii) Mailing address.
(iii) State of residence, if different from mailing address.
(iv) Telephone number, if any.
(v) Health Insurance Claim number, if applicable.
(vi) Email address, if applicable.
(2)
(i) Name.
(ii) Address.
(iii) Telephone number.
(iv) E-mail address (if any)
(v) Copy of the written authorization to represent the beneficiary.
(3)
(4)
(i) Title of NCD being challenged.
(ii) The specific provision or provisions of the NCD adversely affecting the aggrieved party.
(5)
(6)
(ii) Any documents or portions of documents that include proprietary data must be marked “proprietary data,” and include a legal basis for that assertion.
(iii) Proprietary data submitted by a manufacturer concerning a drug or device for which the manufacturer has submitted information to the Food and Drug Administration, must be considered and given substantive weight only when supported by an affidavit certifying that the submission contains true and correct copies of all data submitted by the manufacturer to the Food and Drug Administration in relation to that drug or device.
(d)
(i) Each aggrieved party named in the joint complaint has a similar medical condition or there are other bases for combining the complaints.
(ii) Each aggrieved party named in the joint complaint is filing the complaint in regard to the same provision(s) of the same NCD.
(2)
(i) The beneficiary-identifying information described in paragraph (c)(1) of this section for each aggrieved party named in the joint complaint.
(ii) The NCD-identifying information described in paragraph (c)(2) of this section.
(iii) The documentation described in paragraphs (c)(3) and (c)(4) of this section.
(3)
(i) Before receiving the service, must file with the Board a joint complaint within 6 months of the written statement from each aggrieved party's treating physician; or
(ii) After receiving the service, must file with the Board a complaint within 120 days of each aggrieved party's initial denial notice.
Once an acceptable complaint has been filed, the aggrieved party may submit additional new evidence without withdrawing the complaint until the Board closes the record.
(a) The Board conducts a fair and impartial hearing, avoids unnecessary delay, maintains order, and ensures that all proceedings are recorded.
(b) The Board defers only to reasonable findings of fact, reasonable interpretations of law, and reasonable applications of fact to law by the Secretary.
(c) The Board has the authority to do any of the following:
(1) Review complaints by an aggrieved party (or aggrieved parties).
(2) Dismiss complaints that fail to comply with § 426.500.
(3) Set and change the date, time, and place of a hearing upon reasonable notice to the parties.
(4) Continue or recess a hearing for a reasonable period of time.
(5) Hold conferences to identify or simplify the issues, or to consider other matters that may aid in the expeditious disposition of the proceeding.
(6) Consult with scientific and clinical experts on its own motion, concerning clinical or scientific evidence.
(7) Set schedules for submission of exhibits and written reports of experts.
(8) Administer oaths and affirmations.
(9) Examine witnesses.
(10) Issue subpoenas requiring the attendance of witnesses at hearings as permitted by this part.
(11) Issue subpoenas requiring the production of existing documents before, and relating to, the hearing as permitted by this part.
(12) Rule on motions and other procedural matters.
(13) Stay the proceeding in accordance with § 426.340.
(14) Regulate the scope and timing of documentary discovery as permitted by this part.
(15) Regulate the course of a hearing and the conduct of representatives, parties, and witnesses.
(16) Receive, rule on, exclude, or limit evidence, as provided in this regulation.
(17) Take official notice of facts, upon motion of a party.
(18) Decide cases, upon the motion of a party, by summary judgment when there is no disputed issue of material fact.
(19) Conduct any conference, argument, or hearing in person or, upon agreement of the parties, by telephone, picture-tel, or any other means.
(20) Issue decisions.
(21) Exclude a party from an NCD review for failure to comply with a Board order or procedural request without good cause.
(22) Stay the proceedings for a reasonable time when all parties voluntarily agree to mediation or negotiation, and provide mediation services upon request.
(d) The Board does not have authority to do any of the following under this part:
(1) Conduct an LCD review or conduct LCD hearings, except as provided by § 426.465.
(2) Conduct an NCD review or conduct NCD hearings on its own motion or on the motion of a nonaggrieved party.
(3) Issue a decision based on any new evidence without following § 426.340, regarding procedures for review of new evidence.
(4) Review any decisions by CMS to develop a new or revised NCD.
(5) Conduct a review of any draft NCDs, coverage decision memoranda, or withdrawn NCDs.
(6) Conduct a review of the merits of an unacceptable NCD complaint as discussed in § 426.510.
(7) Conduct an NCD review of any policy that is not an NCD, as defined in § 400.202 of this chapter.
(8) Allow participation by individuals or entities other than—
(i) The aggrieved party and/or his or her representative;
(ii) CMS and/or the contractor;
(iii) Experts called by the parties or Board; or
(iv) Third parties with a clearly identifiable and substantial interest in the outcome of the dispute who have petitioned for and been granted permission by the Board to participate in the proceedings as
(9) Compel the parties to participate in a mediation process or to engage in settlement negotiations.
(10) Deny a request for withdrawal of a complaint by an aggrieved party.
(11) Compel CMS to conduct studies, surveys, or develop new information to support an NCD record.
(12) Deny CMS the right to reconsider, revise, or withdraw an NCD.
(13) Subject to the timely filing requirements, deny an aggrieved party, CMS, or its contractor the right to appeal an ALJ decision.
(14) Find invalid applicable Federal statutes, regulations, or rulings.
(15) Enter a decision specifying terms to be included in an NCD.
No party or person (except Board staff) communicates in any way with the Board on any substantive matter at issue in a case, unless on notice and opportunity for all parties to participate. This provision does not prohibit a person or party from inquiring about the status of a case or asking routine questions concerning administrative functions or procedures.
(a)
(1) Dockets the complaint.
(2) Determines whether the complaint is—
(i) The first challenge to a particular NCD; or
(ii) Related to a pending NCD review.
(3) Forwards the complaint to the Board member who conducts the review.
(b)
(1) The complaint is being submitted by an aggrieved party or, in the case of a joint complaint, that each individual named in the joint complaint is an aggrieved party. (In determining if a complaint is acceptable, the Board assumes that the facts alleged by the treating physician's documentation regarding the aggrieved party's (or parties') clinical condition are true.)
(2) The complaint meets the requirements for a valid complaint in § 426.500 and is not one of the documents in § 426.325(b).
(c)
(2) If the aggrieved party (or parties) fail(s) to submit an acceptable amended complaint within a reasonable timeframe as determined by the Board, the Board must issue a decision dismissing the unacceptable complaint.
(3) If a complaint is determined to be unacceptable after one amendment, the beneficiary is precluded from filing again for 6 months after being informed that it is unacceptable.
(d)
(1) Sends a letter to the aggrieved party (or parties) acknowledging the complaint and informing the aggrieved party (or parties) of the docket number and the deadline for CMS to produce the NCD record.
(2) Forwards a copy of the complaint, any evidence submitted in the complaint, and the letter described in paragraph (d)(1) of this section to CMS.
(3) Requires CMS to send a copy of the NCD record to the Board and all parties to the NCD review within 30 days of receiving the Board's letter, a copy of the complaint, and any associated evidence, subject to extension for good cause shown.
(e)
(i) The complaints are in regard to the same provision(s) of the same NCD, or there are other bases for consolidating the complaints.
(ii) The complaints contain common questions of law, common questions of fact, or both.
(iii) Consolidating the complaints does not unduly delay the Board's decision.
(2)
(i) Provides notification that the NCD review is consolidated and informs all parties of the docket number of the consolidated review.
(ii) Makes a single record of the proceeding.
(iii) Considers the relevant evidence introduced in each NCD complaint as introduced in the consolidated review.
(3)
(f)
(2) If an acceptable complaint challenges an NCD provision when review is pending and no decision has been issued ending the review, the Board may supplement the public notice on its Web site and extend the time for participation requests if indicated.
(3) The Board may allow participation, in the manner and by the deadlines established by the Board, when an NCD is being challenged and the Board decides that—
(i) The
(ii) Participation would clarify the issues or otherwise be helpful in resolution of the dispute;
(iii) Participation does not result in substantial delay; and
(iv) The petition for participation meets the criteria in § 426.513.
(a)
(1) The petitioner's interest in the hearing;
(2) Who will represent the petitioner; and
(3) The issues on which the petitioner intends to present argument.
(b)
(1) Submitting a written statement of position to the Board before the beginning of the hearing;
(2) Presenting a brief oral statement or other evidence at the hearing, at the point in the proceedings specified by the Board; and
(3) Submitting a brief or a written statement when the parties submit briefs.
(c)
CMS will provide a copy of the NCD record (as described in § 426.518) to the
Medicare MCOs and Medicaid State agencies may participate in the NCD review process only if they meet the
(a) CMS may review any new evidence that is submitted, regardless of whether the Board has stayed the proceedings, including but not limited to new evidence:
(1) Submitted with the initial complaint;
(2) Submitted with an amended complaint;
(3) Produced during discovery;
(4) Produced when the Board consults with scientific and clinical experts; and
(5) Presented during any hearing.
(b) CMS may submit a statement regarding whether the new evidence is significant under § 426.340, by a deadline set by the Board.
(a)
(1) The NCD being challenged.
(2) Any medical evidence considered on or before the date the NCD was issued, including, but not limited to, the following:
(i) Scientific articles.
(ii) Technology assessments.
(iii) Clinical guidelines.
(iv) Statements from clinical experts, medical textbooks, claims data, or other indication of medical standard of practice.
(v) MCAC transcripts.
(3) Public comments received during the notice and comment period.
(4) Coverage decision memoranda.
(5) An index of documents considered that are excluded under paragraph (b) of this section.
(b)
(1) Proprietary data or privileged information.
(2) Any new evidence.
The NCD record furnished to the Board includes—
(a) Documents included in § 426.518(a); and
(b) Privileged information and proprietary data considered that must be filed with the Board under seal.
(a) CMS may withdraw an NCD or NCD provision under review before the date the Board issues a decision regarding that NCD. Withdrawing an NCD or NCD provision under review has the same effect as a decision under § 426.560(b).
(b) CMS may revise an NCD under review to remove or amend the NCD provision listed in the complaint through the reconsideration process before the date the Board issues a decision regarding that NCD. Revising an NCD under review to remove the NCD provision in question has the same effect as a decision under § 426.560(b).
(c) CMS must notify the Board within 48 hours of—
(1) Withdrawing an NCD or NCD provision that is under review; or
(2) Issuing a revised or reconsidered version of the NCD that is under review.
(d) If CMS issues a revised or reconsidered NCD, CMS forwards a copy of the revised/reconsidered NCD to the Board.
(e) The Board must take the following actions upon receiving a notice that CMS has withdrawn or revised/reconsidered an NCD under review:
(1) If, before the Board issues a decision, the Board receives notice that CMS has withdrawn the NCD or revised
(2) If, before the Board issues a decision, the Board receives notice that CMS has revised the NCD provision in question but has not removed it altogether, the Board must continue the review based on the revised NCD. In this case, CMS must send a copy of the supplemental record to the Board and all parties. In that circumstance, the Board permits the aggrieved party to respond to the revised NCD and the supplemental record.
(a)
(b)
(c)
(2)
(3)
(a)
(b)
(c)
(2) Issuance of a decision finding the record complete and adequate to support the validity of the NCD ends the review process.
(3) If the Board determines that the NCD record is not complete and adequate to support the validity of the
(d) The process described in paragraphs (a), (b), and (c) of this section applies when an NCD record has been supplemented, except that discovery and the taking of evidence is not repeated. The period for the aggrieved party to file a statement begins when the aggrieved party receives the supplement.
(a)
(1) Confine the NCD review to the provision(s) of the NCD raised in the aggrieved party's complaint.
(2) Conduct a hearing unless the matter can be decided on the written record.
(3) Close the NCD review record to the taking of evidence.
(4) Treat as precedential any previous Board decision made under § 426.547 that involves the same NCD provision(s), same specific issue and facts in question, and the same clinical conditions.
(5) Issue a decision as described in § 426.547.
(b)
(c)
(a)
(b)
(2)
(i) Is irrelevant or unduly repetitive;
(ii) Is unduly costly or burdensome; or
(iii) Will unduly delay the proceeding.
(c)
(d)
(e)
(f)
(g)
(a)
(b)
(1) Designate the witnesses.
(2) Specify any evidence to be produced.
(3) Describe the address and location with sufficient particularity to permit the witnesses to be found.
(4) State the pertinent facts that the party expects to establish by witnesses or documents and state whether those facts could be established by evidence other than by the use of a subpoena.
(c)
(d)
(e)
(1) Be issued in the name of the presiding Board member.
(2) Include the docket number and title of the NCD under review.
(3) Provide notice that the subpoena is issued according to sections 1872 and 205(d) and (e) of the Act.
(4) Specify the time and place at which the witness is to appear and any evidence the witness is to produce.
(f)
(g)
(h)
(a) Except as provided in this part, the Board is not bound by the Federal Rules of Evidence. However, the Board may apply the Federal Rules of Evidence when appropriate, for example, to exclude unreliable evidence.
(b) The Board must exclude evidence that it determines is clearly irrelevant or immaterial, or unduly repetitive.
(c) The Board may accept privileged information or proprietary data, but must maintain it under seal.
(d) The Board may permit the parties to introduce the testimony of expert witnesses on scientific and clinical issues, rebuttal witnesses, and other relevant evidence. The Board may require that the testimony of expert witnesses be submitted in the form of a written report, accompanied by the curriculum vitae of the expert preparing the report.
(e) Experts submitting reports must be available for cross-examination at an evidentiary hearing upon request of the Board or a party to the proceeding, or the report will be excluded from the record.
(f) Except as set forth in paragraph (c) of this section or unless otherwise ordered by the Board for good cause shown, all documents and other evidence offered or taken for the record is open to examination by all parties.
(a) The Board may, at the request of any party, or on its own motion, dismiss a complaint if the aggrieved party fails to do either of the following:
(1) Attend or participate in a prehearing conference (the prehearing may be conducted by telephone) or hearing without good cause shown.
(2) Comply with a lawful order of the Board without cause shown.
(b) The Board must dismiss any complaint concerning NCD provision(s) if the following conditions exist:
(1) The Board does not have the authority to rule on that provision under § 426.505(d).
(2) The complaint is not timely. (See § 426.500(b)).
(3) The complaint is not filed by an aggrieved party.
(4) The complaint is filed by an individual who fails to provide an adequate statement of need for the service from the treating physician.
(5) The complaint challenges a provision or provisions of an LCD except as provided in § 426.476, regarding the
(6) CMS notifies the Board that the NCD provision(s) is (are) no longer in effect.
(7) The aggrieved party withdraws the complaint. (See § 426.523, for requirements for withdrawing a complaint regarding an NCD under review.)
(a) A witness testifying at a hearing before the Board receives the same fees and mileage as witnesses in Federal district courts of the United States. If the witness qualifies as an expert, he or she is entitled to an expert witness fee. Witness fees are paid by the party seeking to present the witness.
(b) If the Board requests expert testimony, the Board is responsible for paying all applicable fees and mileage, unless the expert waives payment.
The Board must ensure that all hearings are open to the public and are electronically, mechanically, or stenographically reported. Except for privileged information and proprietary data that are filed under seal, all evidence upon which the Board relies for decision must be admitted into the public record. All medical reports, exhibits, and any other pertinent document, either in whole or in material part, must be offered, marked for identification, and retained in the case record.
The Board must do the following:
(a) Issue to all parties to the NCD review, within 90 days of closing the NCD review record to the taking of evidence, one of the following:
(1) A written decision, including a description of appeal rights.
(2) A written notification stating that a decision is pending, and an approximate date of issuance for the decision.
(b) Make the decision available at the HHS Medicare Internet site. The posted decision does not include any information that identifies any individual, provider of service, or supplier.
(a)
(1) A determination that the provision of the NCD is valid under the reasonableness standard.
(2) A determination that the provision of the NCD is not valid under the reasonableness standard.
(3) A statement dismissing the complaint regarding the NCD, and a rationale for the dismissal.
(4) A determination that the LCD or NCD record is complete and adequate to support the validity of the LCD or NCD provisions under the reasonableness standard.
(b)
(1) The date of issuance.
(2) The docket number of the NCD review.
(3) A statement as to whether the aggrieved party has filed a claim for the service(s) named in the complaint, the date(s)-of-service, and the disposition, if known.
(4) A basis for concluding that the NCD was or was not valid based on the application of the reasonableness standard to the record before the Board, including CMS':
(i) Findings of fact.
(ii) Interpretations of law.
(iii) Applications of fact to law.
(5) A summary of the evidence reviewed. Where proprietary or privileged data were submitted under seal, the decision must state whether the data were material and what role they played in the determination, but without disclosing the substance or contents of the evidence under seal. A separate statement of the rationale for the Board's treatment of the sealed evidence must be prepared and kept under seal itself. If the Board decision is appealed to the court, this statement must be provided to the court, under seal.
(6) A statement regarding the right to judicial review.
The Board's decision may not do any of the following:
(a) Order CMS to add any language to a provision or provisions of an NCD.
(b) Order CMS or its contractors to pay a specific claim.
(c) Set a time limit for CMS to establish a new or revised NCD.
(d) Review or evaluate an NCD other than the NCD under review.
(e) Include a requirement for CMS or its contractors that specifies payment, coding, or systems changes for an NCD, or deadlines for implementing these types of changes.
(f) Order or address how CMS implements an NCD.
When appropriate, the Board may limit a decision holding invalid a specific provision(s) of an NCD to specific clinical indications and for similar conditions.
(a)
(b)
(1)
(ii) If a revised NCD is issued, contractors, M+C organizations, and other Medicare managed care organizations must use the revised NCD in reviewing claim/appeal submissions or request for services delivered or services performed on or after the effective date of the revised NCD.
(iii) If the aggrieved party who sought review has not yet submitted a claim, the contractor must adjudicate the claim without using the provision(s) of the NCD that the Board found invalid.
(iv) In either case, the claim and any subsequent claims for the service provided under the same circumstances, must be adjudicated without using the NCD provision(s) found invalid.
(2)
After the Board has made a decision regarding an NCD complaint, the Board sends a written notice of the decision to each party. The notice must—
(a) State the outcome of the review; and
(b) Inform each party to the determination of his or her rights to seek further review if he or she is dissatisfied with the determination, and the time limit under which an appeal must be requested.
CMS may not reinstate an NCD provision(s) found to be unreasonable unless CMS has a different basis (such as additional evidence) than what the Board evaluated.
Upon a request from a Federal Court, the Board must provide to the Federal Court a copy of the Board's LCD or NCD review record (as described in § 426.587).
A decision by the Board constitutes a final agency action and is subject to judicial review. CMS may not appeal a Board decision.
(a)
(1) The NCD complaint.
(2) The NCD and NCD record.
(3) The supplemental NCD record, if applicable.
(4) Transcripts of record.
(5) Any other evidence relevant gathered under § 426.540.
(6) The Board's decision.
(b)
A list of CFR titles, subtitles, chapters, subchapters and parts and an alphabetical list of agencies publishing in the CFR are included in the CFR Index and Finding Aids volume to the Code of Federal Regulations which is published separately and revised annually.
Table of CFR Titles and Chapters
Alphabetical List of Agencies Appearing in the CFR
Table of OMB Control Numbers
List of CFR Sections Affected
The OMB control numbers for chapter IV of title 42 appear in § 400.310. Sections 400.300 and 400.310 are reprinted below for the convenience of the user.
This subpart collects and displays control numbers assigned by the Office of Management and Budget (OMB) to collections of information contained in CMS regulations, in accordance with OMB's regulations for controlling paperwork burdens on the public, 5 CFR part 1320. CMS intends that the subpart comply with the requirements of section 3507(f) of the Paperwork Reduction Act of 1980, 44 U.S.C. chapter 35 which requires that agencies shall not engage in a “collection of information” without obtaining a control number from OMB.
All changes in this volume of the Code of Federal Regulations that were made by documents published in the
For the period before January 1, 2001, see the “List of CFR Sections Affected, 1949-1963, 1964-1972, 1973-1985 and 1986-2000” published in 11 separate volumes.