[Federal Register: January 28, 2005 (Volume 70, Number 18)]
[Rules and Regulations]
[Page 4193-4585]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28ja05-21]
[[Page 4193]]
-----------------------------------------------------------------------
Part II
Department of Health and Human Services
-----------------------------------------------------------------------
Centers for Medicare & Medicaid Services
-----------------------------------------------------------------------
42 CFR Parts 400, 403, 411, 417, and 423
Medicare Program; Medicare Prescription Drug Benefit; Final Rule
[[Page 4194]]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 400, 403, 411, 417, and 423
[CMS-4068-F]
RIN 0938-AN08
Medicare Program; Medicare Prescription Drug Benefit
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule implements the provisions of the Social
Security Act (the Act) establishing and regulating the Medicare
Prescription Drug Benefit. The new voluntary prescription drug benefit
program was enacted into law on December 8, 2003 in section 101 of
Title I of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA) (Pub. L. 108-173). Although this final
rule specifies most of the requirements for implementing the new
prescription drug program, readers should note that we are also issuing
a closely related rule that concerns Medicare Advantage organizations,
which, if they offer coordinated care plans, must offer at least one
plan that combines medical coverage under Parts A and B with
prescription drug coverage. Readers should also note that separate CMS
guidance on many operational details appears or will soon appear on the
CMS website, such as materials on formulary review criteria, risk plan
and fallback plan solicitations, bid instructions, solvency standards
and pricing tools, plan benefit packages.
The addition of a prescription drug benefit to Medicare represents
a landmark change to the Medicare program that will significantly
improve the health care coverage available to millions of Medicare
beneficiaries. The MMA specifies that the prescription drug benefit
program will become available to beneficiaries beginning on January 1,
2006.
Generally, coverage for the prescription drug benefit will be
provided under private prescription drug plans (PDPs), which will offer
only prescription drug coverage, or through Medicare Advantage
prescription drug plans (MA PDs), which will offer prescription drug
coverage that is integrated with the health care coverage they provide
to Medicare beneficiaries under Part C of Medicare. PDPs must offer a
basic prescription drug benefit. MA-PDs must offer either a basic
benefit or broader coverage for no additional cost. If this required
level of coverage is offered, MA-PDs or PDPs, but not fallback PDPs may
also offer supplemental benefits through enhanced alternative coverage
for an additional premium. All organizations offering drug plans will
have flexibility in the design of the prescription drug benefit.
Consistent with the MMA, this final rule also provides for subsidy
payments to sponsors of qualified retiree prescription drug plans to
encourage retention of employer-sponsored benefits.
We are implementing the drug benefit in a way that permits and
encourages a range of options for Medicare beneficiaries to augment the
standard Medicare coverage. These options include facilitating
additional coverage through employer plans, MA-PD plans and high-option
PDPs, and through charity organizations and State pharmaceutical
assistance programs. See sections II.C, II.J, and II.P, and II.R of
this preamble for further details on these issues.
The proposed rule identified options and alternatives to the
provisions we proposed and we strongly encouraged comments and ideas on
our approach and on alternatives to help us design the Medicare
Prescription Drug Benefit Program to operate as effectively and
efficiently as possible in meeting the needs of Medicare beneficiaries.
DATES: These regulations are effective on March 22, 2005.
FOR FURTHER INFORMATION CONTACT: Lynn Orlosky (410) 786-9064 or Randy
Brauer (410)786-1618 (for issues related to eligibility, elections,
enrollment, including auto-enrollment of dual eligible beneficiaries,
and creditable coverage).
Melvin Sanders (410) 786-8355 (for issues related to marketing and
user fees).
Vanessa Duran (214) 767-6435 (for issues related to benefits and
beneficiary protections, including Part D benefit packages, Part D
covered drugs, coordination of benefits in claims processing and
tracking of true-out-of-pocket costs, pharmacy network access
standards, plan information dissemination requirements, and privacy of
records).
Craig Miner, RPh. (410) 786-1889 for issues of pharmacy benefit
cost and utilization management, formulary development, quality
assurance, medication therapy management, and electronic prescribing).
Mark Newsom (410) 786-3198 (for issues of submission, review,
negotiation, and approval of risk and limited risk bids for PDPs and
MA-PD plans; the calculation of the national average bid amount;
determination and collection of enrollee premiums; calculation and
payment of direct and reinsurance subsidies and risk-sharing; and
retroactive adjustments and reconciliations.)
Jim Owens (410) 786-1582 (for issues of licensing and waiver of
licensure, the assumption of financial risk for unsubsidized coverage,
and solvency requirements for unlicensed sponsors or sponsors who are
not licensed in all States in the region in which it wants to offer a
PDP.)
Jim Slade (410) 786-1073 (for issues related to pre-emption of
State law) and (for issues related to solicitation, review and approval
of fallback prescription drug plan proposals; fallback contract
requirements; and enrollee premiums and plan payments specific to
fallback plans.)
Christine Hinds (410) 786-4578 (for issues of coordination of Part
D plans with providers of other prescription drug coverage including
Medicare Advantage plans, State pharmaceutical assistance programs
(SPAPs), Medicaid, and other retiree prescription drug plans; also for
issues related to eligibility for and payment of subsidies for
assistance with premium and cost-sharing amounts for Part D eligible
individuals with lower income and resources; for rules for States on
eligibility determinations for low-income subsidies and general State
payment provisions including the phased-down State contribution to drug
benefit costs assumed by Medicare).
Mark Smith (410) 786-8015 (for issues related to conditions
necessary to contract with Medicare as a PDP sponsor, as well as
contract requirements, intermediate sanctions, termination procedures
and change of ownership requirements.)
Jean LeMasurier (410) 786-1091 (for issues related to employer
group waivers and options).
Frank Szeflinski (303) 844-7119 (for issues related to cost-based
HMOs and CMPS offering Part D coverage.)
John Scott (410) 786-3636 (for issues related to the procedures PDP
sponsors must follow with regard to grievances, coverage
determinations, and appeals.)
Mark Smith (410) 786-8015 (for issues related to solicitation,
review and approval of fallback prescription drug plan proposals;
fallback contract requirements; and enrollee premiums and plan payments
specific to fallback plans.)
Jim Mayhew (410) 786-9244 (for issues related to the alternative
retiree
[[Page 4195]]
drug subsidy and other employer-based sponsor options.)
Joanne Sinsheimer (410) 786-4620 (for issues related to physician
self-referral prohibitions.)
Brenda Hudson (410) 786-4085 (for issues related to PACE
organizations offering Part D coverage.)
Julie Walton (410) 786-4622 or Kathryn McCann (410) 786-7623 (for
issues related to provisions on Medicare supplemental (Medigap)
policies.)
SUPPLEMENTARY INFORMATION: Copies: To order copies of the Federal
Register containing this document, send your request to: New Orders,
Superintendent of Documents, P.O. Box 371954, Pittsburgh, PA 15250-
7954. Specify the date of the issue requested and enclose a check or
money order payable to the Superintendent of Documents, or enclose your
Visa or Master Card number and expiration date. Credit card orders can
also be placed by calling the order desk at (202) 512-1800 (or toll-
free at 1-888-293-6498) or by faxing to (202) 512-2250. The cost for
each copy is $10. As an alternative, you can view and photocopy the
Federal Register document at most libraries designated as Federal
Depository Libraries and at many other public and academic libraries
throughout the country that receive the Federal Register.
This Federal Register document is also available from the Federal
Register online database through GPO Access, a service of the U.S.
Government Printing Office. The web site address is: http://www.access.gpo.gov/fr/index.html
.
Table of Contents
I. Background
A. Medicare Prescription Drug, Improvement, and Modernization Act
of 2003
B. Codification of Regulations
C. Organizational Overview of Part 423
II. Discussion of the Provisions of the Final Rule
A. General Provisions
1. Overview
2. Discussion of Important Concepts and Key Definitions
B. Eligibility and Enrollment
1. Eligibility and Enrollment
2. Enrollment Process
3. Enrollment of Full Benefit Dual Eligible Individuals
4. Disenrollment process
5. Enrollment Periods
6. Effective Dates
7. Involuntary Disenrollment by the PDP
8. Late Enrollment Penalty
9. Information about Part D
10. Approval of Marketing Materials and Enrollment Forms
11. Information Provided to PDP sponsors and MA Organizations
12. Procedures to Determine and Document Creditable Status of
Prescription Drug Coverage
C. Voluntary Prescription Benefits and Beneficiary Protections
1. Overview and Definitions
2. Plan Formularies
3. Establishment of Prescription Drug Plan Service Areas
4. Access to Covered Part D Drugs
5. Special Rules for Out-of-Network Access to Covered Part D Drugs
at Pharmacies
6. Dissemination of Plan Information
7. Public Disclosure of Pharmaceutical Prices for Equivalent Drugs
8. Privacy, Confidentiality, and Accuracy of Enrollee Records
D. Cost Control and Quality Improvement Requirements for Part D
Plans
1. Overview (Scope)
2. Drug Utilization Management, Quality Assurance, and Medication
Therapy Management Programs (MTMPs)
3. Consumer Satisfaction Surveys
4. Electronic Prescription Program
5. Quality Improvement Organizations (QIO) Activities
6. Treatment of Accreditation
E. RESERVED
F. Submission of Bids and Monthly Beneficiary Premiums: Plan
Approval
1. Overview
2. Requirements for Submission of Bids and Related Information
3. General CMS Guidelines for Actuarial Valuation of Prescription
Drug Coverage
4. Determining Actuarial Equivalency for Variants of Standard
Coverage and for Alternative Coverage.
5. Test for Assuring the Same Protection against High Out-of-Pocket
Costs
6. Review and Negotiation of Bid and Approval of Plans
7. National Average Monthly Bid Amount
8. Rules Regarding Premiums
9. Collection of Monthly Beneficiary Premiums
G. Payments to Part D Plan Sponsors for Qualified Prescription Drug
Coverage
1. Overview
2. Definitions
3. General Payment Provisions
4. Requirement for Disclosure of Information
5. Determination of Payment
6. Low-Income Cost-Sharing Subsidy Interim Payments
7. Risk Sharing Arrangements
8. Retroactive Adjustments and Reconciliation
9. Reopening
10. Payment Appeals
H. RESERVED
I. Organization Compliance with State Law and Preemption by Federal
Law.
1. Overview
2. Waiver of Certain Requirements in Order to Expand Choice
3. Temporary Waiver for Entities Seeking to Offer a Prescription
Drug Plan in more than One State in a Region
4. Solvency Standards for Non-Licensed Entities
5. Preemption of State Laws and Prohibition of Premium Taxes
J. Coordination Under Part D Plans with Other Prescription Drug
Coverage
1. Overview and Terminology
2. Application of Part D Rules to Certain Part D Plans on and after
January 1, 2006
3. Application to PACE Plans
4. Application to Employer Groups
5. Medicare Secondary Payer Procedures
6. Coordination of Benefits with Other Providers of Prescription
Drug Coverage.
K. Application Procedures and Contracts with PDP Sponsors
1. Overview
2. Definitions
3. Application Requirements
4. Evaluation and Determination Procedures for Applications to Be
Determined Qualified to Act as a Sponsor
5. General Provisions
6. Contract Provisions
7. Effective Date and Term of Contract
8. Nonrenewal of Contract
9. Modification or termination of contract by mutual consent
10. Termination of Contracts by CMS
11. Termination of Contract by the Part D Plan Sponsor
12. Minimum Enrollment Requirements
13. Reporting Requirements
14. Prohibition of Midyear Implementation of Significant New
Regulatory Requirements
15. Fraud, Waste and Abuse
L. Effect of Change of Ownership or Leasing of Facilities during
the Term of Contract
1. General Provisions
2. Change of Ownership
3. Novation Agreement Requirements
M. Grievances, Coverage Determinations, and Appeals
1. Introduction
2. General Provisions
3. Grievance Procedures
[[Page 4196]]
4. Coverage Determinations
5. Formulary Exceptions Procedures
6. Appeals
7. Effectuation of Reconsideration Determinations
8. Federal Preemption of Grievances and Appeals
9. Employer Sponsored Prescription Drug Programs and Appeals
10. Miscellaneous
N. Medicare Contract Determinations and Appeals
1. Overview
2. Provisions of the Final Rule
O. Intermediate Sanctions
1. Kinds of Sanctions
2. Basis for Imposing Sanctions
3. Procedures for Imposing Sanctions
P. Premiums and Cost-Sharing Subsidies for Low-Income Individuals
1. Definitions
2. Eligibility for the Low-Income Subsidy
3. Eligibility Determinations, Redeterminations and Applications
4. Premium Subsidy and Cost-Sharing Subsidy
5. Administration of Subsidy Program
Q. Guaranteeing Access to a Choice of Coverage (Fallback
Prescription Drug Plans)
1. Overview
2. Terminology
3. Assuring Access to a Choice of Coverage
4. Submission and Approval of Bids
5. Rules Regarding Premiums
6. Contract Terms and Conditions
7. Payment to Fallback Plans
R. Payments to Sponsors of Retiree Prescription Drug Plans
1. Introduction
2. Options for Sponsors of Retiree Prescription Drug Programs
3. Definitions
4. Requirements for qualified retiree prescription drug plans
5. Retiree drug subsidy amounts
6. Appeals
7. Change of Ownership
8. Construction
S. Special Rules for States-Eligibility Determinations for Low-
Income Subsidies, and General Payment Provisions
1. Eligibility Determinations
2. General Payment Provisions
3. Treatment of Territories
4. State Contribution to Drug Benefit Costs Assumed by Medicare
T. Part D Provisions Affecting Physician Self-Referral, Cost-Based
HMO, PACE, and Medigap Requirements
1. Definition of Outpatient Prescription Drugs for Purposes of
Physician Self-Referral Prohibition
2. Cost-Based HMOs and CMPS offering Part D coverage
3. PACE Organizations Offering Part D Coverage
4. Medicare Supplemental Policies
III. Provisions of the Final Rule
IV. Collection of Information Requirements
V. Regulatory Impact Analysis
In addition, because of the many organizations and terms to which
we refer by acronym in this final rule, we are listing these acronyms
and their corresponding terms in alphabetical order below:
ABN Advanced beneficiary notice
ADAP AIDS Drug Assistance Program
AEP Annual coordinated election period
AHRQ Agency for Healthcare Research and
Quality
AI/AN American Indians and Alaska Natives
AIC Amount in controversy
ALJ Administrative Law Judge
AMA American Medical Association
AMCP Academy of Managed Care Pharmacy
ANCI American National Standards Institute
AO Accreditation organization
ASAP American Society of Automation in
Pharmacy
ASHP American Society of Health Systems
Pharmacists
AWP Average wholesale price
BBA Balanced Budget Act
BLS Bureau of Labor Statistics
CAHP Consumer Assessment of Health Plan
CBI Confidential business information
CBO Congressional Budget Office
CCIP Chronic care improvement programs
CCP Comprehensive Compliance Program
CFR Code of Federal Regulations
CHOW Change of ownership
CMP competitive medical plan
CMS Centers for Medicare & Medicaid
Services
COB Coordination of benefit
COBRA Consolidated Omnibus Budget
Reconciliation Act (of 1985)
CPI-PD Consumer Price Index for Prescription
Drugs and Medical Supplies
CPT Current Procedural Terminology
CY Calendar year
DAB Departmental Appeals Board
DHS Designated health services
DME Durable medical equipment
DoD Department of Defense
DOL Department of Labor
DUR Drug utilization review
EOB explanation of benefits
ERISA Employee Retirement Income Security
Act of 1974
ESRD End stage renal disease
FAR Federal Acquisition Regulation
FDA Food and Drug Administration
FEHBP Federal Employee Health Benefits
Program
FFP Federal financial participation
FOIA Freedom of Information Act
FQHCs Federally qualified health centers
FPL Federal poverty level
FR Federal Register
FSA Flexible savings account
FY Fiscal year
HEDIS Health plan Employer Data and
Information Set
HHS Department of Health and Human
Services
HIC Health insurance claim
HIPAA Health Insurance Portability and
Accountability Act of 1996
HMO Health maintenance organization
HPMS Health Plan Management System
HRA Health reimbursement account
HRSA Health Resources and Services
Administration
HSA Health savings account
ICFs/MR Intermediate care facilities for the
mentally retarded
IDIQ Indefinite duration, indefinite
quantity
IEP Initial enrollment period
IHS Indian Health Service
IRE Independent review entity
I/T/U Indian Tribes and Tribal
organizations, and urban Indian
organizations
JCHACO Joint Commission on Accreditation of
Health Care Organizations
LIS Low-income subsidy
LTC Long term care
MA Medicare Advantage (formerly
Medicare+Choice)
MA-PD Medicare Advantage prescription drug
plans
MAC Medicare Appeals Council
MAX Medicaid Analytic extract
MCBS Medicare Current Beneficiary Survey
MMA Medicare Prescription Drug,
Improvement, and Modernization Act of
2003
MSA Medicare savings account
MSIS Medicaid Statistical Information
System
MSP Medicare Secondary Payor
MTMP Medication Therapy Management Program
NAIC National Association of Insurance
Commissioners
NCQA National Committee for Quality
Assurance
NCPDP National Council for Prescription Drug
Programs
NCVHS National Center for Vital and Health
Statistics
NDC National Drug Code
NHE National Health Expenditure
NPA National PACE Association
NPI National Provider Identifier
OACT Office of the Actuary (CMS)
OBRA Omnibus Budget Reconciliation Act
OCR Office for Civil Rights
OEPI Open enrollment period for
institutionalized individuals
OIG Office of the Inspector General
OPM Office of Personnel Management
P&T Pharmaceutical and therapeutic
PBA Pharmacy benefit administrator
PBMs Pharmacy benefit managers
PBP Plan Benefit Package
PDP Private prescription drug plan
[[Page 4197]]
PDSC Phased-down State contribution
PFFS Private fee-for-service plan
PHI Protected health information
PhRMA Pharmaceutical Manufacturers and
Researchers of America
PPO Preferred provider organization
PPV Pharmaceutical Prime Vendor
PSO Provider-sponsored organization
QDWIs Qualified disabled and working
individuals
QIl Qualified individuals
QIO Quality Improvement Organization
QMB Qualified Medicare beneficiaries
REACH Regional Education About Choices in
Health
RHC Rural Health Center
SCHIP State Children's Health Insurance
Program
SEP Special enrollment period
SHIP State health insurance assistance
program
SLMB Special Low-Income Beneficiaries
SOW Scope of work
SPAP State Pharmaceutical Assistance
Program
SPD Summary Plan Description
SPOC Single point of contact
SSA Social Security Administration
SSI Supplemental Security Income
SSRI Selective serotonin reuptake inhibitor
SSSGs Similarly Sized Subscriber Groups
TANF Temporary assistance for needy
families
TrOOP True out-of-pocket
U&C Usual and customary
URAC Utilization Review Accreditation
Commission
USP U.S. Pharmacopoeia
VA Department of Veterans Affairs
VDSA Voluntary data sharing agreement
I. Background
A. Medicare Prescription Drug, Improvement, and Modernization Act of
2003
Section 101 of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA) (Pub. L. 108-173) amended Title XVIII
of the Social Security Act (the Act) by establishing a new Part D: the
Voluntary Prescription Drug Benefit Program. (For ease of reference, we
will refer to the new prescription drug benefit program as Part D of
Medicare and we will refer to the Medicare Advantage Program described
in Part C of title XVIII of the Act -as Part C of Medicare.)
We believe that the new Part D benefit constitutes the most
significant change to the Medicare program since its inception in 1965.
The addition of outpatient prescription drugs to the Medicare program
reflects the Congress' recognition of the fundamental change in recent
years in how medical care is delivered in the U.S. It recognizes the
vital role of prescription drugs in our health care delivery system,
and the need to modernize Medicare to assure their availability to
Medicare beneficiaries. This final rule is designed to broaden
participation in the new benefit both by organizations that offer
prescription drug coverage and by eligible beneficiaries. In
conjunction with complementary improvements to the Medicare Advantage
program, these changes should significantly increase the coverage and
choices available to Medicare beneficiaries.
Effective January 1, 2006, the new program establishes an optional
prescription drug benefit for individuals who are entitled to or
enrolled in Medicare benefits under Part A and Part B. Beneficiaries
who qualify for both Medicare and Medicaid (full-benefit dual
eligibles) will automatically receive the Medicare drug benefit unless
Medicare has identified the individual as having other creditable
coverage through an employer-based prescription drug plan. The statute
also provides for assistance with premiums and cost sharing to eligible
low-income beneficiaries.
In general, coverage for the new prescription drug benefit will be
provided through private prescription drug plans (PDPs) that offer
drug-only coverage, or through Medicare Advantage (MA) (formerly known
as Medicare+Choice) plans that offer integrated prescription drug and
health care coverage (MA-PD plans). PDPs must offer a basic drug
benefit. MA-PDs must offer either a basic benefit, or a benefit with
broader coverage than the basic benefit, but at no additional cost to
the beneficiary. If this required level of coverage is offered, MA-PDs
or PDPs, but not fallback plans, may also offer supplemental benefits,
called ``enhanced alternative coverage,'' for an additional premium.
All organizations offering drug plans will have flexibility in
terms of benefit design, including the authority to establish a
formulary to designate specific drugs that will be available, and the
ability to have a cost-sharing structure other than the statutorily-
defined structure, subject to certain actuarial tests. Most Part D
plans also may include supplemental drug coverage such that the total
value of the coverage offered exceeds the value of basic prescription
drug coverage. The specific sections of the Act that address the
prescription drug benefit program are the following:
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-41 Definitions; treatment of references
to provisions in Part C.
1860D-42 Miscellaneous provisions.
Specific sections of the MMA that also
relate to the prescription drug
benefit program are the following:
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. Codification of Regulations
The final provisions set forth here are codified in 42 CFR Part
423-Voluntary Medicare Prescription Drug Benefit. Note that the
regulations--
for Medicare supplemental policies (Medigap) will continue
to be located in 42 CFR part 403 (subpart B);
for exclusions from Medicare and limitations on Medicare
payment (the physician self-referral rules) will continue to be located
in 42 CFR part 411;
for managed care organizations that contract with us under
cost contracts will continue to be located in 42 CFR part 417, Health
Maintenance Organizations, Competitive Medical Plans, and Health Care
Prepayment Plans;
for PACE organizations will continue to be located in 42
CFR part 460.
[[Page 4198]]
C. Organizational Overview of Part 423
The regulations set forth in this final rule are codified in the
new 42 CFR Part 423-Voluntary Medicare Prescription Drug Benefit. There
are a number of places in which statutory provisions in Part D
incorporate by reference specific sections in Part C of Medicare (the
MA program). The MA regulations appear at 42 CFR Part 422. Since the
same organizations that offer MA coordinated care plans will also be
required to offer MA-PD plans, we believed it was appropriate to adopt
the same organizational structure as part 422. Wherever possible, we
modeled the prescription drug regulations on the parallel provisions of
the part 422 regulations.
The major subjects covered in each subpart of part 423 are as
follows:
Subpart A, General Provisions: Basis and scope of the new part 423,
Definitions and discussion of important concepts used throughout part
423, and sponsor cost-sharing in beneficiary education and enrollment-
related costs (user fees).
Subpart B, Eligibility, Election, and Enrollment: Eligibility for
enrollment in the Part D benefit, enrollment periods, disenrollment,
application of the late enrollment penalty, approval of marketing
materials and enrollment forms, and the meaning and documentation of
creditable coverage. (Please note that other, related topics, are
discussed in the following subparts: Subpart P, eligibility and
enrollment for low-income individuals; Subpart S, provisions relating
to the phase-down of State contributions for dual-eligible drug
expenditures; Subpart F, calculation and collection of late enrollment
fees; Subpart C, plan disclosure; Subpart Q, eligibility and enrollment
for fallback plans; and Subpart T, the definition of a Medicare
supplemental (Medigap) policy.)
Subpart C, Benefits and Beneficiary Protections: Prescription drug
benefit coverage, service areas, network and out-of-network access,
formulary requirements, dissemination of plan information to
beneficiaries, and confidentiality of enrollee records. (Please note
that actuarial valuation of the coverage offered by plans, as well as
the submission of the bid, is discussed in subpart F. Access to
negotiated prices is discussed in subpart C, while the reporting of
negotiated prices is discussed in subpart G. Formularies are discussed
in subpart C, while appeals related to formularies are discussed in
subpart M. Incurred costs toward true out-of-pocket (TrOOP
expenditures) are discussed in subpart C, while the procedures for
determining whether a beneficiary's Part D out-of-pocket costs are
actually reimbursed by insurance or another third-party arrangement are
discussed in subpart J. Information that plans must disseminate to
beneficiaries is discussed in subpart C, while Part D information that
CMS must disseminate to beneficiaries is discussed in subpart B.)
Subpart D, Cost Control and Quality Improvement Requirements for
Part D Plans: Utilization controls, quality assurance, and medication
therapy management, as well as rules related to identifying enrollees
for whom medication therapy management is appropriate, consumer
satisfaction surveys, and accreditation as a basis for deeming
compliance.
Subpart E, Reserved.
Subpart F, Submission of Bids and Monthly Beneficiary Premiums;
Plan Approval: Bid submission, the actuarial value of bid components,
review and approval of plans, and the calculation and collection of
Part D premiums.
Subpart G, Payments to Part D plans for Qualified Prescription Drug
Coverage: Data submission, payments and reconciliations for direct
subsidies, risk adjustment, reinsurance, and risk-sharing arrangements.
Subpart H, Reserved.
Subpart I, Organization Compliance with State Law and Preemption by
Federal Law: Licensure, assumption of financial risk, solvency, and
State premium taxes.
Subpart J, Coordination Under Part D With Other Prescription Drug
Coverage: Applicability of Part D rules to the Medicare Advantage
program, waivers available to facilitate the offering of employer group
plans, waivers of part D provisions for PACE plans and 1876 cost plans
offering qualified prescription drug coverage, and procedures to
facilitate calculation of true out-of-pocket (TrOOP) expenses and
coordination of benefits with State pharmaceutical assistance programs
and other entities that provide prescription drug coverage. (Please
note that subpart C discusses, in more detail, coordination of benefits
from the perspective of which prescription drug benefits are covered by
Part D and the determination of which incurred beneficiary costs will
be counted as TrOOP expenditures. Provisions relating to disenrollment
for material misrepresentation by a beneficiary are discussed in
subpart B.)
Subpart K, Application Procedures and Contracts with PDP Sponsors:
Application procedures and requirements; contract terms; procedures for
termination of contracts; reporting by PDP sponsors.
Subpart L, Effect of Change of Ownership or Leasing of Facilities
during Term of Contract: Change of ownership of a PDP sponsor; novation
agreements; leasing of a PDP sponsor's facilities.
Subpart M, Grievances, Coverage Determinations and Appeals:
Coverage determinations by sponsors, exceptions procedures, and all
levels of appeals by beneficiaries.
Subpart N, Medicare Contract Determinations and Appeals:
Notification by CMS about unfavorable contracting decisions, such as
nonrenewals or terminations; reconsiderations; appeals.
Subpart O, Sanctions: Provisions concerning available sanctions for
participating organizations.
Subpart P, Premiums and Cost-Sharing Subsidies for Low-Income
Individuals: Eligibility determinations and payment calculations for
low-income subsidies.
Subpart Q, Guaranteeing Access to a Choice of Coverage (Fallback
Plans): Definitions, access requirements, bidding process, and contract
requirements for fallback PDPs.
Subpart R, Payments to Sponsors of Retiree Prescription Drug Plans:
Provisions for making retiree drug subsidy payments to sponsors of
qualified retiree prescription drug plans.
Subpart S, Special Rules for States--Eligibility Determinations for
Subsidies and General Payment Provisions: State/Medicaid program's role
in determining eligibility for low-income subsidy and other issues
related to the Part D benefit.
In addition, in subpart T, this final rule also makes changes to:
part 400 relating to definitions of Parts C & D, part 403 relating to
Medicare supplemental policies (Medigap), part 411 relating to
exclusions from Medicare and limitations on Medicare payment (the
physician self-referral rules), part 417 relating to cost-based health
maintenance organizations (HMOs), and part 460 relating to PACE
organizations.
II. Provisions of the Proposed Rule
We received 7,696 items of correspondence containing comments on
the August 2004 proposed rule. Commenters included managed care
organizations and other insurance industry representatives, pharmacy
benefit management firms, pharmacies and pharmacy education and
practice-related organizations, pharmaceutical manufacturers,
representatives of physicians and other health care professionals,
beneficiary advocacy
[[Page 4199]]
groups, representatives of hospitals and other healthcare providers,
States, employers and benefits consulting firms, members of the
Congress, Indian Health Service, Tribal and Urban Health Programs,
American Indians and Alaska Natives, beneficiaries, and others. We also
received many comments expressing concerns unrelated to the proposed
rule. Some commenters expressed concerns about Medicare unrelated to
the Prescription Drug Benefit, while others addressed concerns about
health care and health insurance coverage unrelated to Medicare.
Because of the volume of comments we received in response to the
proposed rule, we will be unable to address comments and concerns that
are unrelated to the proposed rule.
Most of the comments addressed multiple issues, often in great
detail. Listed below are the areas of the regulation that received the
most comments:
Transition of Coverage for Dual Eligibles from Medicaid to
Medicare
Access to Drugs in Long Term Care Facilities
Formulary Policies
Medication Therapy Management Requirements
Network Access Standards
Part B/Part D Drug Identification and Coordination
Dispensing Fees
In this final rule, we address comments received on the proposed
rule. For the most part, we will address issues according to the
numerical order of the related regulation sections.
A. General Provisions
1. Overview
Section 423.1 of subpart A specified the general statutory
authority for the ensuing regulations and indicated that the scope of
part 423 is to establish requirements for the Medicare prescription
drug benefit program. We proposed key definitions at Sec. 423.4 for
terms that appear in multiple sections of part 423.
Consistent with the MMA statute, in many cases we proposed
procedures that parallel those in effect under the MA program. Our goal
was to maintain consistency between these two programs wherever
possible; thus we evaluated the need for parallel changes in the MA
final rule when we received comments on provisions that affect both
programs.
Comment: Many commenters urged us to finalize regulations by early
January--and detailed business requirements soon thereafter. Some also
recommended that we make public certain key decisions and data sooner
than January in order to promote planning.
Response: We agree that the earliest possible release of program
requirements and final rules will facilitate planning and
implementation of new business processes required to offer and
administer this new program. Consequently we have made numerous draft
documents, such as the risk plan solicitation, PDP solvency
requirements, formulary review policies, and the actuarial bidding
instructions, available for public comment in November and December of
2004 and have expedited the rulemaking process to meet these goals. In
response to the lack of specificity regarding the PDP regions in our
proposed rule, we conducted extensive outreach in order to obtain
public input prior to the publication of our final rule. On December 6,
2004, we announced the establishment of 26 MA regions and 34 PDP
regions.
2. Discussion of Important Concepts and Key Definitions (Sec. 423.4)
a. Introduction
For the most part, the proposed definitions were taken directly
from section 1860D-41 of the Act. The definitions set forth in subpart
A apply to all of part 423 unless otherwise indicated, and are
applicable only for the purposes of part 423. For example, ``insurance
risk'' applies only to pharmacies that contract with PDP sponsors under
part 423.
Definitions that have a more limited application have not been
included in subpart A, but instead are set forth within the relevant
subpart of the regulations. For example, in subpart F, we have included
all the definitions related to bids and premiums. The detailed
definitions and requirements related to prescription drug coverage are
included in subpart C, but because of their direct relevance to the
bidding process they are also referenced in subpart F.
Following our discussion of important concepts, we provide brief
definitions of terms that occur in multiple sections of this preamble
and part 423. We believe that it is helpful to define these frequently
occurring terms to aid the reader, but that these terms do not require
the extended discussion necessary in our section on important concepts.
b. Discussion of Actuarial Equivalence, Creditable Prescription Drug
Coverage, PDP Plan Regions, Service Area, and User Fees
Discussion of the Meaning of Actuarial Equivalence
The concept of actuarial equivalence is applied in several
different contexts in Title I of the MMA. In very general terms,
actuarial equivalence refers to a determination that, in the aggregate,
the dollar value of drug coverage for a set of beneficiaries under one
plan can be shown to be equal to the dollar value for those same
beneficiaries under another plan. Given the various uses for this term
in the Part D provisions, we proposed the following relatively general
definition: ``Actuarial equivalence'' means a state of equivalent
values demonstrated through the use of generally accepted actuarial
principles and in accordance with section 1860D-11(c) of the Act and
Sec. 423.265(c)(3) of this part. This concept is discussed in further
detail in those sections of this preamble, such as section II.F, where
actuarial equivalence comes into play. We will provide further detailed
guidance on methods required to demonstrate actuarial equivalence.
Comment: One commenter requested that the definition of actuarial
equivalence be refined through examples or more descriptive language.
Response: We agree that it is critical to disclose our requirements
for calculation of actuarial values under Part D requirements as fully
and as expeditiously as possible to reduce uncertainty on the part of
potential plan sponsors. To that end we made available our draft bid
preparation rules and processes early in December 2004 for public
comment, and we will continue to refine our guidance to bidders through
vehicles such as the annual 45-day notice and the CMS website. We have
modified our definition to refer to this separate guidance.
Discussion of the Meaning of Creditable Prescription Drug
Coverage
Comments on creditable coverage are addressed in the preamble for
subparts B and T.
Prescription Drug Plan Regions
Prescription drug plan regions are areas in which a contracting PDP
sponsor must provide access to covered Part D drugs. Although we
included specifications for regions in Sec. 423.112, the regions
themselves were not set forth in the proposed rule. To the extent
feasible, we tried to establish PDP regions that were consistent with
MA regions. The MMA specifically required no fewer than 10 regions and
no more than 50 regions, not including the territories. For a further
discussion of the PDP regions, see section II.C of this preamble.
Comment: Many commenters expressed concerns about the MA and PDP
region decisions. Many argued that
[[Page 4200]]
regions should closely mirror existing State insurance markets to
maximize participation. Others representing rural constituencies argued
for larger regions to encourage offering of coverage in rural areas.
Response: We conducted a market survey and analysis, including an
examination of current insurance markets as required in the MMA. Key
factors in the survey and analysis included payment rates; eligible
population size per region; preferred provider organization (PPO)
market penetration; current existence of PPOs, MA plans, or other
commercial plans; and presence of PPO providers and primary care
providers. Additional factors were also considered, including solvency
and licensing requirements, as well as capacity issues. Recognizing the
lack of specificity regarding the PDP regions in our proposed rule, we
conducted extensive outreach in order to obtain public input prior to
the publication of our final decision. On December 6, 2004, we
announced the establishment of 26 MA regions and 34 PDP regions. For
maps and fact sheets on the regions, please see http://www.cms.hhs.gov/medicarereform/mmaregions/
.
Service Area
In the proposed rule we proposed that Medicare beneficiaries would
be eligible to enroll in a PDP or an MA-PD plan only if they reside in
the PDP's or MA-PD plan's ``Service Area.'' For PDPs the service area
is defined as the region or regions for which they must provide access.
This is the Region established by CMS either pursuant to proposed Sec.
423.112, or, in the case of fallback plans, the fallback service area
pursuant to Sec. 423.859, within which the PDP is responsible for
providing access to the Part D drug benefit in accordance with the
access standards in proposed Sec. 423.120. Under the MA program, an MA
plan's service area is defined in Sec. 422.2. For coordinated care
plans, the definition of ``service area'' expressly includes the
condition that the service area is an area in which access is provided
in accordance with access standards in Sec. 422.112.
We also proposed that for purposes of enrolling in Part D with a
PDP, or under an MA-PD plan, the definition of Service Area that
governs eligibility to enroll is the area within which the Part D
access standards under Sec. 423.120 are met. Beneficiaries in jail or
prison do not have access to pharmacies available as required under
Sec. 423.120. Therefore, such beneficiaries would not be considered to
be in a PDP or MA-PD plan's Service Area for purposes of enrolling in
Part D. Incarcerated individuals accordingly would not be assessed a
late penalty when they enroll in Part D (either with a PDP or MA-PD
plan) upon being released. The same analysis applies with regard to a
beneficiary who lives abroad, and does not reside within the boundaries
of any PDP Region or MA-PD Service Area. We have modified our
definition of service area to clarify our intent as proposed.
Comment: Several commenters asked that we waive the service area
requirement for employer group PDP plans.
Response: We agree that we have the authority to waive the service
area requirement for employer-sponsored group prescription drug plans,
and we plan to do so in appropriate cases. We will provide further
details on waivers in separate CMS guidance.
Sponsor Cost-Sharing in Beneficiary Education and Enrollment
Related Costs-User Fees (Sec. 423.6)
The last section of subpart A proposed regulations implementing the
user fees provided for in section 1857(e)(2) of the Act, as
incorporated by section 1860D-12(b)(3)(D) of the Act. These fees are
currently required of MA plans for the purpose of defraying part of the
ongoing costs of the national beneficiary education campaign that
includes developing and disseminating print materials, the 1-800-
MEDICARE telephone line, community based outreach to support State
health insurance assistance programs (SHIPs), and other enrollment and
information activities required under section 1851 of the Act and
counseling assistance under section 4360 of the Omnibus Budget
Reconciliation Act of 1990 (Pub. L. 103-66).
The MMA expands the user fee to apply to PDP sponsors as well as MA
plans. The expansion of the application of user fees recognizes the
increased Medicare beneficiary education activities that we would
require as part of the new prescription drug benefit. In 2006 and
beyond, user fees will help to offset the costs of educating over 41
million beneficiaries about the drug benefit through written materials
such as a publication describing the drug benefit, internet sites, and
other media. The user fee provisions establish the applicable aggregate
contribution portions for PDP sponsors and MA organizations through two
calculations.
Comment: Several commenters supported the extension of user fees to
PDP sponsors in addition to MA plans. One commenter emphasized the need
for Medicare to provide national beneficiary educational materials in
accessible formats (including Braille and other languages commonly used
by beneficiaries), as well as telecommunications equipment to support
beneficiaries with hearing impairments, in order to meet the various
needs of Medicare beneficiaries with disabilities. Another commenter
urged us to focus beneficiary education efforts on helping
beneficiaries make a choice, as opposed to simply describing the array
of choices. This commenter also urged us not to overlook the M+C
population in its outreach campaign.
Response: We have a long-standing tradition of making our
beneficiary education materials accessible in a variety of formats to
meet the needs of people with disabilities and special communications
barriers. Beneficiary publications on a variety of topics are available
in Braille, large print, and audiotape versions, in addition to
conventional formats. We expect to continue these practices when
educating beneficiaries about MMA topics. In addition, we are
finalizing a partnership with the Social Security Administration (SSA)
that will allow some of our educational products to be translated into
14 languages (other than English and Spanish) and reach a broader
audience.
We are currently planning the development of a range of tools and
strategies that will help beneficiaries make a choice that meets their
needs. We agree that this action is an essential part of our education
process, in addition to building general awareness and understanding.
We will address the needs of multiple audiences through our outreach
and education efforts, including those with M+C (MA) plans.
c. Definitions of Frequently Occurring Terms
The following definitions were discussed in the preamble to our
proposed rule:
Full-benefit dual eligible beneficiary means an individual who
meets the criteria established in Sec. 423.772 (Subpart P), regarding
coverage under both Part D and Medicaid.
Comment: One commenter asked us to clarify whether individuals
eligible for Medicaid at the special income level for long term care
qualify as full benefit dual eligibles for a full subsidy.
Response: Yes, all individuals who qualify for Medicaid, including
expansion populations and persons eligible for Medicaid in long term
care facilities under a State's special income standard which does not
exceed 300 percent of the supplemental security income (SSI) payment
standard will qualify as full benefit dual eligible beneficiaries
eligible for a full subsidy.
Insurance risk means, for a participating pharmacy, risk of the
type
[[Page 4201]]
commonly assumed only by insurers licensed by a State and does not
include payment variations designed to reflect performance-based
measures of activities within the control of the pharmacy, such as
formulary compliance and generic drug substitutions, nor does it
include elements potentially in the control of the pharmacy (for
example, labor costs or productivity).
Comment: Several commenters supported our definition of `insurance
risk', including the exclusion of performance-based compensation as
this is not commonly viewed as insurance risk.
Response: We will adopt the definition as proposed.
MA means Medicare Advantage, which refers to the program authorized
under Part C of Title XVIII of the Act.
MA-PD plan means an MA plan that provides qualified prescription
drug coverage.
Medicare prescription drug account means the account created within
the Federal Supplementary Medical Insurance Trust Fund for purposes of
Medicare Part D.
Part D eligible individual means an individual who is entitled to
Medicare benefits under Part A or enrolled in Medicare Part B. For
purposes of this part, enrolled under Part B means ``entitled to
receive benefits'' under Part B.
Prescription drug plan or PDP means prescription drug coverage that
is offered under a policy, contract, or plan that has been approved as
specified in Sec. 423.272 and that is offered by a PDP sponsor that
has a contract with CMS that meets the contract requirements under
subpart K or in the case of fallback PDPs also under subpart Q.
PDP region means a prescription drug plan region as determined by
CMS under Sec. 423.112.
PDP sponsor means a nongovernmental entity that is certified under
this part as meeting the requirements and standards of this part for
that sponsor.
Comment: Several commenters noted that the terms PDP sponsor and MA
organization offering an MA-PD plan were not consistently used in the
proposed rule to represent distinct and mutually exclusive entities. As
a result the proposed rule was not always clear regarding when
requirements or options applied only to one or the other entity, or
both.
Response: We acknowledge that the terminology regarding sponsors
and plans was inconsistently applied. We have revised the language in
the final rule accordingly and have also standardized the terms `Part D
plan' and `Part D plan sponsor' when referring to all plans and
sponsors in general. Consequently we have relocated these terms from
subpart C to this subpart and clarified that references to ``Part D
plans'' in the final rule refer to any or all of MA-PD plans, PDPs,
PACE plans and cost plans. Likewise, the term ``Part D plan sponsor''
refers to MA organizations offering MA-PD plans, PDP sponsors, and
sponsors of PACE plans and cost plans.
Comment: Several commenters asked that we be flexible in its
definition of a non-governmental entity to allow either the creation of
State-sponsored entities as PDPs or the selection of a preferred PDP
entity for Medicaid dual eligible and SPAP populations.
Response: While we understand and support the goals of minimizing
client confusion and facilitating continuity of care, we believe the
requirements imposed by sections 1860D-41(13) and 1860D-23(b)(2) of the
Act do not allow us to approve State-sponsored PDPs or the selection of
preferred PDPs for State populations. We would note, however, that we
believe we can waive the non-governmental requirement in section 1860D-
41(23) of the Act under the employer waiver authority for States that
seek to sponsor Part D plans on behalf of their employees. This is
discussed in more detail in subpart J of this rule.
d. Financial Relationships between PDP Sponsors, Health Care
Professionals and Pharmaceutical Manufacturers
The financial relationships that exist between or among PDP
sponsors, health care professionals (including physicians and
pharmacists), or pharmaceutical manufacturers may be subject to the
anti-kickback statute and, if the relationship involves a physician,
the physician self-referral statute. Nothing in this regulation should
be construed as implying that financial relationships described in this
final rule meet the requirements of the anti-kickback statute or
physician self-referral statute or any other applicable Federal or
State law or regulation. All such relationships must comply with
applicable laws.
In addition to the provisions in these regulation, under section
6(a)(1) of the Inspector General Act of 1978, as amended, OIG has
access to all records, reports, audits, reviews, documents, papers and
other materials to which the Department has access that relate to
programs and operations for which the Inspector General has
responsibilities under the Inspector General Act. The provisions in
these regulations do not limit the Office of the Inspector General's
(OIG) authority to fulfill the Inspector General's responsibilities
under Federal law.''
e. ERISA application and requirements
The rules contained in this rulemaking apply for purposes of Title
I of the MMA and no inference should be drawn from anything in this
rule regarding the applicability of title I of ERISA. In addition,
nothing in this rulemaking should be construed as relieving a plan
administrator or other fiduciary of obligations under title I of ERISA.
B. Eligibility and Enrollment
We outlined the eligibility and enrollment requirements for Part D
plans in subpart B of the August 2004 proposed rule. We received over
100 comments on this subpart. Below we summarize the provisions of the
proposed rule and our final rule and respond to public comments.
(Please refer to the proposed rule (69 FR 46637) for a detailed
discussion of our proposals.)
1. Eligibility for Part D (Sec. 423.30)
Section 101 of the MMA established section 1860D-1 of the Act,
which includes the eligibility criteria an individual must meet in
order to obtain prescription drug coverage and enroll in a Part D plan.
Section 1860D-1(a)(3)(A) of the Act defines a ``Part D eligible
individual'' as an individual who is entitled to Medicare benefits
under Part A or enrolled in Part B. Further, in order to be eligible to
enroll in a PDP plan, Sec. 423.30(a) of the proposed rule provided
that the individual must reside in the plan's service area, and cannot
be enrolled in an MA plan, other than a Medicare savings account (MSA)
plan or private fee-for-service (PFFS) plan that does not provide
qualified prescription drug coverage. In addition, Sec. 423.4 of the
proposed rule provided the definition of service area, which describes
that for purposes of eligibility to enroll to receive Part D benefits,
certain access standards must be met, hence, making certain individuals
ineligible to enroll.
Generally, a Part D eligible individual enrolled in an MA plan that
does not provide qualified prescription drug coverage (that is, an MA
plan) may not enroll in a PDP. There are, however, exceptions under
sections 1860D-1(a)(1)(B)(iii) and (iv) of the Act for individuals who
are enrolled in either an MA private fee-for-service plan (as defined
in section 1859(b)(2) of the Act) that does not provide qualified
prescription drug coverage or an MSA plan (as defined in section
1859(b)(3) of the Act). We provided for these
[[Page 4202]]
exceptions in Sec. 423.30(b) of the proposed rule.
Except as provided above, in accordance with section 1860D-
1(a)(1)(B)(i) of the Act, and as provided in Sec. 423.30(c) of the
proposed rule, a Part D eligible individual who is enrolled in an MA-PD
plan must obtain prescription drug coverage through that plan. In order
to enroll in an MA-PD plan, a Part D eligible individual must also meet
the eligibility and enrollment requirements of the MA-PD plan as
provided in Sec. 422.50 through Sec. 422.68 of the proposed rule
establishing and regulating the MA program (CMS-4069-P) which was also
published August 2004.
Except as otherwise provided below, the final rule adopts the
eligibility criteria set forth in Sec. 423.30 of the proposed rule.
Comment: Several commenters requested clarification of the
definition of a Part D eligible individual. One commenter stated than a
literal reading of the proposed definition appears to say that any
individual who is eligible for Medicare but not enrolled could get the
Part D benefit, and asks if an individual must enroll in Part A or Part
B in order to be eligible for Part D. One commenter indicated that it
was unclear how CMS would coordinate Part D eligibility with any
retroactive eligibility determinations made by SSA.
Response: Section 1860D-1(a)(3)(A) of the Act defines a ``Part D
eligible individual'' as ``an individual who is entitled to benefits
under Part A or enrolled under Part B.''
In other context, we generally have interpreted the concept of
``entitled'' to benefits to mean that an individual has met all of the
necessary requirements for a benefit (that is, is eligible for the
benefit), and has actually applied for and been granted coverage. We
believe for purposes of applying the definition of ``Part D eligible
individual'' under section 1860D-1(a)(3) of the Act, we believe this
interpretation of ``entitlement'' is the appropriate interpretation.
Accordingly, we will deem an individual ``entitled'' to Part A, and
thus a Part D eligible individual, if the individual is eligible for
benefits under Part A, and has actually applied for and been granted
coverage under Part A. On the other hand, under our Medicare Part B
regulations at part 407, an individual is considered to be ``enrolled''
in Part B when he or she has applied for Part B coverage (or is deemed
to have applied). Nevertheless, we do not believe this interpretation
of ``enrolled'' in Part B is the correct interpretation of section
1860D-1(a)(3)(A) of the Act, and instead interpret ``enrolled under
Part B'' to mean that the individual is entitled to receive benefits
under Part B.
When establishing eligibility and enrollment rules for the MA
program upon its inception, we adopted a similar interpretation of
section 1851(a) (3) of the Act. Section 1851(a) (3) of the Act defined
the term ``Medicare+Choice eligible individual'' to mean an individual
who is entitled to benefits under part A ``and enrolled under part B.''
As we explained in our proposed rule for the Medicare+Choice program
(see 63 FR 34979), we believe that the Congress intended that we
provide an individual the opportunity to enroll in the Medicare+Choice
program only if entitled to actually receive benefits under Part B in
addition to Part A. As we explained, under some situations, an
individual may apply for or be deemed to have applied for Part B before
he or she is actually entitled to receive coverage. For example, if an
individual applies for Part B coverage after he or she reaches age 65,
the individual may not actually be entitled to Part B coverage under
section 1837 of the Act until one or several months after the month of
application and enrollment. If we had interpreted section 1851(a) (3)
of the Act to permit individuals to enroll in a Medicare+Choice plan
when an individual has only been enrolled in Part B, but is not yet
entitled to Part B, he or she could be entitled to the benefits under a
Medicare+Choice plan before actually being entitled to Medicare Part B
coverage. In order to avoid such a result, we interpreted the language
``enrolled'' in Part B in section 1851(a) (3) of the Act to mean
``entitled'' to Part B.
We similarly will interpret section 1860D-1(a)(3)(A) of the Act as
providing that an individuals is eligible for Part D only if the
individual is entitled to receive benefits under Part A or Part B.
Section 1860D-1(b)(1)(B) of the Act requires us to use rules similar to
and coordinated with certain rules for enrollment that govern
eligibility for the MA program. Hence, we believe that the Congress
intended that we provide an individual the opportunity to enroll in
part D only if entitled to actually receive benefits under Part B (or
Part A); otherwise an individual would be entitled to receive coverage
of Part D drugs under PDP before being entitled to receive benefits
under original fee-for-service Medicare.
Our regulations at Sec. 422.2 define an MA eligible individual as
someone who meets the requirements of Sec. 422.50, which outlines the
various criteria that an individual must meet to be eligible to elect
an MA plan, including: entitlement to Parts A and B, residency in a
plan's service area, making an enrollment election and agreeing to
abide by the rules of the MA plan. We intend to apply a parallel
approach to the Part D program. We will amend Sec. 423.4 to define a
Part D eligible individual as an individual who meets the requirements
at Sec. 423.30, that is, the individual is entitled to Medicare
benefits under Part A or enrolled in Part B and lives in the service
area of the Part D plan. We clarify, however, that ``enrolled'' in Part
B means that the individual not only has applied for and enrolled in
Part B, but is also receiving coverage for Part B services, in
accordance with part 407.
We have included in Sec. 423.30 to be eligible to enroll in a Part
D plan, the individual must also reside in the Part D plan's service
area and not be enrolled in another Part D plan.
We have clarified Part D eligibility for those individuals for whom
eligibility determinations for Medicare Part A or B have been made
retroactively, which results in retroactive entitlement to these
programs. The MA statute at section 1851(f) of the Act provides that
initial elections shall take effect upon the date the individual
becomes entitled to Part A or B, except as the Secretary may provide
``in order to prevent retroactive coverage.'' Under the MA program, an
individual who has received a retroactive eligibility determination for
Medicare Part A or B is not permitted to enroll in an MA plan
retroactively. Again, using section 1860D-1(b)(1)(B) of the Act that
directs us to establish rules similar to those in MA, we envision
individuals enrolling in a Part D plan prospectively and have revised
Sec. 423.30 so that individuals who become entitled to Medicare Part A
or Part B benefits for a retroactive effective date are deemed Part D
eligible as of the month in which notice of Medicare Part A or Part B
entitlement is provided.
Such revisions at Sec. 423.4 and Sec. 423.30 will clarify that an
individual is eligible for Part D at the same time an individual is
eligible to enroll in Part D.
Comment: Commenters requested clarification on the eligibility of
incarcerated individuals. One commenter did not believe that we had the
authority to create such exclusion. Another requested clarification of
the ability of individuals released from incarceration on probation or
parole to enroll in Part D.
Response: In the preamble of the proposed rule, we explained that
individuals who are incarcerated likely do not have access to Part D
services, as they cannot obtain their prescription drugs from network
pharmacies, yet
[[Page 4203]]
technically the jail or prison may be located within the larger
geographic area encompassing a PDP's service area. As a result, the
individual would be subject to a late enrollment penalty for not
enrolling in a Part D plan. As a result, we believe that it is
appropriate to provide in Sec. 423.4 that a PDP's service area would
exclude areas in which incarcerated individuals reside (that is, a
correctional facility) and as a result, incarcerated individuals would
be ineligible to enroll in a PDP and we have revised the definition to
clarify this point. Upon release from incarceration, such as for
probation or parole, individuals will be considered eligible for Part D
by living in a PDP service area, if they meet other Part D eligibility
requirements.
Comment: One commenter suggested that we consider individuals who
are residents of a State mental institution to be out of the service
area and therefore ineligible for enrollment in a Part D plan.
Response: We would not consider individuals who are residing in a
State mental institution to be out of the service area. Medicare
beneficiaries residing in such institutions have access to Medicare
benefits under Parts A and B and therefore would be entitled to enroll
in a Part D plan. However, we do recognize that individuals in a State
mental institution may be limited to the pharmacy network contracted
with the facility. Therefore, we will provide such individuals a
Special Enrollment Period (SEP) to enable them to join the appropriate
Part D plan based upon their situation. We will clarify this in
guidance following publication of this rule.
Comment: One commenter asked that we clarify Sec. 423.30(c) in the
final rule to indicate when an individual in an MA-PD plan can change
plans.
Response: The provisions explaining the opportunities for
individuals to make PDP enrollment choices are fully set forth at Sec.
423.38 of the final rule. The requirements for MA plans are outlined
under Sec. 422.50 through Sec. 422.80.
Comment: One commenter suggested that we permit beneficiaries
enrolled in an MA plan to enroll in a PDP or disenroll from the MA plan
and enroll in an MA-PD plan.
Response: Section 1860D-1(a)(1) of the Act specifically prohibits
an MA plan enrollee from enrolling in a PDP except in the case of
enrollees of a MA PFFS plan that does not provide qualified
prescription drug coverage or enrollees of an MSA plan. All
individuals, including enrollees of MA plans, can enroll in a Part D
plan during the established enrollment periods, as described at Sec.
423.38 of the final rule.
2. Enrollment Process (Sec. 423.32)
Section 1860D-1(b)(1) of the Act requires that we establish a
process for the enrollment, disenrollment, termination, and change of
enrollment of Part D eligible individuals in prescription drug plans.
The statute further requires that this process use rules similar to,
and coordinated with, the enrollment, disenrollment, termination, and
change of enrollment rules for MA plans under certain provisions of
section 1851 of the Act. Thus, we proposed, where possible, to adopt
the MA enrollment requirements provided under Sec. 422.50 through
Sec. 422.80.
Generally, a Part D eligible individual who wishes to make, change,
or discontinue an enrollment during applicable enrollment periods must
file an enrollment with the PDP directly. However, we will allow PDPs
to use other enrollment mechanisms, as approved by us. In addition,
Sec. 423.32 of the final rule provides that beneficiaries will remain
enrolled in their PDP without having to actively re-enroll in that PDP
at the beginning of each calendar year. Except as otherwise provided
below, the final rule adopts the enrollment rules set forth in Sec.
423.34 of the proposed rule.
Comment: Several commenters submitted identical comments on various
aspects of the coordination of the enrollment process reflected at both
Sec. 423.34(b) and Sec. 423.42(a).
Response: Commenters provided similar comments about the enrollment
process at Sec. 423.34(b)(1) of the proposed rule and the coordination
of enrollment and disenrollment process at Sec. 423.42(a) of the
proposed rule. After reviewing these comments, we recognized that these
sections were duplicative and could cause confusion. To address this
problem, we have reorganized the following subjects in subpart B into a
more logical order: the enrollment process at Sec. 423.32 (previously
proposed Sec. 423.34); auto-enrollment process for dual eligible
individuals at Sec. 423.34 (previously proposed Sec. 423.34(d); the
disenrollment process at Sec. 423.36; the enrollment periods in Sec.
423.38; and the effective dates at Sec. 423.40. We believe that this
will simplify and clarify these provisions.
Comment: Several commenters supported the inclusion of regulatory
provisions that would permit enrollment through means other than the
submission of signed, hard-copy enrollment forms in order to facilitate
flexibility for future enrollments. These commenters supported allowing
alternative mechanisms for enrollment, particularly electronic
enrollments, to enable beneficiaries with access to computers to enroll
or disenroll through secure websites established by PDP sponsors.
Another commented that we should make the same enrollment mechanisms
that are available to Medicare Advantage plans available to PDP
sponsors. A few commenters requested clarification as to the ``other
mechanisms'' referenced by us in the proposed rule, specifically what
types of enrollment are envisioned and the populations to which these
``other mechanisms'' would be applied. One commenter recommended we
allow electronic enrollments through a CMS-hosted web site, and that we
develop a standard registration process to authenticate the
enrollments. Another stated that processing applications via the
Internet would require significant systems changes and that the
regulation appeared to lack requirements necessary to process
applications in such a manner.
Response: We were pleased by the general support for flexibility
and creativity in this important part of the enrollment process, and we
anticipate working in collaboration with all of our partners to develop
enrollment processes that will be convenient, reliable and secure for
all beneficiaries. We will adopt this provision as proposed at Sec.
423.32(b), rather than specify or limit the types of alternative
enrollment processes that may be used. We will continue to assess the
technology available and provide additional operational guidance in the
future, including specific systems requirements and other information
necessary to implement these processes.
Comment: We received several comments requesting clarification of
what parties are authorized to act on behalf of a beneficiary for
enrollment purposes. One commenter noted that the regulation does not
appear to recognize a beneficiary's ``authorized'' or ``personal''
representative who could be designated to make decisions for
individuals and refers to the personal representative definition that
we created in subpart P of the proposed rule. Another commenter was
concerned that individuals in long-term care facilities do not have a
designated surrogate decision maker in place to make such a decision
and lack the cognitive capacity to select a PDP. While some commenters
stated that we should allow an individual's personal representative to
enroll a person into a PDP, others requested that we recognize specific
representatives who could effectuate
[[Page 4204]]
such an enrollment within the regulatory text (for example, SPAP).
Response: In the regulation, we refer to a Part D eligible
``individual'' who wishes to enroll. An individual who has been
appointed as the legal representative to execute such an enrollment on
behalf of the beneficiary, in accord with State law, would constitute
the ``individual'' for purposes of making the enrollment or
disenrollment. As with the Medicare Advantage provisions, we will
recognize State laws that authorize persons to effect an enrollment for
Medicare beneficiaries. We will include more information on this
clarification in future operational guidance.
Comment: Several commenters asked that we clarify that nothing
would prevent a person or entity from assisting a beneficiary in
completing and submitting his or her application to the PDP, as the MA
program allows at Sec. 422.60(c).
Response: We agree and have revised the regulatory language at
Sec. 423.32(b) to allow for such assistance, consistent with the MA
regulations.
Comment: One commenter suggested that we set forth an appeals
process for beneficiaries who are denied enrollment.
Response: Although we agree with the commenter that we should
establish a procedure for beneficiaries to dispute enrollment denials,
we do not believe that a formal appeals process is necessary. Instead,
we intend to address beneficiary complaints regarding enrollment in a
similar manner as we have done under the MA program. Under the MA
program, individuals are advised through their notice of denial of
enrollment that if they disagree with the decision to deny enrollment,
they may contact the MA organization. We monitor MA organizations
periodically to ensure that they are providing this notification. We
also respond to specific inquiries from beneficiaries and investigate
possible situations where MA organizations have failed to notify
beneficiaries of the process or where an organization may have
incorrectly denied a beneficiary's enrollment. If we discover a
beneficiary was incorrectly denied enrollment we can require the MA
organization to enroll that individual, as provided in our manual
instructions. We believe our current process provides adequate remedies
to beneficiaries and will therefore establish a similar process for
PDPs. We decline to establish a separate appeals process for these
denials at this time.
Comment: One commenter requested that we specify in the final rule
that PDPs must provide written notice of enrollment decisions to each
consumer.
Response: In Sec. 423.32(d) we require PDPs to provide all
individuals prompt notice of acceptance or denial of enrollment in the
PDP in a format and manner specified by CMS. We will provide specific
instructions on the format and manner of these required notices in
operational guidance and intend to provide model language and materials
for PDPs to use as well. Looking ahead, we believe that beneficiaries
may want to receive documents (such as notices) in a variety of
formats, rather than just in writing. To that end, we decline to
require a specific format in regulation, thereby preserving the
flexibility to foster innovation and creativity to satisfy beneficiary
and industry expectations in the future.
Comment: One commenter suggested that individuals enrolled in PACE
should remain enrolled in the PACE organization for purposes of Part D
coverage effective January 1, 2006. Another commenter suggested a
similar process be established for cost plans.
Response: Section 1860D-21(f) of the Act provides that a PACE plan
may elect to provide qualified prescription drug coverage to its Part D
eligible enrollees. Section 1860D-21(e) of the Act establishes a
similar directive to cost-based HMO or competitive medical plan (CMP)
plans. Discussion of the application of the Part D benefit to both PACE
and cost-based HMO or CMP plans can be found under subpart T of the
proposed rule. For PACE plans, we stated that PACE plans generally will
be treated similar to MA local plans. Applying the appropriate MA rules
from Sec. 422.66, PACE enrollees will receive their Part D benefits
through the PACE plan if the PACE plan has elected to provide such
coverage. Beneficiaries who are enrolled in PACE plans that provide
such coverage as of December 31, 2005 will remain enrolled in that plan
on January 1, 2006. For cost-based HMO or CMP plans, we state that cost
contracts may offer Part D coverage only to individuals also enrolled
for Medicare in the cost contract. As a result of the provisions for
PACE and cost-based HMO or CMP plans, we revised Sec. 423.32(f) to
provide that individuals who are in PACE or cost-based HMO or CMP plans
that provide prescription drug coverage on December 31, 2005 will
remain enrolled in that plan and be enrolled in the Part D benefit
offered through that plan as of January 1, 2006.
3. Enroll Full-Benefit Dual Eligible Individuals (Sec. 423.34)
In the proposed rule, Sec. 423.34(d) required that full benefit
dual eligible individuals who fail to enroll in a PDP or MA-PD during
their initial enrollment period would be automatically enrolled into an
appropriate Part D plan, specifically a PDP with a Part D premium that
does not exceed the low-income premium subsidy amount. When there is
more than one available PDP in a region, full benefit dual eligible
individuals would be auto-enrolled on a random basis.
All beneficiaries in an MA plan with any prescription drug coverage
on December 31, 2005 will be deemed enrolled on January 1, 2006 in an
MA-PD plan offered by the same MA organization in accordance with Sec.
422.66(e)(2) and (e)(3) of Title II of the final regulation even if the
monthly beneficiary premium exceeds the low-income premium subsidy
amount. For full-benefit dual eligible individuals only, the proposed
rule provided that those already enrolled in an MA plan without any
prescription drug coverage would be auto-enrolled into an MA-PD plan
offered by the same organization, and that has a monthly Part D premium
that does not exceed the low-income premium subsidy amount. The
proposed rule clarified that those auto-enrolled into a Part D plan may
affirmatively decline Part D coverage or change Part D plans.
In a related area, Sec. 423.36(c) of the proposed rule provided a
SEP for full-benefit dual eligible individuals that permits them to
change Part D plans at any time. Separately, there already exists a SEP
for full-benefit dual eligible individuals to enroll in or disenroll
from a Medicare Advantage plan at any time, and this will be expanded
to include MA-PD plans. This SEP is provided in operational guidance
(see section 30.4.4-5 of Chapter 2 of the Medicare Managed Care
Manual), in accordance with section 1851(e)(4)(D) of the Act, which
gives us the authority to provide Special Enrollment Periods for
exceptional circumstances. Taken together, the PDP and MA-PD plan SEPs
mean a full-benefit dual eligible individual may switch from Original
Medicare and a PDP into an MA-PD plan and vice versa; from one PDP to
another; and from one MA-PD plan to another MA-PD plan at any time.
We requested comment on two areas: whether we or States should
conduct auto-enrollment, and how to address an inherent conflict in the
statute, whereby the statute requires auto-enrollment of full-benefit
dual eligible individuals
[[Page 4205]]
into a Part D plan with a premium that does not exceed the low-income
premium subsidy amount, but does not speak to those instances in which
an individual is enrolled in an MA organization whose premium for the
available MA-PD plan(s) exceeds the low-income premium subsidy amount.
Except as otherwise provided below, the final rule adopts the
enrollment rules for full-benefit dual eligible individuals set forth
in Sec. 423.34(d) of the propose rule.
Comment: Several commenters supported CMS performing the auto-
enrollment function. They viewed it as the most appropriate entity
because it is in the best position to randomly assign beneficiaries to
MA-PD plans or PDPs in the region, and to establish links with each MA-
PD plan or PDP in each region, thereby more efficiently auto-enrolling
individuals. Some commenters also suggested that we consider adding an
enrollment broker to the process for populations with special health
care needs.
A number of other commenters recommended that States either be
required or have the option to perform the auto-enrollment function, as
they view the States as having more readily available data identifying
dual eligible individuals and a vested interest in ensuring these
individuals are enrolled in appropriate Part D plans. This option was
also viewed as advancing care coordination and ensuring continuity of
care. It was noted that these options also present a disincentive for
States to maximize enrollment, since the phased-down State contribution
payments are tied to the number of Part D eligible individuals enrolled
in Part D plans. Commenters also acknowledged that, if we were to
afford States the option of conducting the auto-enrollment function, we
would have to develop its own systems for auto-enrollment in States
that lack the capacity to develop such systems. Commenters supporting
this option felt strongly that we should reimburse States for all of
their costs related to enrollment activities they are required to
perform.
Some commenters recommended that an independent third party
coordinate the enrollment process. Those parties could include State
and local officials and representatives of nonprofit organizations
specializing in care for seniors. One also suggested that the
contracted agent would need to be compliant with the Health Insurance
Portability and Accountability Act of 1996 (HIPAA) privacy rule and
should have no financial incentives regarding a full-benefit dual
eligible individual's assignment beyond the contract between it and
CMS.
Response: We agree with those who commented that we, or a
contractor on our behalf, should perform the auto-enrollment function
because we can better ensure consistent, timely implementation. In
addition, we would not have to develop and implement a separate
administrative structure to oversee auto-enrollment being performed by
some or all of the States. Finally, it would likely be more cost
effective for us to have a single entity perform auto-enrollment,
rather than pay 51 separate entities. For these reasons, we will modify
the final regulation to specify that we will conduct the auto-
enrollment process.
At this time, we do not envision contracting with an enrollment
broker to provide more intensive choice counseling for beneficiaries
subject to auto-enrollment. Because the statute makes us ultimately
responsible for the auto-enrollment process, we will, at least
initially, conduct it ourselves. Instead of hiring a new third party,
we believe it would be more effective to partner with existing
stakeholders to conduct broad-based outreach and education; provide
clear and comprehensive information to beneficiaries; and refer
individuals to either the 1-800-MEDICARE toll-free line or to Part D
plans for additional information. However, if we decide in the future
to contract with an independent enrollment broker, we agree with the
commenter that the entity would need to be free of conflicts of
interest and comply with HIPAA privacy rules. We note that any
delegation to a third party would make the third party a business
associate of ours for HIPAA purposes, since the entity would be
performing a function on behalf of us.
Comment: Many commenters recommended that we define ``random'' to
include auto-enrollment based on beneficiaries' particular drug needs,
pharmacy affiliation, or on their classification as a special needs
population. Many commenters expressed concerns about how random
assignment will impact individuals who are on drug regimens on which
they have been previously stabilized. They were concerned that these
individuals would be auto-enrolled in a ``low-cost'' plan that may not
cover the drugs they need. Without direct access to the coverage they
need, this population would have no real choice but to switch
medications, even though changing medications can be difficult and lead
to adverse health outcomes, reactions, and so on.
Several other commenters expressed similar concerns about
individuals who reside in long-term care facilities. In addition, some
long-term care facilities require residents to use a pharmacy selected
and contracted by the facility. One commenter requested that we define
``random,'' specifically detail how we envision the random process
would work, and seek further public comment.
Response: We share the commenters' concerns with ensuring access to
necessary prescription drug coverage for vulnerable populations. For
ensuring continued access to existing drugs prescribed for an
individual, please refer to comments on Sec. 423.120(b) of the final
regulation. For ensuring access to long-term care facilities'
contracted pharmacies, please refer to comments on Sec. 423.120(a) of
the final regulation.
The systems challenges associated with anything other than a random
process would be significant, and possibly result in inappropriate
assignment or delayed implementation. For example, we have drug
utilization data for Medicaid beneficiaries, but there is a time lag in
receiving those data. Furthermore, we do not currently have access to
information about the pharmacies that contract with long-term care
facilities. Finally, we realize that pharmacy affiliation and
particular drug needs are only two of the variables that impact a
beneficiary's choice of a Part D plan. For example, a beneficiary may
also consider cost-sharing, formulary structure, customer service and,
in the case of MA-PD plans, whether she or he would want to receive all
of her or his Medicare benefits from one organization.
Given these data limitations, and the many and varied reasons for
choosing a Part D plan, we do not believe we are in a position to make
a judgment about what is best for individual beneficiaries, and decline
to change the proposed regulations. However, we will make every effort
to ensure that beneficiaries and community organizations receive enough
information in time for them to determine the appropriate plan for the
beneficiary. The SEP provided for full-benefit dual eligible
individuals in the statute and in our final rule at Sec. 423.38(c)(4)
also ensures that they can change plans to better accommodate their
pharmaceutical needs and pharmacy affiliations.
Comment: One commenter recommended that we establish a bid process
whereby PDPs with an expected enrollment by full-benefit dual eligible
individuals that is higher than the proportion in the total Medicare
eligible population in the relevant PDP region
[[Page 4206]]
automatically qualify for inclusion in the auto-enrollment process. The
commenter further recommended that, if such a plan has a monthly
beneficiary premium above the low-income premium subsidy amount, we
should permit a ``waiver'' based on a subsidy or payment of that excess
premium by CMS or another entity in order to reduce the premium to an
amount equal to or below the low-income premium subsidy amount.
Response: Those plans available for purposes of auto-enrollment are
ones that have premiums at or below the low-income premium subsidy
amount. This includes fallback plans in areas where they exist. It is
our intent to implement the Part D program and adhere to the statute as
closely as possible, assuming tenable options are available to do so.
In the case of PDPs that serve a disproportionate share of full-benefit
dual eligible individuals, and whose premium exceeds the low-income
premium subsidy amount, we believe there are tenable options, that is,
other PDPs with premiums at or below the low-income premium subsidy
amount. However, we note that risk-adjustment should correct for the
higher costs incurred by plans with larger proportions of full-benefit
dual eligible individuals.
Comment: A few commenters recommended that we not limit the Part D
plans available for auto-enrollment to just those plans with premiums
below the low-income premium subsidy amount, as this limits full-
benefit dual eligible individuals to the ``lowest cost'' plans, which
may offer a less generous benefit. The commenters suggested that,
regardless of whether these individuals enroll on their own or are
auto-enrolled, they should be permitted to enroll in any plan and not
be charged any additional premium. At a minimum, a beneficiary's
medical provider could attest that a higher premium plan will better
meet his or her medical needs and therefore be allowed to enroll in a
higher premium plan without the added premium.
Response: We appreciate the commenters' concern that full-benefit
dual eligible individuals be able to enroll in the plan best suited for
them, not just ``low cost'' plans. We note that a full-benefit dual
eligible individual is free to enroll in any Part D plan during the
initial enrollment period or annual coordinated election period.
For auto-enrollment, however, section 1860D-1(b)(1)(C) of the Act
only permit us to, auto-enroll full-benefit dual eligible individuals
into those plans with premiums at or below the low-income premium
subsidy amount. In addition, those full-benefit dual eligible
individuals randomly auto-enrolled in a particular plan may still
choose another plan pursuant to a special enrollment period.
In addition, as we do not have the authority under section 1860D-
14(a)(1)(A) of the Act to increase the low-income premium subsidy
amount (as defined under section 1860D-14(b)(2)(B) of the Act), full-
benefit dual eligible individuals who elect to enroll in a plan with a
premium exceeding the low-income premium subsidy amount must pay the
difference in premium. We are also precluded under sections 1860D-
13(a)(1)(F) and 1854(c) of the Act from requiring or even permitting
Part D plans from waiving any premium in excess of the premium subsidy
amount, including allowing MA-PD plans to use rebate dollars to reduce
the premium only for this portion of their enrolled population.
Comment: We received numerous comments related to the timing of the
auto-enrollment process for full-benefit dual eligible individuals.
Commenters identified the possibility of a gap in coverage for some of
those individuals if the auto-enrollment did not occur until the close
of the Initial Enrollment Period on May 15, 2006, since Medicaid
coverage of Part D drugs ends several months earlier, on January 1,
2006. They proposed that we require auto-enrollment of these
individuals to be completed prior to Medicaid coverage ending on
December 31, 2005. Some commenters recommended that the process be
completed as early as November 15, 2005, and one commenter suggested
starting the 2005 Initial Enrollment Period for full-benefit dual
eligible individuals prior to November 15, 2005. Another commenter
recommended that auto-enrollment precede Part D eligibility by 6
months, and that Medicaid coverage of Part D drugs be continued until
auto-enrollment can be done.
Response: We did not intend to implement a process that would
create a gap in drug coverage for full-benefit dual eligible
individuals. We do not believe that the Congress intended for such a
gap to occur. Therefore, we will modify the final rule so that the
auto-enrollment of these individuals will begin as soon as Part D plans
with premiums at or below the low-income premium subsidy amount are
known prior to January 1, 2006. We will also modify the final rule to
provide that those full-benefit Medicaid individuals who become
eligible for Medicare after January 1, 2006, will be enrolled as soon
as their Medicare Part D eligibility is determined. For the suggestion
to start the 2005 Initial Enrollment Period for full-benefit dual
eligible individuals before November 15, 2005, we are precluded from
doing so, as this date is explicitly identified in section 1860D-
1(b)(2)(A) of the Act as the date upon which enrollment in Part D may
commence.
Comment: Many other commenters suggested that we delay
implementation of the Part D program for full-benefit dual eligible
individuals by at least five or six months, and some recommended a
year's delay, although the commenters recognized that such a delay
would require a legislative change. The commenters' concern was based
on the limited time to transition drug coverage for these full-benefit
dual eligible individuals from Medicaid to Medicare. The commenters
expressed concern about the feasibility of identifying, educating, and
enrolling the population of full-benefit dual eligible individuals in
time for a smooth transition of drug coverage. Some commenters
highlighted the need to ensure adequate time for physicians and
patients to navigate administrative barriers and change medications to
comply with formularies. One commenter suggested Medicare beneficiaries
who currently participate in Medicaid buy-in programs (that is,
qualified Medicare beneficiaries (QMB), special low-income
beneficiaries (SLMB), and qualified individuals (QI1)) be permitted to
keep Medicaid drug coverage after Part D starts.
A few commenters recommended that, assuming Part D coverage begins
for full-benefit dual eligible individuals on January 1, 2006, Medicaid
coverage of Part D drugs be extended past December 31, 2005, and
continued until such time as full-benefit dual eligible individuals are
enrolled in Part D.
One commenter recommended that full-benefit dual eligible
individuals who are American Indians or Alaska Natives (AI/AN) be
exempt from Part D and continue to be eligible for Medicaid drug
coverage after January 1, 2006. The commenter argued that this would
prevent loss of revenues to pharmacies operated by Indian Health
Services (IHS), Tribal Clinics, and Urban Indian Clinics, who may
receive lower payments from Part D plans than they currently receive
from Medicaid, and eliminate barriers for this population.
Response: As the commenters correctly point out, a delay in the
implementation of the Part D program, including auto-enrollment for
full-benefit dual eligible individuals would require a change to the
statute. Similarly, extending Medicaid coverage of prescription drugs
covered under Part D would also require a legislative
[[Page 4207]]
change. Absent such changes, we cannot delay implementation, extend
Medicaid coverage of Part D drugs, nor can we exclude full-benefit dual
eligible individuals who are AI/AN, or participants in Medicaid buy-in
programs from Part D.
Comment: A couple of commenters requested clarification about the
circumstances under which a beneficiary may affirmatively decline
participation in Part D. They expressed concern that individuals with
diminished mental faculties may not fully understand the impact of
their decision, and that States would likely bear additional costs
associated with full-benefit dual eligible individuals whose health
deteriorates due to their failure to take necessary medications. One
commenter urged that States be able to obtain FFP to provide
prescription drug coverage in these instances. Another commenter
asserted that permitting a full-benefit dual eligible individual to
affirmatively decline enrollment in Part D contradicts numerous
statutory and regulatory provisions that require this population's
enrollment in Part D. One commenter urged CMS to make disenrollment
contingent upon selection of another Part D plan to ensure there is no
lapse in coverage. Finally, one commenter suggested expanding the
ability to affirmatively decline enrollment in Part D to Medicare
beneficiaries who are not auto-enrolled.
Response: The Congress specified that prescription drug coverage
under this program is voluntary, and section 1860D-1(b)(1)(C) of the
Act specifically stipulates that auto-enrollment does not prevent a
full-benefit dual eligible individual from declining or changing such
enrollment. Absent any legislative change, we cannot intervene with an
individual's right to decline coverage. Nor can we adopt the suggestion
to permit Federal financial participation (FFP) for State Medicaid
agencies that choose to provide drug coverage for full-benefit dual
eligible individuals who affirmatively decline auto-enrollment. Section
1935(d)(1) of the Act stipulates that no FFP is available for any Part
D drugs or cost-sharing for Part D drugs for full-benefit dual eligible
individuals who are eligible for Part D, even if they are not enrolled
in a Part D plan. However, we will be making every effort to ensure
that beneficiaries and community organizations have sufficient
information to assist individuals in making the most appropriate
choices about participating in Part D.
Concerning the comment that we should make disenrollment from a
Part D plan contingent upon enrolling in another Part D plan to prevent
a coverage gap for full-benefit dual eligibles, we decline to do so in
regulation, but will continue to work develop strategies to prevent a
coverage gap in this instance.
We decline to expand the ability to affirmatively decline Part D
enrollment to individuals who are not auto-enrolled or for whom we do
not facilitate enrollment into a Part D plan. This population is
comprised of those who are not deemed or determined eligible for the
low-income subsidy. If these individuals do not want Part D coverage,
they can simply choose not to enroll in a Part D plan.
Comment: One commenter suggested that there should be flexibility
for CMS to change the plan into which a beneficiary has been auto-
enrolled should the plan no longer meet the needs of the enrollee.
Response: We agree that it would be prudent to retain the
flexibility to enroll an individual in subsequent years in a different
plan from the one into which we originally enrolled the individual, and
have modified the final rule to provide for this. We note that this
will require an exception to the maintenance of enrollment provision in
Sec. 423.32(e), so we have modified the final rule to provide for one.
We envision this may only be necessary in certain limited
circumstances. For example, we may want to consider doing this if the
plan's premium in a subsequent year exceeded the low-income premium
subsidy amount. We will ensure that beneficiaries are fully notified,
and have the option to remain in their original plan. We will examine
the need for this as the program evolves and provide operational
guidance should we implement it.
Comment: A number of commenters responded to our request in the
preamble for solutions to an inherent conflict in the statute. In this
instance, the statute requires auto-enrollment of full-benefit dual
eligible individuals into a Part D plan with a premium at or below the
low-income premium subsidy amount. Section 423.34(d) of the proposed
rule stipulated that those in an MA-only plan would be auto-enrolled
into an MA-PD plan in the same organization that has a premium that
does not exceed the low-income premium subsidy amount. However, there
may be instances in which an individual is enrolled in an MA-only plan
offered by an MA organization, and all the MA-PD plans in that
organizations have premiums that exceed the low-income premium subsidy
amount.
We note that most MA enrollees will be deemed to be enrolled into
an MA-PD plan in accordance with Sec. 422.66(e)(2) and (e)(3).
However, deeming does not address those who elect an MA-only plan that
does not offer any drug coverage in 2005, nor qualified prescription
drug coverage thereafter.
Several commenters supported auto-enrolling these full-benefit dual
eligible individuals into an MA-PD plan offered by the same
organization with the lowest Part D premium, even if it was higher than
the low-income premium subsidy amount. This would provide seamless
continuation of their Medicare benefits through the same organization.
Commenters noted that these individuals retain the right to decline
Part D coverage, and have a SEP that permits them to change PDPs or MA-
PD plans at any time.
One commenter noted that excluding full-benefit duals from auto-
enrollment in an MA-PD plan with a premium higher than the low-income
premium subsidy amount would give those MA plans an unfair advantage by
removing from their risk pool full-benefit dual eligible individuals,
who tend to have higher drug utilization.
Response: We agree with commenters' concerns about ensuring
continuity of care through the same MA organization, if possible.
However, as we discussed in the preamble to the proposed regulation,
there is an inherent statutory conflict that would seem to preclude
using auto-enrollment authority to accomplish this. Section 1860D-
1(b)(1)(C) of the Act directs the Secretary to auto-enroll full-benefit
dual eligible individuals who do not enroll in a PDP or MA-PD plan on a
random basis into a PDP with a premium at or below the low-income
premium subsidy amount; it does not identify an MA-PD plan as an entity
into which an individual could be auto-enrolled.
General principles of statutory interpretation requires us to
reconcile two seemingly conflicting statutory provisions rather than
allowing one provision to effectively nullify the other provision. We
had proposed to resolve this by interpreting the reference to
``prescription drug plans'' in section 1860D-1(b)(1)(C) of the Act as
including both PDPs and MA-PD plans, thereby allowing auto-enrollment
of an MA full-benefit dual eligible individual into an MA-PD offered by
the same organization offering his or her MA plan if the premium for
such plan did not exceed the low-income premium subsidy amount.
[[Page 4208]]
Upon further consideration, we believe there continue to be legal
concerns as to whether we have the authority to auto-enroll full-
benefit dual eligible individuals into an MA-PD plan. Rather than rely
on auto-enrollment authority under section 1860D-1(b)(1)(C) of the Act
to ensure continuity of Part D coverage for full-benefit dual eligible
individuals enrolled in MA-only plans, we instead will rely on our
general authority to establish enrollment procedures under section
1860D-1(b)(1)(A) of the Act to establish a facilitated enrollment
process that substantially fulfills the intent of ensuring no
prescription drug coverage gap for these individuals.
We will therefore facilitate enrollment into Part D for full-
benefit dual eligible individuals enrolled in a MA plan that does not
offer qualified prescription drug coverage by assigning them to an MA-
PD plan with the lowest premium offered by the same MA organization,
even if the plan's MA monthly prescription drug beneficiary premium
exceeds the low income premium subsidy amount. We will inform them in
advance of this assignment. If the beneficiary fails to affirmatively
elect an alternative plan or declines enrollment in Part D, she or he
will be enrolled into the plan into which she or he has been assigned.
In this instance, a beneficiary's silence would be deemed consent to
the enrollment choice we are making on their behalf. We note that the
right to affirmatively decline in Sec. 423.34(e), on affirmatively
declining Part D enrollment, and the Special Enrollment Period in Sec.
423.38(c)(4), apply equally to all full-benefit dual eligibles, whether
they are auto-enrolled or have their enrollment facilitated.
In the case of a full-benefit dual eligible for whom we facilitate
enrollment into an MA-PD plan with a premium higher than the low-income
premium subsidy amount, we acknowledge that this creates a new
financial obligation for the enrollee to pay the balance of the monthly
MA monthly prescription drug beneficiary premium not covered by the
low-income premium subsidy amount. However, this option best preserves
informed enrollee choice, is consistent with statutory intent, respects
the beneficiary's initial choice to enroll in an MA plan, and ensures
continuity of prescription drug coverage. These individuals will have
information about other plan choices available and retain their right
to a Special Enrollment Period to choose another plan at any time, as
provided by section 1861D-1(b)(3) of the Act for PDPs, and section
1851(e)(4)(D) of the Act and section 30.4.4-5 of Chapter 2 of the
Medicare Managed Care Manual for MA-PD plans.
Comment: A few commenters generally supported auto-enrolling full-
benefit dual eligible individuals into an MA-PD plan, but urged CMS to
find a solution that would ensure no additional costs were imposed on
beneficiaries. Some of the commenters that supported auto-enrollment
into the MA-PD plan with the lowest Part D premium provided suggestions
as to how to minimize the financial impact on beneficiaries. A few
suggested that for those who are institutionalized, the excess premium
should be considered an incurred medical expense and deducted from
their monthly share of cost to the facility. For non-institutionalized
beneficiaries, in States with State Pharmacy Assistance Programs
(SPAPs), SPAPs should be allowed to pay the balance. For full-benefit
dual eligible individuals who are medically needy, the balance should
be considered an incurred medical expense contributing towards their
spend-down. Otherwise, individuals should be counseled about the
premium discrepancy and about the right to disenroll from an MA plan
and enroll in Original Medicare with a PDP.
Response: We appreciate these suggestions for minimizing the
financial impact on beneficiaries. We intend to highlight the impact of
our facilitating enrollment into an MA-PD plan with a premium higher
than the low-income premium subsidy amount to these beneficiaries and
advise them of their ability to switch plans. We note that under
Medicaid, whatever portion of the premium the individual pays would be
an incurred medical expense, including any portion of the premium that
is paid by the SPAP. Since incurred medical expenses are deducted from
income when determining patient liability for an institutionalized
individual, and are deducted from income for medically needy spend-down
purposes, the commenter's suggestions correctly characterize how
Medicaid would treat any premium difference paid by the individual. The
commenter is also correct in noting that SPAPs will be allowed to pay
the balance for their enrollees, but we note this is an option for all
enrollees of an SPAP, not just non-institutionalized enrollees. Since
these options are already permitted under the regulatory language in
the proposed rule, we will not modify the regulation further to specify
them.
Comment: One commenter suggested that we permit MA-PD plans to
waive the portion of their premium above the low-income premium subsidy
amount. The commenter suggested that explicit authorization by CMS
would be a contract amendment, not an inducement to a beneficiary to
enroll, which would ensure that the waiver of the excess premium does
not implicate the Federal anti-kickback rules or be considered
disparate treatment.
Response: We appreciate the intent of the commenter's suggestion.
However, we are precluded from permitting MA-PD plans to waive a
portion of the Part D premium for a subset of their enrollees by
section 1854(c) of the Act, which requires uniform premiums for all
enrollees of an MA plan.
Comment: A few commenters urged CMS to prohibit auto-enrollment of
full-benefit dual eligible individuals into MA-PD plans. Instead, these
MA enrollees should be auto-enrolled into a PDP for their Part D
benefit. The commenters note that these beneficiaries could always
switch to an MA-PD plan.
Response: Section 1861D-1(a)(1)(B)(ii) of the Act specifies that,
with limited exceptions, individuals in an MA plan may not also enroll
in a PDP. The only exceptions are those enrolled in a MSA plan, or in a
MA private fee-for-service plan or cost-based HMO or CMP that does not
offer qualified prescription drug coverage, may enroll in a PDP. Thus,
auto-enrolling these individuals into a PDP would require us to also
disenroll them from their MA plan, which could be inconsistent with our
current MA requirements Sec. 422.66(e), which provide that an
individual who elects an MA plan is considered to have continued to
have made that election until he or she voluntarily changes that
election, or the plan is discontinued or no longer serves the service
area.
Comment: Finally, one commenter suggested that if no MA-PD plan is
available, or if the Part D premium of the available MA-PD plan exceeds
the low-income premium subsidy amount, CMS should auto-enroll these
beneficiaries into another organization's MA-PD plan whose premium does
not exceed the low-income premium subsidy amount.
Response: For the concern that no MA-PD plan would be available, we
note that section 1860D-21(a) of the Act requires all MA organizations
to offer at least one MA-PD plan.
Involuntarily disenrolling the individual from his or her MA plan,
and auto-enrolling him or her into another MA-PD plan offered by
another MA organization, is inconsistent with MA requirements at Sec.
422.66(e) described above.
Comment: A few commenters urged expanding Part D auto-enrollment in
the
[[Page 4209]]
case of full-benefit dual eligible individuals who are in an
organization's Medicaid managed care product, but currently receive
Part A and B benefits through Original Medicare. Specifically, the
commenters recommended that these beneficiaries be auto-enrolled into
an MA-PD plan that is offered under common ownership and control of the
organization offering the Medicaid managed care plan.
Response: Please refer to responses to comments on Sec. 422.66(d)
in Title II of the final regulation for a discussion on this issue.
Comment: A few commenters proposed that, where a full-benefit dual
eligible individual in Original Medicare will be auto-enrolled into a
PDP that is affiliated with an MA Special Needs Plan, CMS auto-enroll
the individual into the MA Special Needs Plan for their Part A and B
benefits, as a way to promote better overall coordination of care. To
preserve the beneficiary choice, the commenter suggested the regulation
provide an opportunity for the individual to ``opt out'' within some
specified period of time (for example, 90 days).
Response: The statute prohibits beneficiaries who have Part D
coverage through a PDP from getting their Medicare A and B coverage
through an MA-only plan. As a result, we decline to make the suggested
change.
Comment: One commenter asked CMS to clarify that, if a full-benefit
dual eligible individual is auto-enrolled into an MA-PD plan with a
premium higher than the low-income premium subsidy amount, that the
State Medicaid program would not be obliged to pay the balance on
behalf of the beneficiary.
Response: We confirm that the State Medicaid agency has no
obligation to pay any Part D premium in excess of the low-income
premium subsidy amount. Further, section 1905(a) of the Act, which
provides Federal medical assistance for Medicare cost-sharing (as
defined in section 1905(p)(3)(A) of the Act), does not include Part D
premiums.
Comment: A few commenters recommended that we consider establishing
a process for automatically enrolling or at least facilitating the
enrollment into Part D plans all individuals deemed eligible for the
full low-income subsidy. In effect, this would expand auto-enrollment
to individuals in Medicare Savings Programs. These are individuals for
whom State Medicaid agencies pay for Medicare cost sharing, but who are
not eligible for comprehensive Medicaid benefits and thus are not
considered full-benefit dual eligible individuals. They include QMB,
SLMB, and QI1. To the extent that we accept this recommendation, the
commenters suggested we also broaden the SEP provision to cover any
full subsidy eligible individual who is auto-enrolled in a Part D Plan.
A few commenters advocated expanding auto-enrollment even further
to all those who receive the low-income subsidy. This would include not
only those deemed eligible for the subsidy, but also those who have to
apply and be determined eligible. Auto-enrollment would ensure that
these individuals are not subject to a late enrollment penalty.
Response: We agree that there are compelling reasons to promote
Part D enrollment of all individuals deemed or determined eligible for
the low-income subsidy. These individuals typically are less healthy
and often face barriers to care. Effective medication management and
prescription drug coverage can lead to reduced inpatient hospital
expenditures, making it more cost-effective to provide drug coverage.
Facilitating enrollment into Part D would promote access to drug
coverage for these beneficiaries by ensuring that they have drug
coverage starting in 2006, while also preserving the voluntary nature
of enrollment in Part D. Doing so would also ensure that beneficiaries
with limited means would not be liable for a late enrollment penalty
for failing to enroll in Part D when first eligible.
We intend to pursue many steps to assist beneficiaries,
particularly low-income beneficiaries, in taking advantage of the new
Medicare drug coverage. Such steps could include facilitating
enrollment into Part D for those beneficiaries. We will provide details
in operational guidance to be issued shortly after the publication of
the final regulation, including details on the population for whom we
will facilitate enrollment. By facilitating enrollment, we mean giving
beneficiaries an opportunity to choose a Part D plan first; if they do
not choose, we would notify them that we intend to facilitate their
enrollment into a specific plan prospectively. If the beneficiary fails
to affirmatively elect an alternative plan or declines enrollment in
Part D by a given date, she or he would be enrolled into the plan into
which she or he has been assigned. In this instance, a beneficiary's
silence would be deemed consent to the enrollment choice we are making
on their behalf. If we facilitate enrollment in this manner, we would
likely follow rules for assigning beneficiaries to Part D plans similar
to those for the auto-enrollment and facilitated enrollment process for
full-benefit dual eligibles: MA enrollees would be enrolled into an MA-
PD plan with the lowest Part D premium; Original Medicare beneficiaries
would be enrolled in a PDP with a Part D premium that does not exceed
the low-income premium subsidy amount, and, if there is more than one
such PDP available, the individual would be randomly enrolled into one
of the plans available. In establishing a process for this facilitated
enrollment, we would rely upon discretion afforded the Secretary under
section 1860D-1(b)(1)(A) of the Act to establish enrollment processes
for Part D eligible individuals. Similarly, we would extend some of the
same protections afforded the full-benefit dual eligible population who
are auto-enrolled to those whose enrollment we facilitate. These
protections would include a Special Enrollment Period, the right to
affirmatively decline Part D enrollment, and where possible,
facilitating enrollment into plans whose premiums do not exceed the
low-income premium subsidy amount.
Comment: One commenter suggested expanding auto-enrollment to PACE
enrollees, that is, CMS auto-enroll them into their PACE organization
for purposes of Part D coverage effective January 1, 2006, unless the
PACE enrollee makes another enrollment choice. PACE organizations would
provide their enrollees an opportunity to opt out of enrollment in Part
D (and, as a result, out of the PACE organization).
Response: We agree that PACE enrollees should not be required to
take any additional steps to obtain their Part D benefit through their
PACE organization. Individuals who enroll in a PACE organization elect
to get all their Medicaid (if eligible for Medicaid) and Medicare
benefits through the PACE organization. As noted in response to a
similar comment on Sec. 423.32 of the final regulation, we will modify
the final regulation to deem individuals enrolled in a PACE
organization as of December 31, 2005 to be enrolled with that PACE
organization for their Part D benefit as of January 1, 2006. This
precludes the need to expand auto-enrollment to PACE enrollees, so we
decline to make that change.
Comment: One commenter noted that no provision was made for auto-
enrollment of full-benefit dual eligible individuals enrolled in
Medicare cost-based HMO or CMPs. The commenter suggested that for full-
benefit dual eligible individuals enrolled in a cost-based HMO or CMP,
CMS auto-enroll these individuals into the cost-based HMO or CMP for
Part D benefits if the cost-based HMO or CMP offers Part D,
[[Page 4210]]
even if the Part D premium is higher than the low-income premium
subsidy amount. If the cost-based HMO or CMP does not offer Part D
benefits, the commenter recommends auto-enrolling the beneficiary into
a PDP.
Response: We agree that we should ensure that full-benefit dual
eligible individuals, and potentially others eligible for the low-
income subsidy who are enrollees of a cost-based HMO or CMP obtain Part
D benefits. As noted in response to a similar comment on Sec. 423.32
of the final regulation, we will modify the final regulation to specify
that all individuals enrolled in a cost-based HMO or CMP that offers
any prescription drug coverage as of December 31, 2005, will be deemed
to be enrolled in the cost-based HMO or CMP for Part D benefits as of
January 1, 2006, if the cost-based HMO or CMP opts to provide Part D
benefits, and regardless of whether the Part D premium exceeds the low-
income subsidy amount.
We believe the same legal concerns noted above for auto-enrolling
full-benefit dual eligible individuals into MA-PD plans arise for auto-
enrolling them into a cost plan HMO or CMP. As a result, we decline to
expand auto-enrollment a suggested by this commenter. Instead, we will
use a facilitated enrollment process discussed above to accomplish
substantially the same end. We will facilitate the enrollment of full-
benefit dual eligible individuals enrolled in a cost plan HMO or CMP
that offers Part D benefits and who fail to enroll in a Part D plan
into the Part D benefits offered by their cost plan HMO or CMP. If the
cost plan HMO or CMP does not offer Part D benefits, the individual
will be enrolled in a PDP. We may similarly facilitate the enrollment
of other cost plan enrollees eligible for the low-income subsidy who
fail to elect a Part D plan into the Part D benefit offered by their
cost plans.
Comment: One commenter requested clarification as to whether auto-
enrollment into a PDP will only occur for Medicare beneficiaries who
receive comprehensive health care benefits (full hospital and physician
services) from both Medicare and Medicaid, or whether auto-enrollment
also applies to Medicare beneficiaries that receive pharmacy-only
benefits through Medicaid.
Response: The final rule will limit auto-enrollment to only those
dual eligible individuals who receive comprehensive health benefits
from both Medicare and Medicaid. As noted above, we may facilitate
enrollment of all others deemed or determined eligible for the low-
income subsidy into Part D plans. To the extent that a Medicare
beneficiary with pharmacy-only Medicaid benefits is in the population
whose enrollment we facilitate, we would facilitate that individual's
enrollment into a Part D plan.
Comment: One commenter recommended that we explore auto-enrolling
residents of long term care facilities who are not full-benefit dual
eligible individuals, and permitting these beneficiaries to disenroll
or choose another Part D plan. The commenter was especially concerned
about residents who lack the cognitive capacity to select a PDP and who
do not have a designated surrogate decision-maker in place.
Response: Generally, enrollment in Part D is voluntary. Section
1860D-1(b)(1)(C) of the Act provides for auto-enrollment of full-
benefit dual eligible individuals. As noted above, we may facilitate
enrollment of others deemed or otherwise determined eligible for the
low-income subsidy into Part D plans. To the extent that a resident of
a long term care facility is in the population whose enrollment we
facilitate, we would facilitate that individual's enrollment into a
Part D plan.
Since the Act limits auto-enrollment to full-benefit dual eligible
individuals, we decline to auto-enroll long-term care residents who do
not receive the low-income subsidy. While we acknowledge that access to
prescription drug coverage is critical for this population, we believe
they generally have the resources and support to make timely enrollment
decisions. We will, however, continue to explore options regarding
enrollment for all individuals in long-term care facilities.
Comment: A number of commenters urged CMS to permit SPAPs to act as
authorized representatives and enroll some or all of the beneficiaries
they serve into the SPAP's preferred PDP. These beneficiaries should be
permitted to decline enrollment in the SPAP's preferred PDP or to
c