PRINTER FRIENDLY
 

On Monday, January 12, 2009, the Centers for Medicare & Medicaid Services (CMS) published a final rule with comment period addressing issues in the Medicare Advantage (Part C) and Prescription Drug Benefit (Part D) Programs. 74 FR 1494  Matters addressed in the rule include definitions relating to Special Needs Plans, certain requirements for Medical Savings Accounts, cost-sharing for dual eligible enrollees in Medicare Advantage plans, the definition of negotiated prices, passive enrollment into Part C and Part D plans and other enrollment and appeals process issues.

The final rule finalizes those portions of the rule proposed on May 16, 2008, 73 FR 28556, that were not addressed in other final rules published on September 18, 2008, 73 FR 54208 and 73 FR 54226.  It appears from the Federal Register notice that CMS will accept comments on only two portions of the rule: provisions relating to the statutory definitions of Special Needs Plans and those relating to negotiated prices and retained rebates under the Retiree Drug Subsidy program.  Comments must be received by March 13, 2009.

On January 20, 2009, President Barack Obama's Chief of Staff directed agency heads to review all pending or recently finalized rules and, in the case of final rules already published in the Federal Register, to consider extending their effective date 60 days, pending review by new administration appointees, and, if the effective date is extended, to include a 30 day comment period. http://media.washingtonpost.com/wp-srv/politics/documents/emanuel-regulatory-review.pdf). Presumably, if these rules are treated under the President's directive, CMS will so inform the public in the Federal Register.  Otherwise, the rules are effective March 13, 2009, though the practical effective date will be the 2010 plan year for many provisions.

This Alert will discuss some provisions of the final rule that directly affect beneficiaries. 

1. Provisions Affecting Parts C and D

Passive Enrollment (42 C.F.R. § 422.60 Part C; § 423.32 Part D)

When a Part C or Part D plan is terminated or chooses to end coverage, CMS will passively enroll the plan's enrollees into another Part C or Part D plan.  The new plan must provide a CMS-approved notice to the affected beneficiaries informing them of the plan's costs and benefits and how to access them, and of the beneficiary's right to decline the plan or enroll in another plan.  Beneficiaries who are passively enrolled will have a three month special enrollment period.  CMS declined to accept the comment that it lacked authority to passively enroll beneficiaries and that those in Part C plans should default to traditional Medicare. Nor did CMS adopt the proposal of commenters that, for individuals losing their Part D plans, CMS should rely on available prescription drug data to make "intelligent" assignments to new Part D plans.

Disenrollment for failure to pay premium (§ 422.74 Part C; § 423.44 Part D)

Neither MA plans nor PDPs may disenroll a beneficiary for failure to pay a premium if that enrollee is having premiums withheld from a monthly cash benefit check, but may do so if the enrollee is in "direct pay" status, i.e., pays the premium directly to the plan.  CMS did not address commenters' concerns that CMS and the Social Security Administration claim the right to put beneficiaries into "direct pay" status when they are unable to effectuate the premium withhold option, a circumstance that has existed with troubling consequences since Part D began in 2006.

Payment of Beneficiary Premiums (§ 422.262 Part C; § 423.293 Part D)

MA plans and PDPs are prohibited from billing enrollees whose premiums are being withheld from a benefit check.  If an enrollee in "direct bill" status is in arrears on premiums but is without fault (not defined in the regulations), the plan must offer the enrollee the option to repay the premiums over the same span of time for which they are owed, i.e., over seven months if seven months of premiums are owed.  The rule contains no limit on the number of months for which a plan can demand arrearages, nor is there a hardship waiver of repayment, as requested by some commenters.

Notice of Non-Renewal of Contract (§ 422.506 Part C; § 423.507 Part D)

The required notice to plan enrollees and the general public from a plan not renewing its contract with CMS must be made 60 days prior to the effective date of non-renewal.  This is a reduction from current requirements of 90 days.  Despite concerns raised by commenters that the new time frame is too short for affected beneficiaries to make informed decisions about their options, CMS justified its decision by asserting that the reduced time period allows for the non-renewal process and administrative appeals, if any, to conclude.

Right to Reconsideration (Part C)/Redetermination (Part D) (§ 422.578 Part C; § 423.580 Part D)

The right to request a standard first level review of a plan decision is now available to an enrollee's physician, after providing notice to the enrollee, without the physician having an appointment of representative form filed with the plan.  The physician's right to seek review is for pre-service requests for coverage in an MA plan.  A physician taking appeals beyond the plan level must have an appointment of representative form from the beneficiary. 

Request for a Standard Reconsideration (Part C)/Redetermination (Part D) (§ 422.582 Part C; § 423.582 Part D)

Plans may adopt policies to accept oral requests for reconsiderations/redeterminations, but ultimately, requests must be in writing.  The request must be made within 60 days of the date on the notice (not the date the notice was received, as requested by some commenters) unless the requester shows good cause for late requests.  CMS has not defined "good cause."  Though both were requested by commenters, CMS did not adopt either uniform processes for reconsideration/redetermination or a process for monitoring plan compliance with timeframes for processing reconsiderations/redeterminations.

Determinations Regarding the Amount of Civil Money Penalties and Assessment Imposed by CMS (§ 422.760 Part C; § 423.760 Part D)

CMS may impose a civil money penalty of up to $25,000 for each MA or PDP enrollee directly adversely affected or with the substantial likelihood of being adversely affected by a plan's actions.  The rule includes no cap on the penalty, but CMS states in the preamble that it will issue guidance with a range of penalties or caps if necessary.

2. Provisions Affecting Part C only

Special Needs Plans (SNPs) – Exclusive Enrollment (§ 422.2)

 In conformance with the provisions of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), Medicare Advantage Special Needs Plans must limit their entire enrollment to individuals meeting the definition of Special Needs Individual for which the plan is designed.  This is a change from the proposed rule, published before the passage of MIPPA, which required 90% enrollment of the designated special needs individuals.

Special Needs Plans – Types of MA Plans (§ 422.4)

Special Needs Plans for Institutionalized Individuals may enroll those who meet an "institutionalized equivalent."  This term is defined as a person living in the community but requiring an institutional level of care as determined using a state assessment tool  from the state in which the individual resides or the same methodology that the state uses to determine institutional level of care for Medicaid nursing home eligibility.  The assessment must be conducted by "an impartial entity and (sic) having the requisite knowledge and experience to accurately identify whether the beneficiary meets the institutional LOC [level of care] criteria."

To be eligible for a SNP for individuals with chronic and disabling conditions, a person must have "one or more co-morbid and medically complex chronic conditions that are substantially disabling or life-threatening, [have] a high risk of hospitalization or other significant adverse health outcomes, and [require] specialized delivery systems across domains of care."

Special Needs Plans – Eligibility to Elect an MA Plan for Special Needs Individuals (§ 422.52)

SNPs must verify that potential enrollees meet the special needs definition pertinent to the plan, using a process approved by CMS.  The rule itself contains no additional detail, though some is included in manual guidance.  In October 2008, CMS issued a letter to plans indicating that it would consider alternate approaches to eligibility verification; the preamble to this rule affirms the content of that letter.

Special Needs Plans – Requirements Relating to Basic Benefits (§ 422.101)

CMS included some requirements for Models of Care required of SNPs in its September 18 rule and has included additional requirements in this rule, though the requirements remain less detailed than those requested by commenters.  This rule requires that SNPs (1) target one of the three special needs populations, (2) have staff trained in the care model, (3) coordinate care across health care settings, providers and services to assure continuity of care, (4) coordinate care to meet the needs of the most vulnerable among their special needs population and (5) coordinate communication among plan personnel, providers and beneficiaries.

Contract Provisions Relating to Cost Sharing for Dual Eligibles (§ 422.504)

The rule requires plans to inform plan providers of Medicare and Medicaid benefits and of rules relating to cost-sharing for dual eligibles.  The plans may not impose cost-sharing that exceeds what the beneficiary would be required to pay if the individual were not enrolled in a plan.  Contracts with providers must state that providers will accept the plan payment as payment in full or bill the appropriate State source.  This rule is broader than the language of MIPPA, which applied only to Medicare Advantage Special Needs Plans for Dual Eligibles.  The MIPPA language was, in fact, more restrictive than pre-existing law.

3. Provisions Affecting Part D Only

Enrollment of Full-Benefit Dual Eligible Individuals with Qualifying Employer Coverage (§ 423.34)

The rule provides that full benefit dual eligibles who have employer coverage for which a Part D subsidy is being paid will be presumed to have declined their Part D auto enrollment if they do nothing in response to a notice from CMS informing them of their option to receive Part D.  The rule directs beneficiaries to "discuss the potential impact of Medicare Part D coverage on their group health plan coverage" but does not tell them with whom to discuss this, as requested by commenters.

Definition of "Other Prescriber" (§ 423.560)

The rule adds a category of individuals who can participate in various aspects of coverage determination and appeals processes:  the "other prescriber."  This term means a health care professional other than a physician who is authorized under State law or other applicable law to write prescriptions."

Relevant sections of this portion of the regulations are amended to include the new term among those who can request action by the plan.

What is presented here is a cursory review of some provisions of the January 12 rule.  Future Alerts will address additional provisions and will inform readers whether CMS has acted in response to President Obama's directive to review recent agency rules.

Special thanks to Michealle Carpenter of the Medicare Rights Center whose excellent summary of the Final Rule was invaluable in the preparation of this Alert.