Medicare Program; Contract Year 2021 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, and Medicare Cost Plan Program

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 417, 422, and 423

[CMS-4190-F]

RIN 0938-AT97

Medicare Program; Contract Year 2021 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, and Medicare Cost Plan Program

AGENCY:

Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (HHS).

ACTION:

Final rule.

SUMMARY:

This final rule will revise regulations for the Medicare Advantage (MA or Part C) program, Medicare Prescription Drug Benefit (Part D) program, and Medicare Cost Plan program to implement certain sections of the Bipartisan Budget Act of 2018 and the 21st Century Cures Act. In addition, it will enhance the Part C and D programs, codify several existing CMS policies, and implement other technical changes.

DATES:

Effective Date:

These regulations are effective August 3, 2020.

Applicability Dates:

Except for §§ 422.166(a)(2)(i), 423.186(a)(2)(i), and 422.514(d)(1) and (2), the provisions in this rule are applicable beginning January 1, 2021. The changes to §§ 422.166(a)(2)(i) and 423.186(a)(2)(i) are applicable beginning January 1, 2022. The provisions of § 422.514(d)(1), are applicable beginning January 1, 2022. The provisions of § 422.514(d)(2) are applicable beginning January 1, 2023.

FOR FURTHER INFORMATION CONTACT:

Theresa Wachter, (410) 786-1157, or Cali Diehl, (410) 786-4053—General Questions.

Kimberlee Levin, (410) 786-2549—Part C Issues.

Lucia Patrone, (410) 786-8621—Part D Issues.

Kristy Nishimoto, (206) 615-2367—Beneficiary Enrollment and Appeals Issues.

Stacy Davis, (410) 786-7813—Part C and D Payment Issues.

Melissa Seeley, (212) 616-2329—D-SNP Issues.

SUPPLEMENTARY INFORMATION:

CMS intends to address all of the remaining proposals from the February 2020 proposed rule in subsequent rulemaking. Therefore, CMS plans to make any provisions adopted in the subsequent, second final rule, although effective on or before January 1, 2021, applicable no earlier than January 1, 2022. Notwithstanding the foregoing, for proposals from the February 2020 proposed rule that would codify statutory requirements that are already in effect, CMS reminds readers and plan sponsors that the statutory provisions apply and will continue to be enforced. Similarly, for the proposals from the February 2020 proposed rule that would implement the statutory requirements in sections 2007 and 2008 of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act (hereinafter referred to as the SUPPORT Act), CMS intends to implement these statutes consistent with their effective provisions.

I. Executive Summary and Background

A. Executive Summary

1. Purpose

The primary purpose of this final rule is to implement certain sections of the following federal laws related to the Medicare Advantage (MA or Part C) and Prescription Drug Benefit (Part D) programs before the contract year 2021 MA plan bids (due by statute on the first Monday in June):

• The Bipartisan Budget Act of 2018 (hereinafter referred to as the BBA of 2018)

• The 21st Century Cures Act (hereinafter referred to as the Cures Act)

The rule also includes a number of changes to strengthen and improve the Part C and D programs, codifies in regulation several CMS interpretive policies previously adopted through the annual Call Letter and other guidance documents, and implements other technical changes. We took a measured approach to review each provision proposed and focused finalizing in this first final rule those most helpful for bidding, those that address the Coronavirus Disease (COVID-19) pandemic and public health emergency, as well as those topics on which issuing a final rule now would advance the MA program.

While we intend to address the remaining proposals from the February 18, 2020, proposed rule (85 FR 9002) not included in this final rule in subsequent rulemaking, we are focusing in this final rule on more immediate regulatory actions. CMS plans to make any provisions adopted in the subsequent, second final rule, although effective on or before January 1, 2021, applicable no earlier than January 1, 2022. Notwithstanding the foregoing, for proposals from the February 2020 proposed rule that would codify statutory requirements that are already in effect,

1

CMS reminds readers and plan sponsors that the statutory provisions apply and will continue to be enforced. Similarly, for the proposals from the February 2020 proposed rule that would implement the statutory requirements in sections 2007 and 2008 of the SUPPORT Act, CMS intends to implement the statute consistent with its effective provisions.

1

These include the following BBA of 2018 provisions: Improvements to Care Management Requirements for Special Needs Plans (SNPs); Coverage Gap Discount Program Updates; and Part D Income Related Monthly Adjustment Amount (IRMAA) Calculation Update for Part D Premium Amounts.

2. Summary of the Major Provisions

a. Medicare Advantage (MA) Plan Options for End-Stage Renal Disease (ESRD) Beneficiaries (§§ 422.50, 422.52, and 422.110)

The Cures Act (Pub. L. 114-255) amended sections 1851, 1852, and 1853 of the Act to expand enrollment options for individuals with end stage renal disease (ESRD) and make associated payment and coverage changes to the MA and original Medicare programs. Specifically, since the beginning of the MA program, individuals with ESRD have not been able to enroll in MA plans subject to limited exceptions. Section 17006(a) of the Cures Act removed this prohibition effective for plan years beginning on or after January 1, 2021. We are codifying this change with revisions to §§ 422.50(a)(2), 422.52, and 422.110.

b. Medicare Fee-for-Service (FFS) Coverage of Costs for Kidney Acquisitions for Medicare Advantage (MA) Beneficiaries (§ 422.322)

With this new enrollment option, the Cures Act also made several payment changes in the MA and original Medicare FFS programs. Section 17006(c) of the Cures Act amended section 1852(a)(1)(B)(i) of the Act to exclude coverage for organ acquisitions for kidney transplants from the Medicare benefits an MA plan is required to cover for an MA enrollee, including as covered under section 1881(d) of the Act. Effective January 1, 2021, these costs will be covered under the original Medicare FFS program. Section 17006(c)(2) of the Cures Act also amended section 1851(i) of the Act, providing that CMS may pay an entity other than the MA organization that offers the plan in which the individual is enrolled for expenses for organ

acquisitions for kidney transplants described in section 1852(a)(1)(B)(i) of the Act. We are finalizing changes to our regulation at § 422.322 in accordance with these new statutory requirements.

c. Exclusion of Kidney Acquisition Costs From Medicare Advantage (MA) Benchmarks (§§ 422.258 and 422.306)

Consistent with how the original Medicare FFS program will cover costs of organ acquisitions for kidney transplants for individuals in an MA plan, section 17006(b) of the Cures Act also amended section 1853 of the Act to exclude these costs from the MA benchmarks used in determining payment to MA plans. Specifically, the Secretary, effective January 1, 2021, is required to exclude the estimate of standardized costs for payments for organ acquisitions for kidney transplants from MA benchmarks and capitation rates. We are finalizing changes to our regulations at §§ 422.258(d) and 422.306 in accordance with these new statutory requirements.

d. Medicare Advantage (MA) and Part D Prescription Drug Program Quality Rating System (§§ 422.162, 422.166, 423.182, and 423.186)

In the Medicare Program; Contract Year 2019 Policy and Technical Changes to the Medicare Advantage, Medicare Cost Plan, Medicare Fee-for-Service, the Medicare Prescription Drug Benefit Programs, and the PACE Program Final Rule (CMS-4182-F) (hereinafter referred to as the April 2018 final rule), we codified the methodology for the Star Ratings system for the MA and Part D programs, respectively, at §§ 422.160 through 422.166 and §§ 423.180 through 423.186. We have stated we will propose through rulemaking any changes to the methodology for calculating the ratings, the addition of new measures, and substantive measure changes.

At this time, we are finalizing the increased weight of patient experience/complaints and access measures from 2 to 4. We are also finalizing our proposal to directly remove outliers prior to calculating the cut points to further increase the predictability and stability of the Star Ratings system, but we are delaying the application of outlier deletion until the 2022 measurement year which coincides with the 2024 Star Ratings produced in October 2023. We are also finalizing removal of the Rheumatoid Arthritis Management measure. Finally, we are finalizing the update to the Part D Statin Use in Persons with Diabetes measure weighting category. Unless otherwise stated, data will be collected and performance measured using these rules and regulations for the 2021 measurement period and the 2023 Star Ratings. The remaining Star Ratings provisions of the proposed rule will be addressed later and, therefore, are not being finalized in this rule. Those provisions include codifying additional existing rules for calculating MA Quality Bonus Payments ratings, implementing updates to the Health Outcomes Survey measures, adding new Part C measures, clarifying the rules around consolidations when data are missing due to data integrity concerns, modifying the extreme and uncontrollable circumstance policy for multiple year-affected contracts and to clarify rules when data are missing due to data integrity concerns, and additional technical clarifications.

e. Medical Loss Ratio (MLR) (§§ 422.2420, 422.2440, and 423.2440)

We are finalizing our proposal to amend the MA medical loss ratio (MLR) regulation at § 422.2420 so that the incurred claims portion of the MLR numerator includes all amounts that an MA organization pays (including under capitation contracts) for covered services. Currently, incurred claims in the MLR numerator include direct claims paid to providers (including under capitation contracts with physicians) for covered services furnished to all enrollees under an MA contract. This amendment will also include in the incurred claims portion of the MLR numerator amounts paid for covered services to individuals or entities that do not meet the definition of “provider” as defined at § 422.2.

We are finalizing our proposal to codify in our regulations at §§ 422.2440 and 423.2440 the definitions of partial, full, and non-credibility and the credibility factors that CMS published in the May 2013 Medicare Program; Medical Loss Ratio Requirements for the Medicare Advantage and the Medicare Prescription Drug Benefit Programs Final Rule (78 FR 31284) (hereinafter referred to as the May 2013 Medicare MLR final rule). It is more consistent with the policy and principles articulated in Executive Order 13892 on Promoting the Rule of Law Through Transparency and Fairness in Civil Administrative Enforcement and Adjudication (October 9, 2019) that we codify these definitions and factors in the applicable regulations.

Additionally, we are finalizing our proposal to amend § 422.2440 to provide for the application of a deductible factor to the MLR calculation for MA medical savings account (MSA) contracts that receive a credibility adjustment. The deductible factor serves as a multiplier on the applicable credibility adjustment. This additional adjustment for MA MSAs is appropriate because the variability of claims experience is greater under health insurance policies with higher deductibles than under policies with lower deductibles, with high cost or outlier claims representing a larger portion of the overall claims experience of plans with high deductibles. This is the case because high-deductible health plan enrollees' medical expenses must exceed a higher threshold before the plan begins to incur claims costs that can be included in the MLR numerator. The deductible factor reduces the risk that an MSA contract will fail to meet the MLR requirement as a result of random variations in claims experience. We are finalizing our proposal to adopt the same deductible factors that apply under the commercial MLR regulations at 45 CFR part 158.

f. Medicare Advantage (MA) and Cost Plan Network Adequacy (§§ 417.416 and 422.116)

We are strengthening network adequacy rules for MA plans by codifying our existing network adequacy methodology and finalizing policies that address maximum time and distance standards in rural areas, telehealth, and Certificate of Need (CON) laws. The authorization of additional telehealth benefits pursuant to the BBA of 2018 incentivizes new ways for MA plans to cover beneficiary access to health care beginning in 2020. As a result, CMS has been examining its network adequacy standards overall to determine how contracted telehealth providers should be considered when evaluating the adequacy of an MA plan network. In order to expand access to MA plans where network development can be challenging, we are reducing the percentage of beneficiaries that must reside within the maximum time and distance standards in non-urban counties (Micro, Rural, and Counties with Extreme Access Considerations (CEAC) county type designations) from 90 percent to 85 percent in order for an MA plan to comply with network adequacy standards. Also, MA plans will be eligible to receive a 10-percentage point credit towards the percentage of beneficiaries residing within published time and distance standards when they contract with telehealth providers in the following provider specialty types: Dermatology, Psychiatry, Cardiology, Otolaryngology, Neurology, Ophthalmology, Allergy and Immunology, Nephrology, Primary Care,

Gynecology/OB/GYN, Endocrinology, and Infectious Diseases. Additionally, MA organizations may also receive a 10-percentage point credit towards the percentage of beneficiaries residing within published time and distance standards for affected provider and facility types in states that have CON laws, or other state imposed anti-competitive restrictions, that limit the number of providers or facilities in a county or state. We solicited comments from stakeholders on various aspects of our proposal, which informed the network adequacy methodology adopted in this final rule.

g. Special Election Periods (SEPs) for Exceptional Conditions (§§ 422.62, 422.68, 423.38, and 423.40)

Sections 1851(e)(4) and 1860D-1(b)(3) of the Act establish special election periods (SEPs) during which, if certain circumstances exist, an individual may request enrollment in, or disenrollment from, MA and Part D plans. The Secretary also has the authority to create SEPs for individuals who meet other exceptional conditions. We are codifying a number of SEPs that we have adopted and implemented through subregulatory guidance as exceptional circumstances SEPs. Codifying our current policy for these SEPs provides transparency and stability to the MA and Part D programs by ensuring that these SEPs are known and changed only through additional rulemaking. Among the finalized SEPs are the SEP for Government Entity-Declared Disaster or Other Emergency, the SEP for Employer/Union Group Health Plan (EGHP) elections, and the SEP for Individuals Who Disenroll in Connection with a CMS Sanction. We are also establishing two additional SEPs for exceptional circumstances: The SEP for Individuals Enrolled in a Plan Placed in Receivership and the SEP for Individuals Enrolled in a Plan that has been identified by CMS as a Consistent Poor Performer.

3. Summary of Costs and Benefits

Provision

Description

Impact

Medicare Advantage (MA) Plan Options for End-Stage Renal Disease (ESRD) Beneficiaries (§§ 422.50, 422.52, and 422.110)

CMS is codifying requirements under section 17006 of the Cures Act. Effective for the plan year beginning January 1, 2021, CMS is removing the prohibition on beneficiaries with ESRD enrolling in an MA plan

To estimate the impact, we used a pre-statute baseline. The analysis shows that removing the prohibition for ESRD beneficiaries to enroll in MA plans results in net costs to the Medicare Trust Funds ranging from $23 million in 2021 to $440 million in 2030.

Medicare Fee-for-Service (FFS) Coverage of Costs for Kidney Acquisitions for Medicare Advantage (MA) Beneficiaries (§ 422.322)

CMS is codifying requirements under section 17006 of the Cures Act. Effective for the plan year beginning January 1, 2021, CMS is finalizing that MA organizations will no longer be responsible for costs for organ acquisitions for kidney transplants for their beneficiaries. Instead, Medicare FFS will cover the kidney acquisition costs for MA beneficiaries, effective 2021

To estimate the impact, we used a pre-statute baseline. This analysis shows that FFS coverage of kidney acquisition costs for MA beneficiaries results in net costs to the Medicare Trust Funds ranging from $212 million in 2021 to $981 million in 2030.

Exclusion of Kidney Acquisition Costs from Medicare Advantage (MA) Benchmarks (§§ 422.258 and 422.306)

CMS is codifying requirements under section 17006 of the Cures Act. Effective for the plan year beginning January 1, 2021, CMS is removing costs for organ acquisitions for kidney transplants from the calculation of MA benchmarks and annual capitation rates

To estimate the impact, we used a pre-statute baseline. This analysis shows that excluding kidney acquisition costs from MA benchmarks results in net savings estimated to range from $594 million in 2021 to $1,346 million in 2030.

Medicare Advantage (MA) and Part D Prescription Drug Program Quality Rating System (§§ 422.162, 422.166, 423.182, and 423.186)

CMS is finalizing an increase in the weight of patient experience/complaints and access measures. CMS is also finalizing the use of Tukey outlier deletion, which is a standard statistical methodology for removing outliers, to increase the stability and predictability of the star measure cut points. However, the application of Tukey outlier deletion will be delayed until the 2024 Star Ratings

Updating the patient experience/complaints and access measures weight creates a cost which is offset after the first year by using the Tukey outlier deletion. The net cost to the Medicare Trust Fund from the increased weight is $345.1 million in 2024; the net savings from both the increased weight and Tukey outlier deletion will grow over time reaching $999.4 million by 2030. The net reduction in spending to the Medicare Trust Fund through and including 2030 is $4.1 billion.

Medical Loss Ratio (MLR) (§§ 422.2420, 422.2440, and 423.2440)

CMS is finalizing our three proposed amendments to the Medicare MLR regulations. (1) We will allow MA organizations to include in the MLR numerator as “incurred claims” all amounts paid for covered services, including amounts paid to individuals or entities that do not meet the definition of “provider” at § 422.2. (2) We also are codifying our definitions of partial, full, and non-credibility and credibility factors that CMS published in the May 2013 Medicare MLR final rule (78 FR 31296) for MA and Part D MLRs. (3) We are finalizing our proposal to apply a deductible factor to the MLR calculation for MA MSA contracts receiving a credibility adjustment. The deductible factor, which functions as a multiplier on the credibility adjustment factor, is calibrated so that the probability that a contract will fail to meet the MLR requirement is the same for all contracts that receive a credibility adjustment, regardless of the deductible level

(1) Our change to the type of expenditures that can be included in “incurred claims” will have neutral dollar impact on the Medicare Trust Fund. These provisions will result in a transfer of funds from the Treasury, through the Medicare Trust Fund, to MA organizations. This transfer will take the form of a reduction in the remittance amounts withheld from MA capitated payments. The amount of this transfer is $35 to $55 million a year, resulting in plans obtaining $455 million over 10 years.

(2) Codifying the definitions of partial, full, and non-credibility and the credibility factors is unlikely to have any impact on the Medicare Trust Fund.

(3) The deductible factor to the MLR calculation for MA MSA contracts is estimated to result in a gradually increasing cost to the Medicare Trust Fund of $1 to $6 million per year, arising from the Trust Fund paying for benefits due to expected increased enrollment, and will result in a $40 million cost through, and including, 2030.

Medicare Advantage (MA) and Cost Plan Network Adequacy (§§ 417.416 and 422.116)

CMS is—(1) strengthening network adequacy rules for MA and cost plans and to make them more transparent to plans by codifying our existing network adequacy methodology and standards, with some modifications; (2) allowing MA plans to receive a 10-percentage point credit towards the percentage of beneficiaries residing within published time and distance standards when they contract with certain telehealth providers; (3) allowing MA organizations to receive a 10-percentage point credit towards the percentage of beneficiaries residing within published time and distance standards for affected provider and facility types in states that have CON laws, or other state imposed anti-competitive restrictions, that limit the number of providers or facilities in a county or state where CMS has not already customized the standards for that area; and (4) reducing the required percentage of beneficiaries residing within maximum time and distance standards in certain county types (Micro, Rural, and CEAC)

Changes to network standards are unlikely to have any impact on the Medicare Trust Fund.

Special Election Periods (SEPs) for Exceptional Conditions (§§ 422.62, 422.68, 423.38, and 423.40)

CMS is codifying a number of SEPs adopted and implemented through subregulatory guidance as exceptional circumstances SEPs. CMS is also establishing two new SEPs for exceptional circumstances: The SEP for Individuals Enrolled in a Plan Placed in Receivership and the SEP for Individuals Enrolled in a Plan that has been identified by CMS as a Consistent Poor Performer

This provision codifies existing practice since MA organizations and Part D plan sponsors are currently assessing applicants' eligibility for election periods as part of existing enrollment processes. Consequently, the provision will not have added impact.

B. Background

We received approximately 490 timely pieces of correspondence containing multiple comments on the provisions implemented within this final rule from the proposed rule titled “Medicare and Medicaid Programs; Contract Year 2021 and 2022 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicaid Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly” which published February 18, 2020, in the

Federal Register

(85 FR 9002). Comments were submitted by MA health plans, Part D sponsors, MA and beneficiary advocacy groups, trade associations, providers, pharmacies and drug companies, states, telehealth and health technology organizations, policy research organizations, actuarial and law firms, MACPAC, MedPAC, and other vendor and professional associations.

The proposals we are finalizing in this final rule range from minor clarifications to more significant modifications based the comments received. As noted previously, we intend to address the proposals from the February 2020 proposed rule that are not included in this final rule in subsequent rulemaking. Summaries of the public comments received and our responses to those public comments are set forth in the various sections of this final rule under the appropriate headings. We also note that some of the public comments received for the provisions implemented in this final rule were outside of the scope of the proposed rule. For example, we received comments about how much MA organizations pay network providers, and comments that recommend CMS adopt completely new Star Ratings measures or change HEDIS

measures during the COVID-19 pandemic. CMS did not make any proposals in the February 2020 proposed rule on these topics, and as such, those out-of-scope public comments are not addressed in this final rule. However, we note that in this final rule we are not addressing comments received with respect to the other provisions of the February 2020 proposed rule that we are not finalizing at this time. Rather, we will address these comments in subsequent rulemaking, as appropriate.

II. Implementation of Certain Provisions of the Bipartisan Budget Act of 2018

A. Special Supplemental Benefits for the Chronically Ill (SSBCI) (§ 422.102)

The BBA of 2018 (Pub. L. 115-123) was signed into law on February 9, 2018. The law included new authorities concerning supplemental benefits that may be offered to chronically ill enrollees in Medicare Advantage (MA) plans, specifically amending section 1852(a)(3) of the Act to add a new subparagraph (D) authorizing a new category of supplemental benefits that may be offered by MA plans. We discussed this new authority in the April 2018 final rule (83 FR 16481 through 16483).

2

We proposed to codify the existing guidance (April 2019 Health Plan Management System (HPMS) Memo

3

and the 2020 Call Letter

4

) and parameters for these special supplemental benefits for chronically ill enrollees at § 422.102(f) to implement section 1852(a)(3)(D) of the Act.

2

https://www.govinfo.gov/content/pkg/FR-2018-04-16/pdf/2018-07179.pdf.

3

https://www.cms.gov/Medicare/Health-Plans/HealthPlansGenInfo/Downloads/Supplemental_Benefits_Chronically_Ill_HPMS_042419.pdf.

4

https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Announcement2020.pdf.

Specifically, the BBA of 2018 amended section 1852(a)(3) of the Act to: (1) Authorize MA plans to provide additional supplemental benefits that have a reasonable expectation of improving or maintaining the health or overall function of the chronically ill enrollee to chronically ill enrollees; (2) permit those additional supplemental benefits to be not primarily health related; (3) define “chronically ill enrollee” to limit eligibility for these additional supplemental benefits; and (4) authorize CMS to waive uniformity requirements in connection with providing these benefits to eligible chronically ill enrollees. We refer to these benefits hereafter as Special Supplemental Benefits for the Chronically Ill (SSBCI). The heading for new subparagraph (D) of section 1852(a)(3) of the Act, as added by the BBA, states, “Expanding supplemental benefits to meet the needs of chronically ill enrollees.” Consistent with this text, we interpret the intent of this new category of supplemental benefits as enabling MA plans to better tailor benefit offerings, address gaps in care, and improve health outcomes for the chronically ill enrollee population.

Section 1852(a)(3)(D)(ii) of the Act, as amended, defines a chronically ill enrollee as an individual who—

• Has one or more comorbid and medically complex chronic conditions that is life threatening or significantly limits the overall health or function of the enrollee;

• Has a high risk of hospitalization or other adverse health outcomes; and

• Requires intensive care coordination.

Thus, with respect to SSBCI benefits, at § 422.102(f)(1)(i), we proposed to codify this definition of a chronically ill enrollee. Section 1859(f)(9) of the Act requires us to convene a panel of clinical advisors to establish and update a list of conditions that meet the definition of a severe or disabling chronic condition under section 1859(b)(6)(B)(iii) of the Act, which provides how having such a condition is an eligibility criterion for enrollment in a chronic care special needs plan. The standard for severe or disabling chronic condition under section 1859(b)(6)(B)(iii) of the Act is substantially similar to the criterion used in defining “chronically ill enrollee” for purposes of SSBCI eligibility. We proposed that MA plans may consider any enrollee with a condition identified on this list to meet the statutory criterion of having one or more comorbid and medically complex chronic conditions that is life threatening or significantly limits the overall health or function of the enrollee. Further, an MA plan may consider any chronic condition not identified on this list if that condition is life threatening or significantly limits the overall health or function of the enrollee. We explained that our proposal was based on our policy goal of allowing MA plans the flexibility to continue to innovate around providing care for their specific plan populations. This includes targeted chronic conditions. We stated that we recognize that there may be some conditions or a subset of conditions in a plan population that may meet the statutory definition of a chronic condition (for purposes of the statutory definition of a chronically ill enrollee), but may not be present on the list. To encourage plans to identify needs within their unique plan population and to avoid preventing a plan from addressing a condition or need in their population that may not be on the list, we proposed regulation text permitting us to publish a non-exhaustive list of medically complex chronic conditions as determined by the panel as described in section 1859(b)(6)(B)(iii) to be life threatening or significantly limit the overall health or function of an individual. This was proposed at § 422.102(f)(1)(i)(B).

As we explained in the proposed rule, we did not propose that MA plans be required to submit to CMS the processes used to identify chronically ill enrollees that meet the three pronged definition of chronically ill enrollee.

However, plans should describe the chronic conditions for which they will offer SSBCI in the notes field in the plan benefit package submitted to CMS. We emphasized that all three criteria must be met for an enrollee to be eligible for the SSBCI authorized under section 1852(a)(3)(D) of the Act. In subregulatory guidance (April 2019 HPMS Memo and the 2020 Call Letter), CMS noted that we expect MA plans to document their determinations about an enrollee's eligibility for SSBCI based on the statutory definition. We proposed to codify this as a requirement at § 422.102(f)(3)(ii). In addition, we also proposed at § 422.102(f)(3)(ii) to require plans to make information and documentation (for example, copies of the internal policies used to make the determinations, etc.) related to determining enrollee eligibility as a chronically ill enrollee available to CMS upon request.

We proposed a definition of SSBCI at paragraph (f)(1)(ii). In addition to limiting the class of enrollees who may be eligible to receive the new SSBCI benefits to the chronically ill, section 1852(a)(3)(D) of the Act requires that the specific supplemental benefit provided under this authority have a reasonable expectation of improving or maintaining the health or overall function of the enrollee. We proposed to codify this statutory requirement as part of the definition of SSBCI. Because SSBCI are supplemental benefits, they must also comply with the criteria for supplemental benefits that we proposed to codify at § 422.100(c)(2)(ii), which was discussed in detail in section VI.F. of the proposed rule. We are not addressing that proposal in this final rule and intend to address it in a future final rule. We considered whether the regulation for SSBCI should explicitly reference those requirements for supplemental benefits (proposed in § 422.100(c)(2)(ii)) to make this clear

and solicited comment on this point. Traditionally, CMS has required supplemental benefits to be benefits that: (1) Are primarily health related; (2) require the MA plan to incur a non-zero medical cost; and (3) are not covered under Medicare Parts A, B or D. In light of the authority in section 1852(a)(3)(D) of the Act for SSBCI, we modified some aspects of this longstanding policy to address SSBCI. First, as the statute provides that SSBCI may be not primarily health related, we proposed specific text on this point in both §§ 422.100(c)(2)(ii) and 422.102(f)(1)(ii). Second, we proposed regulation text at § 422.100(c)(2)(ii)(B) that the requirement that the MA organization incur a non-zero direct medical cost for all supplemental benefits would mean, in the context of SSBCI that are not primarily health related, the MA organization must incur a non-zero direct non-administrative cost for the SSBCI. In all other respects not specifically addressed as part of our proposal, SSBCI would be treated like and subject to the same standards as other supplemental benefits. Although we are not finalizing the requirements for supplemental benefits proposed to be codified at § 422.100(c)(2) in this final rule, we are clarifying that our final rule for SSBCI at § 422.102(f) incorporates these concepts.

Under section 1852(a)(3)(D)(ii)(I) of the Act, SSBCI benefits may include items or services that are not primarily health related. As discussed in detail in section VI.F. of the proposed rule, a primarily health related benefit is an item or service that is used to diagnose, compensate for physical impairments, acts to ameliorate the functional/psychological impact of injuries or health conditions, or reduces avoidable emergency and healthcare utilization. Therefore, at § 422.102(f)(1)(ii), we proposed to codify, as part of the definition, that SSBCI benefits may be non-primarily health related SSBCI benefits. Our proposed regulation text included a cross-reference to the regulation text we proposed at § 422.100(c)(2)(ii) to codify the definition of primarily health related. In the proposed rule, we made clear that in all cases, an SSBCI must have, with respect to a chronically ill enrollee, a reasonable expectation of improving or maintaining the health or overall function of the enrollee. By including it in the definition, we proposed to implement the statutory authority for MA plans to offer both primarily health and non-primarily health related SSBCI. We summarized in the proposed rule how the 2019 HPMS memo provided examples of what could be non-primarily health related SSBCI benefits, depending on the needs and health or overall function of the chronically ill enrollee. Those examples included: Meals (beyond a limited basis), food and produce, transportation for non-medical needs, pest control, indoor air quality and equipment and services, access to community or plan-sponsored programs and events to address enrollee social needs (such as non-fitness club memberships, community or social clubs, park passes, etc.), complementary therapies (offered alongside traditional medical treatment), services supporting self-direction, structural home modifications, and general supports for living (for example, plan-sponsored housing consultations and/or subsidies for rent or assisted living communities or subsidies for utilities such as gas, electric, and water). We stated in the proposed rule that the 2019 HPMS memo this guidance was equally applicable to our proposed regulation and part of how we intended our proposed regulation to be implemented and enforced.

We explained in the proposed rule another way that the statutory authority for SSBCI to be not primarily health related would be part of our proposed regulation. Unlike with traditional supplemental benefits, MA plans might not incur direct medical costs in furnishing or covering SSBCI. In the CY 2020 Call Letter, we issued guidance that so long as an MA plan incurs a non-zero non-administrative cost in connection with SSBCI, the benefits would be considered to meet this standard. As supplemental benefits, SSBCI may also take the same form as traditional supplemental benefits. For example, reductions in cost sharing for benefits under the original Medicare fee-for-service program are an allowable supplemental benefit, as reflected in the definitions of mandatory supplemental benefit in § 422.2. Thus, we stated in the proposed rule that SSBCI can be in the form of—

• Reduced cost sharing for Medicare covered benefits (such as to improve utilization of high-value services that meet the definition of SSBCI);

• Reduced cost sharing for primarily health related supplemental benefits;

• Additional primarily health related supplemental benefits; or

• Additional non-primarily health related supplemental benefits.

Eligibility for SSBCI must be determined based on identifying the enrollee as a chronically ill enrollee, using the statutory definition, and if the item or service has a reasonable expectation of improving or maintaining the health or overall function of the enrollee. In the April 2019 HPMS memo CMS clarified that MA plans can provide non-primarily health related supplemental benefits that address chronically ill enrollees' social determinants of health so long as the benefits maintain or improve the health or function of that chronically ill enrollee. MA plans may consider social determinants when determining eligibility for an SSBCI of health as a factor to help identify chronically ill enrollees whose health could be improved or maintained with SSBCI. However, MA plans may not use social determinants of health as the sole basis for determining eligibility for SSBCI. We proposed to codify (at § 422.102(f)(2)(iii)) the ability of an MA plan to consider social determinants (for example, food and housing insecurity) when determining whether an SSBCI benefit is likely to improve or maintain the health of a chronically ill enrollee,

We also explained how our proposal addressed the statutory authority to waive uniformity for an MA plan to offer SSBCI. Generally, § 422.100(d) and other regulations require all MA plan benefits to be offered uniformly to all enrollees residing in the service area of the plan. As explained in the April 2018 final rule (83 FR 16480 through 16485), MA plans may also provide access to services (or specific cost sharing or deductibles for specific benefits) that are tied to a disease state in a manner that ensures that similarly situated individuals are treated uniformly. Section 1852(a)(3)(D)(ii)(II) of the Act authorizes CMS to waive the uniformity requirements generally applicable to benefits covered by MA plans with respect to SSBCI, effective in CY 2020. As discussed in the April 2018 final rule (83 FR 16481 and 16482), this gives CMS the authority to allow MA plans to offer chronically ill enrollees supplemental benefits that are not uniform across the entire population of chronically ill enrollees in the MA plan and may vary SSBCI offered to the chronically ill as a specific SSBCI relates to the individual enrollee's specific medical condition and needs. We proposed to codify the authority for this waiver at § 422.102(f)(2)(ii) such that upon approval by CMS, an MA plan may offer non-uniform SSBCI.

In both the CY 2020 Call Letter and the April 2019 HPMS memo, we explained how we expect MA plans to: (i) Have written policies based on objective criteria (for example, health risk assessments, review of claims data, etc.) for determining SSBCI eligibility to receive a particular SSBCI benefit; (ii) document these criteria; and (iii) make

this information available to CMS upon request. We also proposed to codify requirements at § 422.102(f)(3)(iii) and (iv) for MA plans that offer SSBCI to have written policies based on objective criteria, document those criteria, to document each determination that an enrollee is eligible to receive an SSBCI, and to make this information available to CMS upon request. We explained in the proposed rule that objective criteria are necessary to address potential beneficiary appeals, complaints, and/or general oversight activities performed by CMS. We also proposed, at § 422.102(f)(3)(i), to require plans to have written policies for determining enrollee eligibility and to document its determination that an enrollee is a chronically ill enrollee based on the statutory definition codified in paragraph (f)(1)(i) of this section. We proposed to require plans to make information and documentation related to determining enrollee eligibility available to CMS upon request at § 422.102(f)(3)(ii). We explained in the proposed rule that the determination on the benefits an enrollee is entitled to receive under an MA plan's SSBCI is an organization determination that is subject to the requirements of part 422, subpart M, including the issuance of denial notices to enrollees.

We also explained how the proposal on SSBCI would codify already existing guidance and practices and therefore was not expected to have additional impact above current operating expenses. We also stated our belief that our proposal would not impose any collection of information requirements.

We thank commenters for helping inform CMS' SSBCI policy. We received approximately 62 comments on this proposal; we summarize these comments and our responses as follows:

Comment:

A number of commenters supported CMS' proposal to allow MA plans to consider any chronic condition not identified on chronic condition list if that condition is life threatening or significantly limits the overall health or function of the enrollee. A commenter encouraged CMS to continue requiring MA plans to consider any enrollee with a condition identified on list to meet the statutory criterion of having one or more comorbid and medically complex chronic conditions that is life threatening or significantly limits the overall health or function of the enrollee.

Response:

We thank commenters for their feedback. In the April 24, 2019 HPMS memo and 2020 Call Letter, CMS indicated that it would consider any enrollee with a condition identified as a chronic condition in section 20.1.2 of Chapter 16b of the Medicare Managed Care Manual to meet the statutory criterion of having one or more comorbid and medically complex chronic conditions that is life threatening or significantly limits the overall health or function of the enrollee. This was done in an effort to maintain a consistent standard in CMS policy for what is a chronic condition (for purposes of eligibility for SSBCI and for special needs plans for individuals with a severe or disabling chronic condition).

In this rule, we proposed that MA plans may consider any enrollee with a condition identified on the list of chronic conditions as determined by the panel as described in section 1859(b)(6)(B)(iii) to meet the statutory criterion of having one or more comorbid and medically complex chronic conditions that is life threatening or significantly limits the overall health or function of the enrollee in an effort to also maintain this consistency. However, we recognize that there may be some conditions and/or a subset of conditions in a plan population that may meet the statutory definition of a chronic condition, but the chronic condition may not be present on the list of medically complex chronic conditions. Therefore, we also proposed that a plan may identify an enrollee as meeting this first criterion of the definition of chronically ill enrollee—that the enrollee have one or more comorbid and medically complex chronic conditions that is life threatening or significantly limits the overall health or function of the enrollee—using a condition that is not on that list so long as the statutory (and proposed regulatory) standards are met. As stated in the proposed rule, we want to allow plans the flexibility to identify needs within their unique plan population and do not want to inadvertently prevent a plan from addressing a condition or need in their population that may not be on the list. We wish to allow plans the flexibility to continue to innovate around providing care for their specific plan populations. Thus, we are finalizing this aspect of our proposal, which is reflected in how § 422.102(f)(1)(i)(B) provides that the list published by CMS is a non-exhaustive list. We reiterate that, as we proposed, we intend this list to be the list of severe or disabling chronic conditions developed by the panel of technical advisors convened in accordance with section 1859(f)(9)(A)(i) of the Act. In addition to having one or more comorbid and medically complex conditions that is life threatening or significantly limits overall health and function, an enrollee must also have a high risk of hospitalization and require intensive care coordination to be considered chronically ill. Additionally, the covered item or service must have a reasonable expectation of improving or maintaining the health or overall function of the chronically ill enrollee.

Comment:

Some commenters requested CMS provide additional guidance concerning the definition of the phrase “intensive care coordination” as it is used in the regulation.

Response:

We expect MA plans to develop objective criteria (for example, health risk assessments, review of claims data, etc.) in determining SSBCI eligibility. We are not adopting a specific definition or standard for the statutory requirement that the chronically ill enrollee require intensive care coordination as the phrase is sufficiently clear for MA organizations to develop reasonable approaches in determining when it is met. We believe that objective criteria for determining what constitutes intensive care coordination are present in the medical community and readily accessible to the plan, such as the expertise of the plan medical director and plan physicians. We believe MA plans should have flexibility to determine what objective criteria to use when determining what meets the intensive care coordination criterion in their plan populations. However, we will keep this recommendation under advisement as we gain experience with SSBCI offerings.

Comment:

A few commenters requested CMS allow plans to use functional status, rather than medical diagnoses, to determine whether an enrollee is eligible for SSBCI. A commenter stated that individuals with the same diagnosis may have different functional limitations and therefore different needs.

Response:

We thank commenters for their feedback. We note that for the purposes of SSBCI, the statute requires the enrollee to have a chronic condition(s) that is life threatening or limits the overall health and function of an enrollee; this is in addition to the requirements that the enrollee have a high risk of hospitalization or other adverse health outcomes and require intensive care coordination to be eligible for SSBCI. Two of the required criteria refer to the function of the enrollee, so we believe it is sufficiently clear that this is something that can be considered when determining if an enrollee is a chronically ill enrollee.

Once meeting the criteria to be a chronically ill enrollee, and therefore eligible for SSBCI, the statute and our implementing regulation permit SSBCI that are designed to address the functional status of the enrollee. As discussed in the proposed rule, SSBCI must have a reasonable expectation of improving or maintaining the health or overall function of the enrollee. Thus, a plan may choose to provide an SSBCI that improves or maintains overall function of an enrollee who is eligible for SSBCI per the three-pronged definition.

Comment:

Some commenters expressed concern that the new SSBCI policies could potentially undermine the role of SNPs in the Medicare Advantage program.

Response:

SNPs are specifically designed to provide targeted care to special needs individuals. SNPs offer a wider array of specific interventions regarding their targeted population. Additionally, SNPs are required to develop and implement an evidence based model of care that provides structure for care management processes and systems that enables the plan to provide coordinated care for special needs individuals. We do not believe that the availability of SSBCI as permissible supplemental benefits undermines the specialized care model that SNPs provide. We believe that the MA program and the diverse needs of Medicare population have room for MA plans that are designed, as a whole, to address special needs populations and for specific benefits designed to improve or maintain the health or overall function of a specific chronically ill enrollee.

Comment:

Some commenters expressed concern that the new benefit flexibilities, including the different eligibility requirements, could confuse enrollees.

Response:

MA plans are required to provide enrollees with information on covered benefits, including SSBCI if the MA plan offers them, each year through the Annual Notice of Change (ANOC) and Evidence of Coverage (EOC) documents. In addition, MA organizations must comply with the marketing and communications regulations in part 422, subpart V, when issuing any information regarding SSBCI to enrollees; these include prohibitions on MA organizations misleading beneficiaries, providing information that inaccurate, or engaging in activities that confuse beneficiaries. Consistent with MCMG requirements, it is our expectation that plans communicate information on SSBCI to enrollees in a clear manner about the scope of SSBCI that the MA plan covers and who is eligible for those benefits.

Comment:

Several commenters requested that CMS ensure that these new benefit flexibilities for the chronically ill do not lead to discrimination against high-need beneficiaries.

Response:

We thank commenters for sharing their concerns. We note that section 1852(b)(1)(A) of the Act prohibits an MA plan from denying, limiting, or conditioning the coverage or provision of a service or benefit based on health-status related factors. MA regulations (for example, §§ 422.100(f)(2) and 422.110(a)) reiterate and implement this non-discrimination requirement. In interpreting these obligations to protect against discrimination, we have historically indicated that the purpose of the requirements is to protect high-acuity enrollees from adverse treatment on the basis of their higher cost health conditions (79 FR 29843; 76 FR 21432; and 74 FR 54634). As MA plans implement these benefit flexibilities for SSBCI, they must be mindful of ensuring compliance with non-discrimination responsibilities and obligations.

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Additionally, CMS reviews benefit designs to make sure that the overall impact is non-discriminatory and that higher acuity, higher cost enrollees are not being excluded in favor of healthier populations. Additionally, we believe it is important to note that in order to be eligible for SSBCI an enrollee must as stated above (1) have one or more comorbid and medically complex chronic conditions that is life threatening or significantly limits the overall health or function of the enrollee; (2) have a high risk of hospitalization or other adverse health outcomes; and (3) require intensive care coordination. It is only enrollees with chronic conditions, as described by the three pronged definition above, that are eligible for these benefits. Thus, it is these individuals who are intended to receive these special benefits.

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Among these responsibilities and obligations are compliance with Title VI of the Civil Rights Act, section 504 of the Rehabilitation Act, the Age Discrimination Act, section 1557 of the Affordable Care Act, and conscience and religious freedom laws.

Comment:

Commenters also requested CMS provide additional subregulatory guidance on SSBCI and supplemental benefits in general, including updating Managed Care Manuals. Although characterized as being in response to the proposal to change the costs that may be included in the definition of “incurred costs” for MLR purposes (addressed in section V.I. of the proposed rule and section IV.D of this final rule), other commenters noted how SSBCI are not always delivered by medical providers.

Response:

We believe that our discussion in the proposed rule explaining the proposal we are finalizing provides extensive guidance for MA organizations on this topic. The April 2019 HPMS Memo and CY 2020 Call Letter address SSBCI and that guidance is still applicable as § 422.102(f), as proposed and as finalized, codifies significant portions of that guidance. CMS will consider additional subregulatory guidance, including manual updates, as the program develops. Additionally, as discussed in the 2020 Call Letter, we note that MA plans may contract with community-based organizations such as those providing other home and community-based services (HCBS) to provide supplemental benefits, including SSBCI, that are compliant with the statutory and regulatory requirements. For example, an MA plan could elect to offer, as a SSBCI, the provision of meals or food/produce and pay a community-based organization for furnishing the covered benefit. Community-based organizations can also help determine whether an individual meets the eligibility requirements for SSBCI. These organizations may already be providing services in the community and, in some cases, have contractual arrangements with Medicaid managed care or MA plans. We note that some community services programs are funded by the HHS Administration for Community Living (ACL) and utilizing ACL programs would also be permissible in delivering these supplemental benefits. This is consistent with the amendment to § 422.2420, discussed in section III.D.1 of this final rule, to include amounts paid for SSBCI to providers that are not necessarily healthcare professionals as incurred claims in the calculation of the MLR.

Comment:

Some commenters requested CMS provide greater detail on allowable SSBCI including meals, transportation, and durable medical equipment (DME).

Response:

A non-exhaustive list of examples of non-primarily health related, which includes meals (beyond a limited basis) and non-medical transportation SSBCI can be found in the April 2019 HPMS Memo and this preamble. However, we note the requirements around the SSBCI, which include the statutory authority for the Secretary to waive uniformity requirements and the statutory requirement that SSBCI have a reasonable expectation of improving or

maintaining the health or overall function of the chronically ill enrollee, allow significant of flexibility for MA plans to consider the needs of enrollees who meet the high standards in the definition of chronically ill enrollee and to design benefits to assist enrollees at an individualized level. We encourage MA plans to continue to consider the unique needs of their plan populations when proposing items or services that meet SSBCI conditions in their bid and submitted plan benefit package. As explained in the referenced April 2019 HPMS memo, MA plans have broad discretion in developing items and services they may offer as SSBCI provided that the item or service has a

reasonable

expectation of improving or maintaining the health or overall function of the chronically ill enrollee. Under our current guidance and this final rule, MA plans also have broad discretion in determining what may be considered `a reasonable expectation' when choosing to offer specific items and services as SSBCI so long as the statutory standard is met.

Concerning DME, MA plans are required to “provide coverage of, by furnishing, arranging for, or making payment for, all services that are covered by Medicare Part A and Part B” (see 42 CFR 422.101(a)), which includes coverage of durable medical equipment, prosthetics and supplies. As discussed in the referenced HPMS memo, non-Medicare-covered safety devices to prevent injuries in the home or bathroom are considered primarily health related and may be offered as a supplemental benefit to all enrollees for whom the item is medically necessary. We remind MA organizations of our long-standing guidance in Chapter 4 of the Medicare Managed Care Manual about medical necessity in the context of supplemental benefits and how MA plans may develop their own medical necessity policies and procedures, so long as access to and coverage of Part A and Part B benefits is not more restrictive than Original Medicare. Other equipment that is not primarily health related may be considered as an SSBCI if it has a reasonable expectation of improving or maintaining the health or overall function of the chronically ill enrollee.

Comment:

A few commenters suggested CMS allow plans to target some services to address social risk factors. A commenter suggested CMS test ways to provide more flexibility in targeting supplemental benefits to address social risk factors like homelessness.

Response:

The statute does not authorize MA plans to offer and cover supplemental benefits, even SSBCI, based solely on social risk factors; the statute explicitly provides that eligibility for SSBCI is based on whether an enrollee meets the definition to be a chronically ill enrollee, which does not include a reference to social risk factors. As discussed in this preamble, MA plans can provide non-primarily health related supplemental benefits that address chronically ill enrollees' social determinants of health so long as the benefits have a reasonable expectation of maintaining or improving the health or function of that chronically ill enrollee. MA plans may consider social determinants of health as a factor to help identify chronically ill enrollees whose health could be improved or maintained with SSBCI. However, they may not use social risk factors as the sole basis for determining eligibility for SSBCI. Please note that the current CMS Innovation Center Medicare Advantage Value-Based Insurance Design (VBID) model allows participants to vary supplemental benefits based on chronic condition or socioeconomic status or a combination of the two. MA organizations have the option of participating in this model if they choose.

Comment:

Some commenters suggested that information and documentation concerning SSBCI eligibility determinations should be reported more broadly, rather than only made available upon request. A commenter stated that this information would be necessary to better understand the efficacy of offered benefits.

Response:

We thank commenters for their suggestions. At this time, we do not wish to place additional reporting burden on plans. However, we will take this comment under advisement as we continue to develop and refine SSBCI policy. Concerning the written policy requirements at § 422.102(f)(3)(i) and (iii), we clarify that these requirements concern the existence of such policies and that we do not intend to regularly review the content for compliance with the substantive standards of the regulation. We are implementing the statutory authority for SSBCI in a way to provide discretion and flexibility for MA plans, consistent with our approach to supplemental benefits design, within the statutory and regulatory limits. Per § 422.102(f)(3)(i), plans are required to have written policies for determining enrollee eligibility. As we explained in the CY 2020 Call Letter, maintaining detailed internal documentation is, at a minimum, necessary to address potential beneficiary appeals and complaints. However, MA organizations will have discretion in developing these policies. Additionally, per § 422.102(f)(3)(iii), plans are required have written policies based on objective criteria for determining a chronically ill enrollee's eligibility to receive a particular SSBCI and must document the criteria. We do not intend to closely monitor or regularly request these documentation and reiterate that MA plans will have discretion in designing which items and services to offer as SSBCI and for which chronically ill enrollees to cover them, so long as the statutory and regulatory standards are met.

Comment:

Some commenters expressed concern that SSBCI are not available to individuals enrolled in Original Medicare. Other commenters suggested CMS test a model that includes original Medicare enrollees.

Response:

The Balanced Budget Act of 1997 (BBA) authorized CMS to contract with public or private organizations to offer a variety of health plan options for beneficiaries. Under section 1852(a)(3)(D), MA plans are authorized to offer supplemental benefits, including SSBCI. The MA program has historically authorized MA plans to offer some form of additional or supplemental benefits to MA enrollees. Medicare beneficiaries choose to elect either original Medicare or an MA health plan that may have supplemental benefits. Concerning additional models, CMS appreciates this suggestion and will take it under consideration as we consider new Innovation Center models.

Comment:

Several commenters suggested CMS study how many beneficiaries actually receive these benefits and not just how many are eligible for them in order to understand the actual impact of these new benefits.

Response:

We appreciate this comment and will take this comment under consideration as we monitor how MA plans offer these benefits and continue to develop these policies.

We thank commenters for their feedback.

As discussed in this preamble, because SSBCI are supplemental benefits, they must also comply with our longstanding interpretation of the criteria for supplemental benefits; we also proposed to codify those criteria at § 422.100(c)(2)(ii), which was discussed in detail in section VI.F. of the proposed rule. We considered whether the regulation for SSBCI should explicitly reference the requirements in § 422.100(c)(2)(ii) to make this clear and solicited comment on this point. We received no comments on this specific subject.

After consideration of the comments received and for the reasons outlined in

the proposed rule and our responses to comments, we are finalizing § 422.102(f) largely as proposed. We are finalizing slight revisions to the regulation text, to eliminate a reference to § 422.100(c)(2)(i) in paragraph (f)(1)(ii) which was tied to the proposal regarding § 422.100(c)(2) that is not being addressed in this final rule. We are also correcting a typographical error in paragraph (f)(2)(iii).

B. Contracting Standards for Dual Eligible Special Needs Plan (D-SNP) Look-Alikes (§ 422.514)

Special needs plans (SNPs) are MA plans created by the MMA that are specifically designed to provide targeted care and limit enrollment to individuals with special needs. Under section 1859 of the Act, SNPs are able to restrict enrollment to: (1) Institutionalized individuals, who are currently defined in § 422.2 as those residing or expecting to reside for 90 days or longer in a long term care facility; (2) individuals entitled to medical assistance under a State Plan under Title XIX; or (3) other individuals with certain severe or disabling chronic conditions who would benefit from enrollment in a SNP. As of July 2019, there are 321 SNP contracts with 734 SNP plans that have at least 11 members, including all of the following:

• 480 dual eligible SNPs (D-SNPs).

• 125 institutional SNPs (I-SNPs).

• 129 chronic or disabling condition SNPs (C-SNPs).

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Centers for Medicare & Medicaid Services.

SNP Comprehensive Report.

(July 2019) Retrieved from

https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MCRAdvPartDEnrolData/Special-Needs-Plan-SNP-Data.html.

Beneficiaries who are dually eligible for both Medicare and Medicaid can face significant challenges in navigating the two programs, which include separate or overlapping benefits and administrative processes. Fragmentation between the two programs can result in a lack of coordination for care delivery, potentially resulting in—(1) missed opportunities to provide appropriate, high-quality care and improve health outcomes; and (2) undesirable outcomes, such as avoidable hospitalizations and poor beneficiary experiences. Advancing policies and programs that integrate care for dually eligible individuals is one way in which we seek to address such fragmentation. Under plans that offer integrated care, dually eligible individuals receive the full array of Medicaid and Medicare benefits through a single delivery system, thereby improving care coordination, quality of care, and beneficiary satisfaction, and reducing administrative burden. Some studies have shown that highly integrated managed care programs perform well on quality of care indicators and enrollee satisfaction.

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See Kim, H., Charlesworth, C.J., McConnell, K.J., Valentine, J.B., and Grabowski, D.C. “Comparing Care for Dual-Eligibles Across Coverage Models: Empirical Evidence From Oregon”,

Medical Care Research and Review,

(November 15, 2017) 1-17. Retrieved from

http://journals.sagepub.com/doi/abs/10.1177/1077558717740206

;

Anderson, W.L., Feng, Z., & Long, S.K.

Minnesota Managed Care Longitudinal Data Analysis,

prepared for the U.S. Department of Health and Human Services Assistant Secretary for Planning and Evaluation (ASPE) (March 31, 2016). Retrieved from

https://aspe.hhs.gov/report/minnesota-managed-care-longitudinal-data-analysis

;

Health Management Associates.

Value Assessment of the Senior Care Options (SCO) Program

(July 21, 2015). Retrieved from

http://www.mahp.com/wp-content/uploads/2017/04/SCO-White-Paper-HMA-2015_07_20-Final.pdf

; and

Medicare Payment Advisory Committee. “Chapter 2, Care coordination programs for dual-eligible beneficiaries.” In

June 2012 Report to Congress: Medicare and Health Care Delivery System

(June 16, 2012). Retrieved from

http://www.medpac.gov/docs/default-source/reports/jun12_entirereport.pdf?sfvrsn=0.

D-SNPs are intended to integrate or coordinate care for this population more effectively than standard MA plans or the original Medicare fee-for-service program by focusing enrollment and care management on dually eligible individuals. As of July 2019, approximately 2.6 million dually eligible individuals (1 of every 5 dually eligible individuals) were enrolled in 480 D-SNPs.

As summarized in our proposed rule, federal statute and implementing regulations have established several requirements for D-SNPs in addition to those that apply to all MA plans to promote coordination of care, including health risk assessment (HRA) requirements as described in section 1859(f)(5)(A)(ii)(I) of the Act and at § 422.101(f)(1)(i), evidence-based models of care (MOCs) as described in section 1859(f)(5)(A)(i) of the Act and at § 422.101(f), and state Medicaid agency contracts as described in section 1859(f)(3)(D) of the Act and at § 422.107. The state Medicaid agency contracting requirement allows states to require greater integration of Medicare and Medicaid benefits from the D-SNPs in their markets.

More recently, section 50311(b) of the BBA of 2018 amended section 1859 of the Act to add new requirements for D-SNPs, beginning in 2021, including minimum integration standards, coordination of the delivery of Medicare and Medicaid benefits, and unified appeals and grievance procedures for integrated D-SNPs, the last of which we implemented through regulation to apply to D-SNPs with exclusively aligned enrollment, termed “applicable integrated plans.” These requirements, along with clarifications to existing regulations, were codified in the April 2019 final rule (84 FR 15680 through 15844).

We discussed in the proposed rule and reiterate here the pattern of federal legislation, CMS rulemaking, and state use of D-SNP contracting requirements has incrementally created new requirements for D-SNPs that have generally promoted additional beneficiary protections, coordination of care, and integration of Medicare and Medicaid coverage for dually eligible individuals. While many of these requirements impose additional burdens for D-SNPs, they have not impeded enrollment growth in these plans. Total D-SNP enrollment has more than doubled from one million in 2010 to 2.6 million in 2019.

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Participation of MA organizations is robust, and most markets are stable and competitive.

8

Centers for Medicare & Medicaid Services.

SNP Comprehensive Report

(July 2010 & July 2019). Retrieved from

https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MCRAdvPartDEnrolData/Special-Needs-Plan-SNP-Data.html.

In this final rule, we address the emergence of “D-SNP look-alike” plans that are a hindrance to meaningful implementation of statutory requirements for D-SNPs, particularly those connected with the BBA of 2018. As the Medicare Payment Advisory Commission (MedPAC) described in its June 2018 and 2019 reports to Congress and as summarized in the proposed rule, D-SNP look-alikes have levels of dual eligible enrollment that are virtually indistinguishable from those of D-SNPs and far above those of the typical MA plan.

As discussed in the proposed rule, we believe the low enrollment of non-dually eligible individuals in D-SNP look-alikes results from benefits and cost-sharing that, like the benefits and cost-sharing offered by D-SNPs, are designed to attract only dually eligible individuals. In contrast to non-SNP MA plans, both D-SNPs and D-SNP look-alikes allocate a lower percentage of MA rebate dollars received under the bidding process at § 422.266 to reducing Medicare cost-sharing and a higher percentage of rebate dollars to supplemental medical benefits such as dental, hearing, and vision services. With such a benefit design, many D-SNP look-alikes technically require members to pay higher cost sharing for Parts A and B services than most MA plans require, which we believe dissuades most non-dually eligible

Medicare beneficiaries from enrolling. However, because most dually eligible individuals are Qualified Medicare Beneficiaries (QMBs) who are not required to pay Medicare cost sharing under sections 1848(g)(3) and 1866(a)(1)(A) of the Act, we believe they are not dissuaded from enrolling in these non-D-SNPs by the relatively higher cost sharing. A similar dynamic exists for Part D premiums and high deductibles, both of which are covered by the Part D low-income subsidy that dually eligible individuals receive. We believe that such benefit designs are unattractive for Medicare beneficiaries who are not dually eligible individuals because they would need to cover these costs out-of-pocket. Despite the similarities with D-SNPs in terms of levels of dual eligible enrollment and benefits and cost-sharing design, D-SNP look-alikes are regulated as non-SNP MA plans and are not subject to the federal regulatory and state contracting requirements applicable to D-SNPs.

As summarized in the proposed rule, the proliferation and growth of D-SNP look-alikes raises concerns related to effective implementation of the BBA of 2018 requirements; meaningful integration of Medicare-and Medicaid programs via state Medicaid agency contracting; care coordination through HRAs; evidence-based MOCs; and beneficiary confusion stemming from misleading marketing practices by brokers and agents that misrepresent to dually eligible individuals the characteristics of D-SNP look-alikes. We direct readers to the proposed rule, 85 FR 9018 through 9021, for a more detailed discussion of D-SNP look-alikes and their impact on implementation of D-SNP Medicare and Medicaid integration.

Under our authority to adopt standards implementing the Part C statute and to add contract terms in sections 1856(b) and 1857(e)(1) of the Act, we proposed establishing contracting standards at § 422.514 for MA organizations based on their projected dually eligible enrollment in plan bids or on the proportion of dually eligible enrollees actually enrolled in the MA plan. As discussed in the proposed rule, a high rate of enrollment by dually eligible individuals in a non-D-SNP would allow us to identify non-SNP MA plans that are intended to predominantly enroll dually eligible individuals (that is, D-SNP look-alikes). To prevent the undermining of the statutory and regulatory framework for D-SNPs, we proposed a new regulation precluding CMS from entering into or renewing a contract for an MA plan that an MA organization offers, or proposes to offer, with enrollment of dually eligible individuals that exceeds specific enrollment thresholds (85 FR 9021-9025). We also proposed that the regulation apply in any state where there is a D-SNP or any other plan authorized by CMS to exclusively enroll dually eligible individuals.

As described in our proposal, we would not enter into or renew MA contracts for an MA plan for an upcoming plan year if that MA plan exceeds specific enrollment thresholds for dually eligible individuals. However, MA organizations with plans exceeding the enrollment threshold that also have approved D-SNPs for the following plan year would be permitted to transition dually eligible enrollees from D-SNP look-alikes to D-SNPs for which the individuals are eligible. We proposed this transition process to minimize disruptions to beneficiary coverage and allow enrollees in these D-SNP look-alikes to benefit from the statutory and regulatory care coordination and Medicaid integration requirements. We describe the specific proposed changes to § 422.514 as follows.

We proposed changing the title of § 422.514 by removing the word “minimum” because the changes we proposed to § 422.514 reflect an additional type of enrollment requirement beyond the minimum enrollment requirements currently articulated in § 422.514. We also proposed changing the title of paragraph (a) from “Basic rule” to “Minimum enrollment rules” for clarity due to the proposed change to the scope of § 422.514.

We proposed adding a new paragraph (d) to establish new contract requirements related to dual eligible enrollment. The proposed requirement at paragraph (d) would apply for an MA plan that is not a special needs plan for special needs individuals as defined in § 422.2. We explained our rationale in depth for this approach in the proposed rule.

We proposed to limit the requirement at paragraph (d) to states where there is a D-SNP or any other plan authorized by CMS to exclusively enroll dually eligible individuals, such as Medicare-Medicaid Plans (MMPs). We proposed this limitation because it is only in such states that the implementation of D-SNP requirements necessitates our proposed new contracting requirements. That is, in a state with no D-SNPs or comparable managed care plans like MMPs, the D-SNP requirements have not had any relevance historically, as there are no plans contracted with the state to implement the D-SNP requirements or otherwise integrate Medicare and Medicaid services. Therefore, the operation of a D-SNP look-alike would not have any material impact on the full implementation of federal D-SNP requirements. In such states, the existence of D-SNP look-alikes is not impeding state or federal implementation of any requirements for enhanced care coordination and Medicaid integration by providing a vehicle for MA organizations to avoid compliance with those requirements that are imposed on D-SNPs or comparable managed care plans like MMPs. We also noted the limited number of states—eight, as of July 2019—with no D-SNPs. Therefore, we expressed our belief that it is not critical for our proposed requirements in paragraph (d) to apply in such states. We solicited comment on whether the absence of these data sharing and care coordination requirements for D-SNP look-alikes in states where they could continue to operate under our final rule disadvantages the dually eligible individuals in D-SNP look-alikes and whether we should extend the proposed requirement at paragraph (d) to all states.

We proposed new paragraphs (d)(1) and (2) that would require that CMS not enter into or renew a contract, for plan year 2022 or subsequent years, for an MA plan that is a non-SNP plan that either:

• Projects in its bid submitted under § 422.254 that 80 percent or more of the plan's total enrollment are enrollees entitled to medical assistance under a state plan under Title XIX, or

• Has actual enrollment, as determined by CMS using the January enrollment of the current year, consisting of 80 percent or more of enrollees who are entitled to medical assistance under a state plan under Title XIX, unless the MA plan has been active for less than one year and has enrollment of 200 or fewer individuals at the time of such determination.

We explained that using each enrollment scenario is necessary to ensure that both new D-SNP look-alikes are not offered and that current, or existing, D-SNP look-alikes are not continued. We proposed a threshold for dually eligible enrollment at 80 percent of a non-SNP MA plan's enrollment because it far exceeds the share of dually eligible individuals in any given market and, therefore, would not be the result for any plan that had not intended to achieve high dually eligible enrollment. As detailed in the proposed rule, MedPAC data show that our proposed threshold would have minimal impact on total dually eligible enrollment in non-SNP MA plans.

As discussed in the proposed rule, we considered an alternative discussed by MedPAC in its June 2019 report to Congress for identifying traditional MA plans with predominantly dually eligible enrollment: Setting the bar at the higher of 50 percent dually eligible enrollment or the proportion of dually eligible MA-eligible individuals in the plan service area plus 15 percentage points. We also considered setting a lower threshold for dually eligible enrollment at a point between 50 percent and our 80 percent threshold. However, as explained in the proposed rule, we proposed an enrollment threshold of 80 percent or higher as an indicator that the plan is designed to attract disproportionate dually eligible enrollment because it aligns with MedPAC's 2019 research findings, provides a threshold that would be easier for MA organizations to determine prospectively, and would be operationally easier for CMS to implement. We solicited comment on these alternative enrollment thresholds.

Under our proposal for paragraph (d)(2), we proposed making the annual determination whether an MA organization has a non-SNP MA plan with actual enrollment exceeding the established threshold using the plan's enrollment in January of the current year in order to make such evaluations and issue the necessary information to affected MA organizations sufficiently early in the year for MA organizations to have time to take the necessary steps to adjust other plan offerings before the point at which CMS would decline to renew the contract for an MA plan—which effectively (and as described later in this section) would result in the non-renewal (that is, termination) of the D-SNP look-alike plan benefit package. Proposed paragraph (d)(2) would also limit the prohibition to MA plans that have been active for one or more years and with enrollment greater than 200 individuals at the time of CMS' determination under proposed paragraph (d)(2).

In paragraph (e), we proposed processes and procedures for transitioning individuals who are enrolled in a D-SNP look-alike to another MA-PD plan (or plans) offered by the MA organization to minimize disruption as a result of the prohibition on contract renewal for existing D-SNP look-alikes. Under our proposal, an MA organization with a non-SNP MA plan determined to meet the enrollment threshold in proposed paragraph (d)(2) could transition enrollees into another MA-PD plan (or plans) offered by the same MA organization, as long as any such MA-PD plan meets certain proposed criteria. This proposed transition process would allow MA enrollees to be transitioned from one MA plan offered by an MA organization to another MA-PD plan (or plans) without having to fill out an election form or otherwise indicate their enrollment choice as typically required, but it would also permit the enrollee to make an affirmative choice for another MA plan of his or her choosing.

In proposed paragraph (e)(1), we specified that, for coverage effective January 1 of the next year, the MA organization could only transition individuals from the D-SNP look-alike that is not being renewed into one or more MA plans (including a D-SNP) if such individuals are eligible to enroll in the receiving plan(s) in accordance with §§ 422.50 through 422.53. Thus, the individual would have to reside in the service area of the new plan and otherwise meet eligibility requirements for it. The proposed transition process would allow, but not require, the MA organization to transition dually eligible enrollees from a D-SNP look-alike into one or more D-SNPs offered under the MA organization, or another MA organization that shares the same parent organization as the MA organization, and therefore allow enrollees to benefit not only from continued coverage under the same parent organization but also from the care coordination and Medicaid benefit integration offered by a D-SNP.

We also proposed at paragraphs (e)(1)(i) through (iii) specific criteria for any MA plan to receive enrollment through this transition process to ensure that enrollees receive coverage under their new MA plan that is similarly affordable as the plan that would not be permitted for the next year:

• Under proposed paragraph (e)(1)(i), we would allow a non-renewing D-SNP look-alike to transition enrollment to another non-SNP plan (or plans) only if the resulting total enrollment in each of the MA plans receiving enrollment consists of less than 80 percent dually eligible individuals. SNPs receiving transitioned enrollment would not be subject to this proposed limit on dual eligible enrollment. As described in the proposed rule, the percent of dually eligible individuals in the resulting total enrollment would have to be determined prospectively in order for us to make a timely decision on whether to allow for an MA organization to transition enrollment into a non-SNP MA plan or plans. Under proposed paragraph (e)(3), we would make such determination by adding the cohort of enrollees that the MA organization proposes to enroll into a different non-SNP plan to the April enrollment of the receiving plan and calculating the resulting percent of dually eligible enrollment. As discussed in the proposed rule, we would make this calculation for each non-SNP plan into which the MA organization proposes to transition enrollment in order to ensure that the enrollment transitions do not result in another non-SNP MA plan being treated as a D-SNP look-alike.

• Under proposed paragraph (e)(1)(ii), we would require that any plan receiving transitioned enrollment be an MA-PD plan as defined in § 422.2.

• Under proposed paragraph (e)(1)(iii), any MA plan receiving transitioned enrollment from a D-SNP look-alike would be required to have a combined Part C and D beneficiary premium of $0 after application of the premium subsidy for full subsidy eligible individuals described at § 423.780(a).

As proposed in paragraph (e)(2)(ii), the MA organization would be required to describe changes to MA-PD benefits and provide information about the MA-PD plan into which the individual is enrolled in the Annual Notice of Change (ANOC) that the MA organization must send, consistent with § 422.111(a), (d), and (e) and proposed § 422.2267(e)(3). Consistent with § 422.111(d)(2), enrollees would receive this ANOC describing the change in plan enrollment and any differences in plan enrollment at least 15 days prior to the first day of the annual election period (AEP).

As proposed in paragraph (e)(4), in cases where an MA organization does not transition some or all current enrollees from a D-SNP look-alike plan to one or more of the MA organization's other plans as provided in proposed paragraph (e)(1), it would be required to send affected enrollees a written notice consistent with the non-renewal notice requirements at § 422.506(a)(2).

As discussed in more detail in the proposed rule preamble, this proposed transition process is conceptually similar to “crosswalk exception” procedures historically allowed by CMS and proposed at § 422.530 in the notice of proposed rulemaking. However, in contrast to the proposed crosswalk exceptions, our proposal would allow the transition process to apply across legal entities offered by MA organizations under the same parent organization, as well as between non-SNP plans and SNPs. Because this transition process is not the same as the crosswalk process, we proposed to codify it as part of § 422.514.

In the proposed rule, we explained how we also considered an alternative

that would require transitioning any dually eligible individuals into a D-SNP for which they were eligible if such a plan is offered by the MA organization. In addition, we solicited comment on whether additional criteria for the receiving plan are necessary to protect beneficiaries who are affected by this proposed prohibition on renewing MA plans that meet the criteria in proposed § 422.514(d).

We described in the proposed rule our intent for the transition process to take effect in time for D-SNP look-alikes operating in 2020 to utilize the transition process for enrollments to be effective January 1, 2021. This will allow current MA-PD plans that expect to meet the enrollment threshold in proposed paragraph (d)(2) to retain some or all of their current enrollment by transitioning these individuals to other MA-PD plans offered by the same MA organization a year before CMS implements any contracting limitations under this proposal.

Overall, our proposed rule focused on dually eligible individuals as a percentage of an MA plan's total enrollment. We considered using alternative criteria instead of, or in addition to, the percentage of projected or actual dually eligible enrollment, to identify non-SNP MA plans designed to exclusively or predominantly enroll dually eligible individuals. In particular, we considered identifying D-SNP look-alikes by the benefit design these plans typically offer—relatively high Parts A and B cost sharing and a high Part D deductible that make the plans unattractive to Medicare-only beneficiaries, supplemental benefits like dental and hearing services and over-the-counter drugs that mimic typical D-SNP offerings, and a premium for Part D coverage that is fully covered by the Part D low-income subsidy. We also considered using the percentage of MA rebate dollars allocated to buy down Parts A and B cost sharing compared to other supplemental benefits—D-SNP look-alikes typically allocate a greater percentage to the latter—as a way to identify D-SNP look-alikes. We explained in the proposed rule why we did not propose those alternatives but solicited comment on whether these alternative criteria should be used instead of, or in addition to, the criteria for identifying D-SNP look-alikes and applying contracting prohibition.

We received the following comments on these proposed contract requirements and respond to them below:

Comment:

Many commenters expressed strong support for our proposal to preclude CMS from entering into or renewing a contract for an MA plan that an MA organization offers, or proposes to offer, with enrollment of dually eligible individuals that exceeds a specific threshold. Several commenters agreed with CMS that D-SNP look-alikes are an impediment to Medicare-Medicaid integration and meaningful implementation of federal and state requirements, including the new statutory requirements for D-SNPs under the BBA of 2018. A commenter appreciated that the proposal would, in most states, ensure that any entity whose enrollment consists mainly of dually eligible individuals follows the standards Congress established for MA plans serving dually eligible individuals. Several commenters agreed with MedPAC's 2018 and 2019 analyses, cited by CMS in the proposed rule preamble, that the proliferation of D-SNP look-alikes negatively impacts integrated care programs for dually eligible individuals. Some commenters believed the proposal would ultimately improve access to integrated care for dually eligible individuals. Several commenters also believed that D-SNPs were in the best position to serve the dually eligible population because of the D-SNP MOC, including care coordination and case management, which is not required of D-SNP look-alikes.

Several commenters also supported the proposed regulation because of their concern about how D-SNP look-alikes operate. A number of commenters expressed concern about D-SNP look-alikes marketing to dually eligible individuals in ways that misrepresent the plans' ability to integrate Medicare and Medicaid services. Several commenters noted that while D-SNP look-alikes advertise that they integrate care, they are not designed to serve the needs of dually eligible individuals nor required to do so. For these reasons, many commenters believed look-alikes confuse dually eligible individuals about their coverage options and lead to beneficiary harm.

Response:

We appreciate the widespread support we received for our proposal. Many of the commenters' concerns about D-SNP look-alikes mirror the comments discussed in the 2020 Final Call Letter

9

and summarized in the proposed rule preamble. We believe that the contracting requirement we are finalizing in this rule will address these concerns and ensure the meaningful implementation of the new Medicare-Medicaid integration requirements under the BBA of 2018, along with other state and federal requirements. As discussed in the proposed rule and our responses to other comments, the prohibition will not apply to D-SNP look-alikes in states where there is a D-SNP or plan authorized by CMS to exclusively enroll dually eligible individuals.

9

Available at

https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Announcements-and-Documents.html.

Comment:

A few commenters expressed support for CMS' efforts to integrate care but had concerns about the proposed contracting standard. Some commenters noted that the proposed rule may disrupt services and benefits for beneficiaries enrolled in D-SNP look-alikes. These commenters cautioned CMS to attend to continuity of care, the nuances of state requirements, and market dynamics as this final rule is implemented.

Response:

We thank these commenters for their comments. We believe that the requirements we are finalizing in this rule, described in more detail later in this section, strike a balance between allowing for continuity of care for beneficiaries and promoting integrated care. In particular, as discussed later in this section, we are delaying implementation of D-SNP look-alike contract limitations for one additional year to provide sufficient time for MA organizations to develop and seek approval for new plans, coordinate with state integrated care efforts, and facilitate a transparent and smooth transition of beneficiaries. With a technical clarification described later in this section, we are finalizing our proposed transition approach for D-SNP look-alikes to transition enrollees into an MA plan or plans meeting certain criteria within the same parent organization to promote continuity of care.

Comment:

Several commenters opposed our proposal to limit enrollment of dually eligible individuals in non-SNP MA plans. Some commenters noted that D-SNP look-alikes were created in response to states' contracting policies like those of California that restricted D-SNPs. A commenter questioned the need to regulate D-SNP look-alikes, citing the June 2019 MedPAC finding that only a small portion of traditional MA plans have dual eligible enrollment that comprises 80 percent or more of total plan membership.

10

10

See

June 2019 MedPAC Report to Congress, Chapter 12

at

http://www.medpac.gov/docs/default-source/reports/jun19_ch12_medpac_reporttocongress_sec.pdf?sfvrsn=0.

Some commenters believed that our proposal limited competition between MA plans that could lead to higher

quality, innovative care, additional supplemental benefits, and improved provider network access for dually eligible individuals. A commenter stated that competition from D-SNP look-alikes targeted by our proposal has not hurt D-SNPs, noting that total D-SNP enrollment has more than doubled from one million in 2010 to 2.6 million in 2019.

A few commenters believed that D-SNP look-alikes fill critical gaps in markets where D-SNPs and MMPs are not available. Some commenters also believed that D-SNP look-alikes provide access to supplemental benefits and increased levels of care management, particularly for partial-benefit dually eligible individuals. These commenters were concerned that if the proposed contracting standard was implemented, D-SNP look-alike enrollees would lose access to these benefits and may return to the original Medicare fee-for-service program, which does not coordinate with Medicaid. A few commenters requested that, prior to finalizing any rule on D-SNP look-alikes, CMS perform a more detailed analysis of available options and impacts of the proposal on enrollees, both full- and partial-benefit dually eligible individuals, such as loss of benefits.

Several commenters expressed concern that CMS' proposed contracting standard would unnecessarily limit beneficiary choice. A few commenters requested that CMS explain how the value of choice was taken into account for this proposal. Other commenters encouraged CMS to continue to promote consumer choice and provide dually eligible beneficiaries with an array of plan options that allow individuals to choose how to best meet their health care needs. A commenter noted that the need for beneficiary choice was supported by the June 2018 MedPAC finding that 64 percent of partial-benefit dually eligible MA enrollees were enrolled in traditional MA plans in 2016,

11

and that a large percentage of full-benefit dually eligible individuals passively enrolled in MMPs also have indicated a preference for choice by opting out of MMP enrollment.

11

See

June 2018 MedPAC Report to Congress, Chapter 9

at

http://medpac.gov/docs/default-source/reports/jun18_ch9_medpacreport_sec.pdf?sfvrsn=0.

Response:

We thank the commenters for the feedback on our proposal. We maintain that MA plans with enrollment exclusively, or predominantly, consisting of dually eligible individuals—the principal criterion that distinguishes D-SNPs from other MA plans in statute—should be subject to the federal regulatory and state contracting requirements that are applicable to D-SNPs. We note that, despite D-SNP regulations promulgated since 2006, MA organization participation in the D-SNP program is robust. Most D-SNP enrollment is in markets that feature numerous other plan choices for beneficiaries, and enrollment in D-SNPs has continued to increase. We also note that while state contracting policies may have been the impetus for some sponsors to create D-SNP look-alikes, states are authorized to play a role in coordinating Medicaid benefits with MA plans that exclusively enroll dually eligible individuals, as described in section 164 of MIPPA, which amended section 1859(f) of the Act. Therefore, if our proposal leads to any change in the degree of beneficiary choice, such impact would be marginal, and we believe the benefits from our proposal—described here and in the proposed rule—outweigh any such impact.

We agree with the commenter that D-SNP look-alikes are currently a small number of all MA plans; however, D-SNP look-alikes' growth—both in terms of the number of plans offered and their total enrollment—is concerning, especially given Congress' requirements in the BBA of 2018 to further integrate Medicare and Medicaid benefits through D-SNPs. As noted in our proposed rule preamble, MedPAC found that D-SNP look-alike enrollment in California markets grew from around 5,000 in 2013 to over 95,000 in 2017.

12

MedPAC also explored enrollment trends more broadly, identifying 31 non-SNP plans

13

operating in 2017 in which dually eligible individuals comprised 80 percent or more of total plan enrollment. These 31 plans, which operated in 10 states, included approximately 151,000 enrollees. MedPAC estimated that in 2019 enrollment would increase to 193,000 beneficiaries in 54 D-SNP look-alikes across 13 states.

14

12

See

June 2018 MedPAC Report to Congress, Chapter 9

at

http://medpac.gov/docs/default-source/reports/jun18_ch9_medpacreport_sec.pdf?sfvrsn=0.

13

MedPAC also excluded employer group waiver plans (EGWPs) and a select group of medical savings account (MSA) plans.

14

See

June 2018 MedPAC Report to Congress, Chapter 9

at

http://medpac.gov/docs/default-source/reports/jun18_ch9_medpacreport_sec.pdf?sfvrsn=0

and

June 2019 MedPAC Report to Congress, Chapter 12

at

http://www.medpac.gov/docs/default-source/reports/jun19_ch12_medpac_reporttocongress_sec.pdf?sfvrsn=0.

We acknowledge the commenters' concerns about reducing access to supplemental benefits for D-SNP look-alike members and beneficiary choice, particularly for partial-benefit dually eligible individuals. However, as we stated in the proposed rule, we chose not to propose regulating benefit design to avoid inadvertently diminishing benefit flexibility that genuinely improves competition and beneficiary choice. We also note that most D-SNP look-alike enrollment is in markets that feature numerous other plan choices for beneficiaries, including D-SNPs that offer similar benefits; therefore, D-SNP look-alikes are not generally filling gaps in most of their markets nor significantly contributing to beneficiary choice. The majority of D-SNP look-alikes will be able to transition enrollees into another MA plan under the process described at § 422.514(e) of this final rule; therefore, we project that few D-SNP look-alike enrollees will be enrolled by default in the original Medicare fee-for-service program when this regulation limits the continued offering of a D-SNP look-alike.

We also note the contracting standard that we proposed and are finalizing does not apply to MA plans in states without D-SNPs or other plans authorized by CMS to exclusively enroll dually eligible individuals, further limiting the impact of this provision on access to supplemental benefits or beneficiary choice. Of the seven states that do not contract with D-SNPs or other plans authorized to exclusively enroll dually eligible individuals, only two have D-SNP look-alikes. As discussed in response to other comments on this topic, we will continue to engage with stakeholders to identify issues related to choice and access to supplemental benefits.

Comment:

A commenter suggested that CMS work with states to provide multiple integrated care options for dually eligible individuals as an alternative to limiting D-SNP look-alikes. Another commenter requested that if CMS decides to implement the proposal, we should also require states to contract with D-SNPs.

Response:

We note that section 164(c)(4) of MIPPA does not in any way obligate states to contract with a D-SNP; therefore, CMS does not have the authority to mandate states to contract with D-SNPs, and states have significant control over the availability of D-SNPs. We generally agree that increasing the number of integrated care options for dually eligible individuals is desirable, and CMS will continue to work with states to identify ways to integrate Medicare and Medicaid benefits in a way that best serves the states' dually eligible population. We also provide technical assistance to states on integration issues, including

through the Integrated Care Resource Center (see

https://www.integratedcareresourcecenter.com/

).

Comment:

Several commenters supported our proposed approach in paragraph (d) to limit the availability of D-SNP look-alikes only in those states where there is a D-SNP or any other plan authorized by CMS to exclusively enroll dually eligible individuals. These commenters stated that look-alikes provide valuable supplemental benefits to dually eligible individuals that would not be available in a traditional MA benefit design in those states without D-SNP or MMP options. Some commenters further agreed with our rationale in the proposed rule that, in states without D-SNPs or comparable managed care plans (like MMPs), the existence of D-SNP look-alikes is not impeding full implementation of D-SNP integration requirements. A number of commenters recommended that our proposal to limit availability of D-SNP look-alikes apply only in counties where there are no D-SNPs or other plans authorized to exclusively enroll dually eligible individuals. A commenter agreed with CMS' observation that operating MA plans in rural areas presents a challenge to MA plan operations, including for D-SNPs. This commenter stated that, in those rural areas without D-SNPs or other plans authorized by CMS to exclusively enroll dually eligible individuals, eliminating MA plan options can harm rather than benefit dually eligible individuals, and in the absence of integrated plan options, access to D-SNP look-alikes should be preserved.

Response:

We appreciate these commenters' support of the proposed limit on this policy to states where there is a D-SNP or any other plan authorized by CMS to exclusively enroll dually eligible individuals, such as an MMP. In our proposed rule we noted that, as of July 2019, seven states did not have D-SNPs or other plans authorized by CMS to exclusively enroll dually eligible individuals. In these states, there are no plans contracted with the state to implement the D-SNP requirements or otherwise integrate Medicare and Medicaid services, and therefore the operation of a D-SNP look-alike would not have any immediate material impact on the full implementation of federal D-SNP requirements. In such states, the existence of D-SNP look-alikes is not impeding federal or state implementation of any requirements for enhanced care coordination and Medicaid integration by providing a vehicle for MA organizations to avoid compliance with those requirements that are imposed on D-SNPs or comparable managed care plans like MMPs.

We disagree with the recommendation to further limit the proposed D-SNP look-alike policy to those counties where a D-SNP or comparable managed care plan like an MMP currently exists. From our work with states on Medicare-Medicaid integration, we recognize that states often proceed incrementally, contracting first for integrated managed care plans in certain counties before incorporating more areas or going statewide. We believe that allowing D-SNP look-alikes to precede D-SNPs or other more integrated plans in these markets would hinder expansion of state efforts to expand integrated managed care. In addition, we believe it would be more complicated for CMS to administer, MA organizations to comply with, and consumers to understand, if there was a county-by-county limitation on D-SNP look-alike availability.

With respect to the comments about contracting in rural areas, we understand that operating MA plans, including D-SNPs, can be a challenge in areas where the Medicare population is sparse and establishing networks is difficult. As discussed in section V.A. of this preamble, we are taking steps to improve access to managed care in rural areas through changes in network adequacy assessments. We will continue to monitor the volume of MA plans, including D-SNPs, offered in rural areas.

Comment:

A commenter requested that CMS exempt from our proposed dual eligible enrollment rules in paragraph (d) D-SNP look-alikes in states that require the parent organization of the D-SNP to have a Medicaid contract with the state. The commenter expressed concern that implementing the rule as proposed would have an anticompetitive effect of locking out new plan entrants in such states.

Response:

We disagree with the commenter that implementing paragraph (d) as proposed would reduce competition by not allowing new plan entrants in those states that limit D-SNP approval to parent organizations that have existing Medicaid contracts. As discussed in our April 2019 final rule in implementing the BBA of 2018, we sought to maintain existing state flexibility to promote integrated care for dually eligible individuals. As discussed earlier in this section, section 164 of MIPPA, which amended section 1859(f)(3)(D) of the Act, does not mandate that states contract with D-SNPs. The ability of states to determine the entities with which they enter into D-SNP contracts has been a core tenet for coordinating care between Medicare and Medicaid. We support efforts by states to further the integration of care coordination continuum and believe that the benefit from such coordination, in fact, increases competition to develop and win integrated products (that is, Medicaid contracts).

Comment:

Many commenters stated that the dual eligible enrollment requirement should apply in all states to discourage the proliferation of plans that are not truly integrated and that offer limited or no care coordination. Several commenters noted that D-SNP look-alikes may detract from state efforts to coordinate care for dually eligible individuals, such as managed fee-for-service models. These commenters believed that states that do not contract with D-SNPs or MMPs should be able to exercise oversight and have freedom to set a broader strategy to coordinate care for their dually eligible population without worrying about the proliferation of D-SNP look-alike products. A commenter stated that proliferation of D-SNP look-alikes may discourage states from future contracting with D-SNPs and gives plans no incentive to introduce D-SNPs. This commenter noted that CMS and states need to work together to improve the way they serve dually eligible individuals because such individuals include the highest need, highest cost Medicare and Medicaid beneficiaries, and limiting D-SNP look-alike regulation to only some states impedes progress toward that end.

Response:

We appreciate the commenters' perspective on this issue. We believe that our proposal as finalized strikes a balance between prohibiting look-alikes and allowing them to continue in states without D-SNPs or any other plan authorized by CMS to exclusively enroll individuals entitled to medical assistance under a state plan under Title XIX. We do not believe that in such states, the existence of look-alikes is materially impeding state or federal implementation of any requirements for enhanced care coordination and Medicaid integration or providing a vehicle for MA organizations to avoid compliance with those requirements that are imposed on D-SNPs or comparable managed care plans like MMPs. We recognize that substantial enrollment in D-SNP look-alikes in these states can alter the landscape if any of these states decides to begin contracting with D-SNPs. However, we believe state policy can accommodate these changes, for example, by contracting with MA organizations offering look-alikes to offer D-SNPs, enabling the transition of

look-alike enrollees into more integrated plans. We continue to collaborate and work with all states to strengthen integrated care, and we will monitor the penetration of MA plans as we continue to promote integrated care. As discussed in our proposed rule, we believe the limitation on the states where the dual eligible enrollment requirement applies will continue to protect states' ability to contract with plans—including for Medicaid behavioral health services and long-term supports and services (LTSS)—in a manner that promotes integration and coordination of benefits and a more seamless experience for dually eligible individuals in such plans. Therefore, in this final rule, we decline to expand our dual eligible enrollment requirements to plans operating in such states. However, we will continue to monitor D-SNP look-alikes in these states and consult with state officials about their impact on dually eligible individuals and state policy objectives.

Comment:

Many commenters requested that CMS clarify whether the proposed 80 percent threshold for dual eligible enrollment in a non-SNP plan included both individuals entitled to full Medicaid benefits and individuals entitled to partial Medicaid benefits, such as state payment of Medicare Part B premiums or payment of Medicare premiums and cost sharing.

Response:

Our proposed regulatory language in paragraph (d) regarding “enrollees who are entitled to medical assistance under a state plan under title XIX” is the same language used in section 1859(b)(6)(B)(ii) of the Act and in § 422.2 to define the population of special needs individuals D-SNPs may exclusively enroll. This language includes both full- and partial-benefit dually eligible individuals. Therefore, we clarify here that our proposed threshold for dual eligible enrollment—which we are finalizing in this rule—included both full- and partial-benefit dually eligible individuals.

Comment:

A commenter recommended that our regulatory language in paragraph (d) be modified to refer to individuals who are “entitled to and enrolled in medical assistance,” since plans only know which enrollees actually receive Medicaid benefits, not those whose income levels might qualify them for such benefits.

Response:

While we appreciate the commenter's concern, we believe that the language in § 422.514(d)(1) (individuals “entitled to medical assistance” under a state plan under Title XIX) sufficiently refers to individuals who have been determined to be entitled to medical assistance by virtue of having been enrolled in medical assistance under a state plan under Title XIX. That is our intent and interpretation of this language in § 422.514(d).

Comment:

Some commenters recommended that the final rule not count any partial-benefit dually eligible individuals toward the threshold, while maintaining the threshold at 80 percent, in order to minimize the potential disruption caused by the non-renewal of D-SNP look-alikes, including D-SNP look-alikes in contracts with high Star Ratings. Other commenters supported setting the threshold at 80 percent if it applied only to full-benefit dually eligible individuals. Some commenters recommended that the threshold consist only of the categories of dually eligible individuals who were allowed to enroll in a D-SNP in any given market, defined at either the state or county level.

In contrast, other commenters supported counting enrollment of partial-benefit dually eligible individuals toward the 80 percent threshold. A commenter wrote that exclusion of partial-benefit dually eligible individuals while maintaining the threshold at 80 percent would drastically reduce the number of D-SNP look-alikes captured by the proposed regulation and potentially render the entire proposal “meaningless.”

Response:

We disagree with the recommendation to exclude partial-benefit dually eligible individuals from the enrollment threshold and agree with those commenters who believed such an exclusion would render the proposal less effective. Such an exclusion would allow 32 of the 64 non-SNP MA plans with more than 80 percent enrollment by both full- and partial-benefit dually eligible individuals to continue to operate. These include nine D-SNP look-alikes in states that have D-SNPs or MMPs that only enroll full-benefit dual eligible individuals. Those nine plans would continue to operate if, as suggested by a commenter, we did not count partial-benefit dually eligible individuals towards the threshold only in states that exclude these individuals from D-SNPs and other integrated plans. While partial-benefit dually eligible individuals are not currently eligible to enroll in D-SNPs or MMPs in those states, they have access to other MA plans that are not D-SNP look-alikes. As discussed in the proposed rule, over 98 percent of dually eligible individuals who are enrolled in non-SNP MA plans are in plans that are not D-SNP look-alikes.

The data show that the exclusion of partial-benefit dually eligible individuals would render the proposed regulation ineffective in achieving its primary goal: Preserving the ability of CMS and states to meaningfully implement the BBA of 2018 requirements and to use D-SNPs and other integrated care plans to integrate Medicare and Medicaid for dually eligible individuals.

In addition, exclusion of partial-benefit dually eligible individuals from the threshold would allow any MA organization to design a benefit package and target enrollment for an MA plan that exclusively enrolled partial-benefit dually eligible individuals. Section 1859(b)(6)(B)(ii) of the Act, however, only allows D-SNPs to exclusively enroll dually eligible individuals.

Comment:

Some commenters recommended excluding partial-benefit dually eligible individuals from the threshold and put forward a number of rationales for their recommendation. Some commenters stated that partial-benefit dually eligible individuals did not benefit from the coordination of Medicaid benefits provided by D-SNPs or other integrated plans because they were not entitled to receive such benefits. A few commenters also noted that many states exclude partial-benefit dually eligible individuals from D-SNPs or other integrated plans, and therefore excluding partial-benefit dually eligible individuals from the enrollment threshold would ensure the availability of another meaningful plan option to such individuals. A few commenters noted that partial-benefit dually eligible individuals have greater social, functional, and health needs than the broader Medicare population and could benefit from the enhanced care coordination provided by MA plans, including the D-SNP look-alike in which they enrolled. Another commenter requested that CMS provide an analysis of how the proposed regulation would impact areas where partial-benefit dually eligible individuals are not allowed to enroll in D-SNPs or other integrated care options. A commenter that supported inclusion of partial-benefit dually eligible individuals in the 80 percent threshold stated that any CMS decision to exclude such individuals should be accompanied by a reduction in the threshold to capture roughly the same number of D-SNP look-alikes.

Response:

We do not find these commenters' arguments persuasive. First, partial-benefit dually eligible individuals benefit from the requirements that SNPs, including D-SNPs, have a MOC that addresses enrollees' needs and perform periodic HRAs precisely because these

individuals have greater social, functional, and health needs. States, through their contracts with D-SNPs, can enhance these care coordination requirements, including for partial-benefit dually eligible individuals. Second, QMBs without full Medicaid benefits, who constitute roughly half of partial-benefit dually eligible individuals nationally, can benefit when D-SNPs, or the Medicaid managed care plans offered under the same parent company in which these individuals are enrolled, pay providers for Medicare cost sharing under a capitation agreement with the state. Such direct and seamless payment of cost sharing can result in an improved experience for providers serving these individuals, which itself may improve access to care for beneficiaries.

Of course, partial-benefit dually eligible individuals cannot benefit from these features of the D-SNP program if the state D-SNP contract excludes these individuals from enrollment, and we recognize that some states using managed care as a platform for integration exclude partial-benefit dually eligible individuals from D-SNPs and other managed care plans. While some states that are using the D-SNP platform for integration only allow full-benefit dually eligible individuals to enroll in D-SNPs, others allow partial-benefit dually eligible individuals to enroll in separate D-SNP plan benefit packages, facilitating integrated care and seamless provision of benefits for both categories of dually eligible individuals. We think that allowing D-SNP look-alikes to continue to enroll partial-benefit dually eligible individuals with no limit would discourage states from taking this approach.

Comment:

A number of commenters recommended that we set a lower threshold for the percentage of dually eligible enrollees a non-SNP MA plan could have, either in actual or projected enrollment. These commenters expressed concern that a threshold of 80 percent could be “gamed” by MA organizations to keep their dual eligible enrollment just under the ceiling. Some commenters recommended that CMS set the ceiling for dual eligible enrollment at 50 percent, with a commenter citing MACPAC analysis showing faster growth in projected enrollment among MA plans with dual eligible enrollment greater than 50 percent than among those greater than 80 percent. Another commenter recommended a threshold of 60 percent.

Response:

We appreciate the concern that CMS establish a threshold that is effective at curtailing D-SNP look-alikes, which we believe threaten to undermine our ability and that of our state partners to implement the higher integration standards under the BBA of 2018. However, as described in the proposed rule, we believe our proposed 80 percent threshold is reasonable because it far exceeds the share of dually eligible individuals in any given market—no market has more than 50 percent dually eligible beneficiaries

15

—and, therefore, would not be the result for any plan that had not intended to achieve high dually eligible enrollment. The 80 percent threshold also captures almost three-quarters of enrollment in non-SNP plans with more than 50 percent dually eligible enrollees. We will monitor for potential gaming after implementation of this final rule by reviewing plan enrollment data, including the Monthly Membership Report, and consider future rulemaking as needed.

15

June 2019 MedPAC Report to Congress, Chapter 12

at

http://www.medpac.gov/docs/default-source/reports/jun19_ch12_medpac_reporttocongress_sec.pdf?sfvrsn=0.

Comment:

A range of commenters, including MACPAC and MedPAC, supported the proposed 80 percent threshold for projected and actual enrollment. Along with several other commenters, MACPAC and MedPAC urged CMS to monitor levels of MA dual eligible enrollment after implementation to verify that the final rule's requirements remain effective against the proliferation of D-SNP look-alikes.

Response:

We thank the commenters for their support and agree that post-implementation monitoring will be important to determine the effectiveness of the rule. We are finalizing the proposed regulatory language regarding the dual eligible enrollment threshold at paragraphs (d)(1)(ii) and (d)(2)(ii) of this final rule and reiterating here that the threshold includes enrollment of all categories of dually eligible individuals, including partial-benefit and full-benefit dually eligible individuals who are actually enrolled in medical assistance under a state plan under Title XIX.

Comment:

A commenter requested that we clarify that the 80 percent threshold applies at the plan level (that is, the PBP level) and not at the contract, or “H number,” level.

Response:

We reiterate here that the 80 percent threshold in paragraphs (d)(1)(ii) and (d)(2)(ii) applies at the plan level and not at the contract, or “H number,” level.

Comment:

A commenter requested that we specify the data source used to determine the percentage of dually eligible enrollees in a plan subject to the proposed regulation.

Response:

We intend to use data and reports on January enrollment and dual eligible status, such as the January Monthly Membership Report, generated by the MARx system (or a similar or successor report) to determine the percentage of dually eligible enrollees.

Comment:

Several commenters stated that our proposed regulatory language at § 422.514(d), “CMS does not enter into or renew a contract under this subpart for an MA plan,” was confusing since the language references both contracts and plans. These commenters suggested that CMS clarify that it will not approve or renew a specific plan benefit package (PBP), rather than the entire contract, when D-SNP look-alike MA plans meet the 80 percent threshold.

Response:

We appreciate the commenters' request for clarification. When an MA organization enters into a contract with CMS to offer MA products, the MA organization can establish multiple PBPs within that one contract, so long as those products are the same type (for example, all HMO or all PPO). We proposed the language at paragraph (d) to accommodate this reality. When an MA organization has multiple plans under one contract, § 422.514(d), read in combination with contract severability rules at § 422.503(e), allows CMS to sever the D-SNP look-alike from the rest of the contract, in effect allowing CMS to renew only the portion of the contract that does not include the D-SNP look-alike. We believe the language at paragraph (d) accurately describes our intent. Therefore, we are finalizing this regulatory language as proposed. In addition, for those circumstances where the D-SNP look-alike is the only PBP offered in the contract, we are finalizing a new paragraph (f) to clarify that we would consider actions taken consistent with paragraph (d) to warrant special consideration to exempt affected MA organizations from the denial of an application for a new contract or service area expansion pursuant to §§ 422.502(b)(3) and (4), 422.503(b)(6) and (7), 422.506(a)(3) and (4), 422.508(c) and (d), and 422.512(e)(1) and (2). In other words, when CMS declines to enter into or renew a contract consistent with paragraph (d), that action does not preclude the impacted MA organizations from applying for a new MA contract or a service area expansion or its board members or trustees from serving another MA organization.

Comment:

A commenter recommended that CMS consider defining D-SNP look-alikes as MA organizations that offer a D-SNP and an MA-PD plan under the same contract, with the majority (that is, 50 percent or

more) of dually eligible beneficiaries enrolled in the MA-PD plan rather than the D-SNP.

Response:

While we appreciate the comment, we do not understand the rationale for defining D-SNP look-alikes as MA organizations that have a majority of dually eligible individuals enrolled in an MA-PD plan as compared to a D-SNP offered by the same MA organization. We would be concerned that any such policy would undermine our proposal in two ways. First, it would permit certain organizations to maintain D-SNP look-alikes whenever such plans were coupled with D-SNPs with a larger number of dually eligible individuals, even if the D-SNP is in a different geographic area. Second, it would allow D-SNP look-alikes to continue operating as long as the MA organization did not also offer a D-SNP under the same contract. Therefore, we decline to accept this recommendation.

Comment:

A commenter supported CMS' proposal at § 422.514(d)(2) to exempt from the prohibition on D-SNP look-alikes those MA plans that are active for less than one year and with enrollment less than or equal to 200 enrollees at the time of CMS' determination. A few commenters suggested that CMS consider alternative criteria for which new MA plans are exempted from our proposed requirements. A commenter recommended that CMS expand the exemption to plans that had been active three or more years. The commenter believed this change would allow plans to appropriately respond to any unexpected enrollment patterns. Another commenter encouraged CMS to raise the enrollment minimum from 200 enrollees to 500 enrollees to better align with enrollment levels already required for plan viability for Medicare Part D Prescription Drug Plans (PDPs) and reduce administrative burden.

Response:

We appreciate the comments, but we do not find the recommended changes to be persuasive. While the minimum enrollment threshold for low enrollment PDPs is higher at 1,000 beneficiaries, we do not believe PDPs are an apt comparison. We believe a better comparison for D-SNP look-alikes is the minimum enrollment threshold for low enrollment SNPs, which is 100 enrollees for plans in existence for three or more years, as outlined in the 2020 Final Call Letter.

16

We proposed a minimum enrollment standard of 200 to allow some additional flexibility for initial enrollment patterns that may not be representative of the longer term enrollment pattern for the plan. Once the initial enrollment period has passed or the number of enrollees during that first year of operation exceeds 200 enrollees, we believe the enrollment profile accurately reflects whether or not the plan was designed to exclusively enroll dually eligible individuals. Therefore, we are finalizing the D-SNP look-alike exemption criteria in this final rule at paragraph (d)(2)(ii) to exempt those D-SNP look-alikes active for less than one year and with enrollment less than or equal to 200 enrollees at the time of CMS' determination using January enrollment of the current year.

16

https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Announcement2020.pdf.

Comment:

A commenter noted that certain C-SNPs, including ESRD C-SNPs, may enroll a large number of dually eligible individuals and appreciated that we were clear in the proposed preamble that the proposed enrollment threshold for D-SNP look-alikes only applies to non-SNP MA plans.

Response:

We welcome the comment's perspective. As we stated in the proposed rule preamble, we proposed applying this requirement only to non-SNP plans to allow for the predominant dually eligible enrollment that characterizes D-SNPs, I-SNPs, and some C-SNPs by virtue of the populations that the statute expressly permits each type of SNP to exclusively enroll. We are finalizing as proposed at paragraph (d) that the prohibition on D-SNP look-alike contracting does not apply to any specialized MA plan for special needs individuals as defined in § 422.2.

Comment:

A commenter supported our proposed implementation timing at paragraphs (d)(1) and (2) to allow D-SNP look-alikes operating in 2020 to transition enrollees to other MA plans offered by the D-SNP look-alikes' parent organizations for an effective date of January 1, 2021, and to no longer enter into or renew contracts with D-SNP look-alikes for plan year 2022 and subsequent years. A few commenters suggested that CMS finalize any policy on D-SNP look-alikes in time for plan year 2021 bid preparation, preferably by April 2020, and to ensure a smooth transition for enrollees. Some commenters requested that CMS delay implementation of the proposed changes by requesting a one-year delay, a two-year delay, or by specifically requesting that D-SNP look-alikes be permitted to operate until 2023 or later. A commenter recommended CMS employ an incremental phased-in approach so that plans above the 80 percent enrollment threshold are permitted to continue operating for a longer period of time. Another commenter suggested that, if CMS will not allow at least an additional year for implementation, CMS allow for continuation of certain plans for the 2022 plan year where the MA organization can demonstrate a good faith effort to apply for and implement a compliant D-SNP product. Commenters cited various reasons for delaying implementation, including allowing MA organizations additional time to file applications, gain approval of compliant D-SNP products, facilitate a smooth transition of enrollees, and consider continuity of care, nuances of state requirements, and market dynamics that might conflict with the proposed rule.

A commenter noted that the need for a delay is particularly important in states where plans' ability to create D-SNPs is limited, and several commenters emphasized the need for sufficient time to develop new products, especially to meet state requirements for integrated plans. A few commenters indicated that CMS' proposed timeline did not align with the California Advancing and Innovating Medi-Cal (CalAIM) initiative to integrate Medicare and Medicaid through D-SNPs and Medicaid MLTSS plans. These commenters expressed concern that, under the proposed timeline, D-SNP look-alike enrollees in California could face multiple Medicare plan transitions in a short period of time, which would potentially disrupt care and confuse beneficiaries. These commenters believed that a later implementation timeframe would allow D-SNP look-alikes extra time to implement a transparent process by which beneficiaries can select plans and transition with minimal disruption.

A commenter noted the additional time necessary for approval of new D-SNPs and a coordinated transition process is especially important given the COVID-19 pandemic. Another commenter requested that CMS allow at least two years for dually eligible individuals, MA plans, states, and other stakeholders to review policy options and devise and implement viable alternatives to CMS' proposal to achieve compliance.

Response:

We appreciate the comments supporting the proposed implementation timeline, and we agree with many of the comments recommending that we consider delaying the contract limitation for existing D-SNP look-alikes by one year. While we believe the proposed

implementation timeframe remains feasible, we understand that providing an additional year before CMS declines to renew existing D-SNP look-alike plans would give all states and MA organizations more time to consider and collaborate on a more integrated approach and an appropriate transition for enrollees. However, we disagree with the request to delay the proposed dual eligible enrollment thresholds for at least two years. We believe that delaying our implementation of D-SNP non-renewals for one additional year prior will provide sufficient time for MA organizations to develop and seek approval for new plans, coordinate with state integrated care efforts, and facilitate a transparent and smooth transition of beneficiaries.

Therefore, we are finalizing paragraph (d)(2) to provide that CMS will not renew a contract for a D-SNP look-alike starting for plan year 2023 (rather than plan year 2022 as proposed). For plan year 2023, our determination that plans meet the criteria in paragraph (d)(2) would be based on our assessment of the plan's enrollment in January 2022. This will extend by one year the timeline for CMS to non-renew a contract for any non-SNP plan with actual enrollment consisting of 80 percent or more dually eligible enrollees (with the exception of an MA plan active less than one year and with enrollment of 200 or fewer individuals at the time of the determination). Additionally, we are finalizing paragraph (d)(2) with a slight restructuring of using new paragraphs (d)(2)(i) and (ii) for better organization and clarity.

Comments recommending a delay in implementation were based on MA organizations seeking more time to establish new D-SNPs, ensure smooth beneficiary transitions for existing D-SNP look-alike enrollees, and coordinate transitions with state integrated care approaches. Since these expressed reasons for an implementation delay apply to existing D-SNP look-alikes but not to potential new D-SNP look-alikes that are either in contract application or annual bidding stages, we do not believe there is a need to delay the effective date for the prohibition on CMS not entering into contracts for new D-SNP look-alikes. Implementing the timeline for the prohibition on new D-SNP look-alikes as proposed also avoids the need for additional beneficiary transitions.

We are therefore finalizing our proposal in paragraph (d)(1) that CMS does not enter into a contract—beginning with plan year 2022—for a new MA plan that projects in its bid submitted under § 422.254 that 80 percent or more of its total enrollment are enrollees entitled to medical assistance under a state plan under Title XIX. We are finalizing paragraph (d)(1) with a slight restructuring of using new paragraphs (d)(1)(i) and (ii) for better organization and clarity. We are retaining the proposed date in paragraph (d)(1), despite changing the date in paragraph (d)(2), to prevent the creation of new D-SNP look-alikes in 2022 that CMS would subsequently non-renew one year later. We are also finalizing as proposed the timeline on which MA organizations will be authorized to transition enrollees from a D-SNP look-alike to another plan, proposed at paragraph (e).

The changes to our proposed policy give MA organizations with existing D-SNP look-alikes more time to coordinate with state integrated care approaches and transition enrollees in a thoughtful, transparent manner that minimizes the number of beneficiary transitions. This finalized approach also allows D-SNP look-alikes that are ready to transition their enrollees the ability to do so as soon as 2021 and eliminates the proliferation of new D-SNP look-alikes, beginning in 2022. We are available to provide guidance to any MA organization regarding transition to a new or existing D-SNP and encourage MA organizations to monitor their Monthly Membership Reports to determine if they are approaching or above the allowable threshold for dually eligible enrollees in a non-SNP plan in any state where the contracting limitations under this regulation will apply.

Comment:

A commenter noted that if an MA organization has not submitted an application for a D-SNP for contract year 2021, it would not be able to transition D-SNP look-alike enrollees in 2021, as the commenter believed was required under CMS' proposal. This commenter added that some states have not yet clarified which plans will be allowed to offer D-SNPs in specific markets for 2021.

Response:

We agree with the commenter that the D-SNPs that will operate in specific markets in plan year 2021 are not yet known and will not be public information until fall 2020. However, we believe this commenter may have misunderstood the timing of our proposal. We proposed to allow, but not require, D-SNP look-alikes operating in 2020 to transition enrollees for an effective date of January 1, 2021, and we proposed that CMS not enter into or renew contracts with D-SNP look-alikes beginning January 1, 2022. As explained earlier in this section, we are finalizing paragraph (d)(2) to allow an additional year—until plan year 2023—before CMS will decline to renew a contract for an existing MA plan that meets our dual eligible enrollment threshold. Under our original proposal, existing D-SNP look-alikes could, but were not required to, transition their enrollees for a January 1, 2021, or a January 1, 2022 effective date before the contract limitation in paragraph (d)(2) requires action by CMS. With our revisions for the final rule, we are also permitting an option for existing D-SNP look-alikes to transition enrollees for a January 1, 2023 effective date. Under the final provisions of § 422.514(d), CMS will permit any new D-SNP look-alike that begins to operate on January 1, 2021 to continue operating until December 31, 2022. However, an MA organization offering such a new D-SNP look-alike could choose to transition its enrollees as early as January 1, 2022. Further, the transition is not required to be only to a D-SNP, so the MA organization operating an existing D-SNP look-alike does not need to apply to offer a D-SNP.

Comment:

A number of commenters preferred an alternative discussed in the proposed rule that would require an MA organization to transition any dually eligible individuals enrolled in a non-renewing D-SNP look-alike into a D-SNP for which they were eligible if such a plan is offered by the MA organization. Some of these commenters believed D-SNP look-alikes should not be able to transition dually eligible individuals into other MA plans when a more integrated option exists. A commenter supported this alternative since it viewed a requirement to transition dually eligible individuals into D-SNPs as continuing federal efforts to strengthen integration of care for dually eligible individuals. A commenter specifically suggested that CMS prioritize transition of full-benefit dually eligible individuals to D-SNP products and other integrated plans.

Response:

We appreciate the commenters' support for the proposed alternative, and we share the commenters' preference for integrated care. Although we considered an alternative in the proposed rule that would require transitioning any dually eligible individuals into a D-SNP for which they were eligible if such a plan is offered by the MA organization, we opted for proposing a less prescriptive set of transition rules, recognizing a potentially wide array of transition scenarios. We believe that transitioning D-SNP look-alike enrollees to D-SNPs or other plans authorized by CMS to exclusively enroll dually eligible individuals, when one is offered by the

same MA organization or another MA organization that shares the same parent organization as the MA organization, furthers federal goals to integrate care for dually eligible individuals. However, we also expect that some MA organizations may be unable to transition all D-SNP look-alike enrollees into the same MA plan, since the D-SNP look-alike enrollees may not all meet the eligibility criteria for a particular special needs plan offered by the MA organization or another MA organization that shares the same parent organization as the MA organization.

Our proposal included language at paragraph (e)(1) to allow MA organizations to transition D-SNP look-alike enrollees into one or more MA plans that meet the criteria proposed at paragraphs (e)(1)(i)-(iii). While we expect and encourage dually eligible enrollee transitions to D-SNPs or other integrated plans to occur in many cases, even in the absence of a specific federal requirement, we believe that the complexities associated with a regulation that prioritizes or restricts transitions to D-SNPs or other integrated plans that way would outweigh the potential benefits. Thus, we are finalizing paragraph (e) that an MA organization with a non-SNP MA plan determined to meet the enrollment threshold finalized at paragraph (d)(2)(ii) may transition enrollees into another MA-PD plan (or plans), including a D-SNP, if offered by the same MA organization, as long as any such MA-PD plan meets certain proposed criteria finalized at paragraph (e) and, if such transition is to a D-SNP, enrollees meet the D-SNP eligibility criteria.

Paragraph (e) allows MA organizations multiple options. First, an MA organization can choose not to participate in any transition process under paragraph (e), in which case the enrollees in a D-SNP look-alike would be enrolled by default in the original Medicare fee-for-service program, unless the enrollee made an active choice otherwise. Second, an MA organization can choose to transition all enrollees from a D-SNP look-alike to a different plan that meets the criteria in paragraph (e)(1). Third, recognizing that D-SNP look-alike enrollees may not all qualify for the same new plan, paragraph (e) allows an MA organization to transition look-alike enrollees to multiple plans. For example, an MA organization could transition from its D-SNP look-alike: (1) Dually eligible enrollees into a D-SNP for which they were eligible and (2) non-dually eligible enrollees into a non-SNP plan, provided both plans meet the criteria in paragraph (e)(1).

MA organizations must abide by the anti-discrimination provision (based on health status) in section 1852 of the Act and § 422.110 and other applicable law (for example, civil rights law) when exercising the transition authority. These provisions are applicable to the enrollment transitions authorized under § 422.514(e) and would be especially important to consider where an MA organization chooses to transition enrollees into more than one MA plan. With the exception of transitioning an individual into a C-SNP, an MA organization must not choose a particular plan for an enrollee to transition into based on health status, if the enrollee were eligible for more than one plan offered by the MA organization or its parent organization to receive transitioned enrollees. For example, it would be a violation of the anti-discrimination provision if an MA organization transitioned most dually eligible members from a D-SNP look-alike to a D-SNP but transitioned dually eligible members with diabetes to a different qualifying non-SNP MA plan. As necessary, we will monitor use of the transition authority under this rule to ensure compliance with the applicable anti-discrimination provisions and may take other action as warranted to protect beneficiaries.

Finally, we note that we intend to inform state Medicaid agencies of transitions of enrollees from D-SNP look-alikes into D-SNPs in their state so the states are aware for purposes of their own integrated care efforts and communications with stakeholders.

Comment:

A commenter requested that CMS add language that specifically includes MMPs as a plan type eligible to receive beneficiaries who transition from D-SNP look-alikes. Another commenter requested that states be given the flexibility to transition dually eligible look-alike enrollees into a D-SNP or other plan authorized by CMS to exclusively enroll dually eligible individuals, such as an MMP.

Response:

We appreciate these comments. The proposed language did not explicitly name MMPs as a type of MA plan into which D-SNP look-alike enrollees could transition because MMPs are not defined in regulation, and CMS can facilitate enrollments from D-SNP look-alikes into MMPs under separate authority. We clarify that MMPs are a type of plan authorized to exclusively enroll individuals entitled to medical assistance under a state plan under Title XIX. CMS is testing the Financial Alignment Initiative under section 1115A of the Act. Some of the demonstration states in the Financial Alignment Initiative are transitioning individuals from an MA plan, including a D-SNP look-alike, to an MMP through passive enrollment. If an MA organization also sponsors an MMP and desires to transition D-SNP look-alike enrollees to the MMP, we would partner with the state Medicaid agency and use our existing authority and processes to execute the transition. Outside of the context of a demonstration or model test under section 1115A of the Act, however, we do not agree with the commenter's request that states be given the flexibility to transition D-SNP look-alike enrollees. CMS will work directly with D-SNP look-alikes to operationalize the transitions, consistent with other Medicare plan transitions, and ensure states are aware of them.

Comment:

A commenter requested that CMS ensure dually eligible individuals who previously received care through a managed care plan do not default into the original Medicare fee-for-service program. The commenter stated that these individuals should have the opportunity and support necessary to choose a plan that meets their needs and does not disrupt their care.

Response:

We appreciate the commenter's request and agree with the concern. However, we expect the number of D-SNP look-alike enrollees who enroll in the original Medicare fee-for-service program as a result of this rulemaking to be very small. In our proposed Collection of Information (COI) burden estimates, we estimated that only one percent, or 1,808, D-SNP look-alike enrollees would make a Medicare choice other than the MA plan into which they are transitioned by the MA organization. Our estimate was based on our experience with the rate of dually eligible enrollees opting-out of passive enrollment from an MA plan to an MMP offered by the same parent organization as part of the Medicare-Medicaid Financial Alignment Initiative.

Comment:

A commenter requested that CMS clarify whether the proposed transition approach allows transition of D-SNP look-alike enrollees to MA plans of a different plan type, such as from an HMO to a PPO.

Response:

We appreciate the commenter's request for clarification. In the proposed rule, we stated that our proposed transition process was conceptually similar to “crosswalk exception” procedures historically allowed by CMS and proposed at § 422.530 in the proposed rule. We also clarified that, in contrast to the proposed crosswalk exceptions, our proposal would allow the transition process to apply across legal entities

offered by MA organizations under the same parent organization, as well as between SNPs and non-SNP plans. However, it was not our intent to allow for the transition process to apply across product types—for example, HMO to PPO, and vice versa. We are therefore modifying the regulation text to add a new paragraph (e)(1)(iv) to stipulate that an MA plan or plans receiving enrollees under the transition process we are finalizing in paragraph (e) must be of the same plan type (for example, HMO or PPO) as the D-SNP look-alike. An MA organization will not be permitted to transition an individual from a D-SNP look-alike PPO to an MA-PD plan that is an HMO, or vice versa.

Comment:

A commenter appreciated that our proposed transition gives D-SNP look-alikes the ability to transition non-D-SNP members into a D-SNP across legal entities. This commenter requested that CMS allow transitions across legal entities in other situations where it would be in the beneficiary's best interest, such as transitioning a beneficiary with a chronic condition into a C-SNP under a different legal entity.

Response:

The commenter's understanding of our proposed transition approach in § 422.514 in connection with transitioning enrollees out of a D-SNP look-alike is accurate. Our approach, which we are finalizing as proposed at paragraph (e), allows MA organizations to transition D-SNP look-alike enrollees into an MA plan or plans which meet the criteria in paragraph (e)(1) and are offered by the same MA organization or another MA organization that shares the same parent organization as the MA organization. Under our approach, D-SNP look-alike enrollees who are eligible for a C-SNP could be transitioned into a C-SNP that meets the criteria in paragraph (e)(1). With regard to crosswalks or enrollment changes in other contexts, the recommendation is outside of the scope of our proposal for § 422.514; we will take the comment under consideration in connection with the crosswalk proposal (proposed to be codified at § 422.530) in section VI.C. of the proposed rule, which we intend to address in a future final rule.

Comment:

Some commenters encouraged CMS to finalize the proposed policy on D-SNP look-alikes with sufficient advance timing, preferably in advance of the 2021 bid deadline, to allow for enrollee transitions.

Response:

We agree it is important, where possible, to finalize the policy in advance of bid deadlines so that MA organizations can have sufficient time to make decisions for 2021 plan offerings. At paragraph (d), we are finalizing the timing of when we would implement the prohibition on contracting for D-SNP look-alikes with the modifications discussed earlier. D-SNP look-alikes operating in 2020 may choose to transition their enrollees effective January 1, 2021, January 1, 2022, or January 1, 2023, and D-SNP look-alikes operating in 2021 may choose to transition their enrollees effective January 1, 2022 or January 1, 2023. For plan year 2022 and subsequent years, CMS will not enter into a contract with a new MA plan that meets criteria outlined in paragraph (d)(1), and for plan year 2023 and subsequent years, CMS will not renew a contract with a MA plan that meets criteria outlined in paragraph (d)(2). We note that MA organizations will be able, under § 422.514(e) as finalized here, to transition enrollees in D-SNP look-alikes to other plans in advance of CMS non-renewing the D-SNP look-alike PBPs effective January 1, 2023 and January 1 of subsequent plan years.

Comment:

A commenter noted that D-SNPs currently must have executed state Medicaid agency contracts with applicable states and requested that CMS also allow plans to meet this requirement with subcontracts through a directly contracted entity in order to ease transitions for beneficiaries into the most integrated plan possible.

Response:

Consistent with the revised SMAC requirements and the new definition of a D-SNP codified in the April 2019 final rule, a plan must have a direct contract with the state Medicaid agency to meet the definition of a D-SNP at § 422.2. CMS does not consider subcontracting arrangements with Medicaid managed care plans in lieu of SMACs to approve a plan as a D-SNP.

Comment:

A commenter recommended that CMS allow an opt-out process for D-SNP look-alike enrollees being transitioned to a new plan. The commenter indicated that such an opt-out process would preserve beneficiary choice.

Response:

We appreciate the comment and agree that the ability of an enrollee to opt out is important to ensure beneficiary choice. As we discussed in the preamble of the proposed rule, an MA organization with a non-SNP MA plan determined to meet the enrollment threshold in proposed paragraph (d)(2) could transition enrollees into another MA-PD plan (or plans) offered by the same MA organization, as long as any such MA-PD plan meets certain criteria described in the proposed rule and finalized here. Under the transition authority we are finalizing, an MA enrollee could be transitioned from one MA plan offered by an MA organization to another MA-PD plan (or plans) without the enrollee having completed an election form or otherwise indicate their enrollment choice as typically required. However, the timing of these transitions permits the enrollee to make an affirmative choice for another MA plan of his or her choosing during the annual election period (AEP) from October 15 through December 7. Section 422.514(e) ensures this right because the description of the MA plan to which the enrollee would be transitioned must be provided in the ANOC that must be sent consistent with requirements in § 422.111(a), (d), and (e). The ANOC must be sent at least 15 days before the beginning of the AEP. Enrollees would still have the opportunity to choose their own plan during this transition process because of how the proposed transition process would overlap with the annual coordinated election period. If a transitioned enrollee elects to enroll in a different plan during the AEP, enrollment in the plan the enrollee selected would take precedence over the plan into which the MA organization transitioned the enrollee. Transitioned enrollees would also have additional opportunities to select another plan through the Medicare Advantage Open Enrollment Period described in § 422.62(a)(3) from January 1 through March 31. Affected individuals may also qualify for a Special Election Period (SEP), such as the SEP for plan non-renewals at § 422.62(b) or the SEP for dually eligible individuals or Part D low-income subsidy eligible beneficiaries at § 423.38(c)(4). For D-SNP look-alike enrollees who are not transitioned by an MA organization per proposed paragraph (e)(1), the MA organization must send a written notice consistent with § 422.506(a)(2). This requirement will ensure that the content of that notice includes the content sent when a plan is non-renewing (including information about other enrollment options) and that the notice is sent by October 2 (90 days before the end of the year). We believe that the transition process we proposed and are finalizing provides sufficient opportunity for affected enrollees to opt out of their new plan and make a different election. Therefore, as described earlier in this section, we are finalizing the transition process at paragraph (e) largely as proposed with some minor modifications and technical changes described elsewhere in this section.

Comment:

A few commenters expressed concern about the disruption

of aligned Medicare and Medicaid coverage at the point of transition, especially when an individual is enrolled in a Medicaid plan under the same parent organization as the D-SNP look-alike. These commenters recommended that affected beneficiaries be permitted to stay with the MA plan or MA organization to ensure continued integration of Medicare and Medicaid benefits. The commenters believed that such a disruption in ongoing care plans and care teams at the individual level would likely outweigh any additional benefit from the D-SNP integration requirements at the plan level.

Response:

We appreciate the commenters' concerns about potential disruption of aligned coverage. The transition approach proposed and finalized at paragraph (e) permits MA organizations to transition D-SNP look-alike enrollees into another MA plan or plans (including into a D-SNP for enrollees who are eligible for such a plan) offered by that MA organization or by another MA organization that shares the same parent organization. We expect the vast majority of D-SNP look-alike enrollees to be transitioned into a plan offered by the same parent organization as the D-SNP look-alike, which would facilitate the sharing of any enrollee care plans and, in some cases, continued access to the same care teams. Also, as explained earlier in this section, we estimate that only one percent of D-SNP look-alike enrollees will move to the original Medicare fee-for-service program or to another MA plan outside of the same parent organization. To the extent that any enrollees in a D-SNP look-alike are enrolled in a Medicaid managed care plan under the same parent organization as the D-SNP look-alike, the transition authority finalized in paragraph (e) allows similar enrollment in plans offered by the same entity or parent organization.

Comment:

Some commenters requested that CMS consider state-specific integrated care initiatives as it finalizes its transition policy. In particular, a few commenters encouraged CMS to coordinate transition of D-SNP look-alikes with states where integrated care plan initiatives are proposed or underway to avoid unintended confusion or enrollment barriers for dually eligible individuals. A commenter suggested that CMS issue guidance to states about enrollee transitions initiated by D-SNP look-alikes so that transitions of dually eligible individuals are coordinated with any changes that states are proposing in Medicaid enrollment, which would help minimize the number of transitions an individual experiences over a short period of time. A few commenters requested that CMS consider the impacts of any state-imposed moratorium on contracting with D-SNPs in counties where MMPs are offered, citing such a policy in California. A commenter stated that any such moratorium could affect the ability of individuals who have opted out of MMPs or do not meet MMP eligibility criteria to enroll in other integrated plan options. Another commenter noted that D-SNPs are best positioned to meet the unique needs of dually eligible individuals, and the California restrictions on D-SNP enrollment are harmful when dually eligible individuals do not have the flexibility to enroll in a D-SNP. This commenter expressed concern that if CMS moved forward with the proposed policy and D-SNPs remained closed to enrollment, beneficiaries in areas like those in certain California counties would likely enroll in non-SNP MA plans that not only would not offer the care coordination required by D-SNPs, but may impose higher premiums and out-of-pocket expenses.

Response:

We thank the commenters for sharing these concerns. As we stated in our proposed rule preamble, section 164(c)(4) of MIPPA does not obligate states to contract with D-SNPs, which therefore provides states with significant control over the availability of D-SNPs. As discussed earlier, we are finalizing language to delay CMS non-renewal of D-SNP look-alikes to January 1, 2023 and subsequent years, to allow more time for MA organizations and states to coordinate transitions. This delay will also better align the timing of any enrollee transitions from D-SNP look-alikes in California with the current CalAIM implementation timing of January 1, 2023. We do not expect D-SNP look-alike enrollees to experience higher premiums since the transition approach proposed and finalized at paragraph (e) only permits MA organizations to transition D-SNP look-alike enrollees into MA plans that meet certain criteria, including having a combined Part C and Part D premium of $0 for individuals eligible for the premium subsidy for full subsidy eligible individuals described in § 423.780(a).

Comment:

A commenter appreciated CMS giving MA plans the ability to transition enrollees in non-D-SNP look-alikes into D-SNPs across legal entities but expressed concern that there could be disproportionate and unintended impacts to the Members Choosing to Leave the Plan Star Rating measure for contracts with the D-SNP look-alikes where the transition authority is used. This commenter requested that CMS ensure that all proposed D-SNP look-alike transitions are excluded from the Members Choosing to Leave the Plan Star Rating measure because the commenter did not believe this measure, which is representative of enrollee satisfaction, would accurately reflect performance if transitioned members were included in the measure.

Response:

We thank the commenter for raising this issue. The specifications for the Members Choosing to Leave the Plan Star Rating measure allow beneficiaries transitioned as a result of a PBP termination to be excluded from the calculation of this Star Rating measure. The vast majority of D-SNP look-alike enrollees transitioned into another MA plan or plans will be identified in MARx as disenrollment reason code 09, termination of a contract (CMS-initiated), or disenrollment reason code 72, disenrollment due to a plan-submitted rollover. Neither disenrollment reason code 72 nor 09 will be counted toward the calculation of the Members Choosing to Leave the Plan Star Rating measure. As discussed earlier, we estimated one percent of, or 1,808, D-SNP look-alike enrollees would make a Medicare choice other than the MA plan into which they are transitioned. MARx will identify these transitions as disenrollment code 13, disenrollment because of enrollment in another plan, and these transactions will be counted toward calculation of the Members Choosing to Leave the Plan Star Rating measure. Since such a small number of transitioning D-SNP look-alike enrollees would be counted, we do not believe a change to the Star Rating measure specifications is needed.

Comment:

Some commenters requested that CMS only per

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