Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency

Federal RegisterNov 6, 2020

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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 54

[TD 9931]

Office of the Secretary

31 CFR Part 33

RIN 1545-BP97

DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Part 2590

RIN 1210-AB98

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 410, 411, 414, 417, 433, and 510

Office of the Secretary

45 CFR Parts 147, 155, and 182

[CMS-9912-IFC]

RIN 0938-AU35

Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency

AGENCY:

Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (HHS); Internal Revenue Service, Department of the Treasury; Employee Benefits Security Administration, Department of Labor.

ACTION:

Interim final rule with request for comments.

SUMMARY:

This interim final rule with request for comments (IFC) discusses CMS's implementation of section 3713 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which established Medicare Part B coverage and payment for Coronavirus Disease 2019 (COVID-19) vaccine and its administration. This IFC implements requirements in the CARES Act that providers of COVID-19 diagnostic tests make public their cash prices for those tests and establishes an enforcement scheme to enforce those requirements. This rule also establishes an add-on payment for cases involving the use of new COVID-19 treatments under the Medicare Inpatient Prospective Payment System (IPPS). This IFC provides for separate payment for new COVID-19 treatments under the Outpatient Prospective Payment System (OPPS) for the remainder of the PHE for COVID-19 when these treatments are provided at the same time as a Comprehensive Ambulatory Payment Classification (C-APC) service. This rule also interprets and implements the requirement to maintain Medicaid beneficiary enrollment in order to receive the temporary increase in Federal funding in the Families First Coronavirus Response Act (FFCRA). This IFC modifies policies of the Comprehensive Care for Joint Replacement (CJR) model and adds technical changes to accommodate these policy changes. Specifically, we are extending Performance Year (PY) 5 by adding 6 months, creating an episode-based extreme and uncontrollable circumstances COVID-19 policy, providing two reconciliation periods for PY 5, and adding DRGs 521 and 522 for hip and knee procedures. This rule also amends regulations regarding coverage of preventive health services to implement section 3203 of the CARES Act, which shortens the timeframe within which non-grandfathered group health plans and health insurance issuers offering non-grandfathered group or individual health insurance coverage must begin to cover without cost sharing qualifying coronavirus preventive services, including recommended COVID-19 immunizations. This IFC also revises regulations to set forth flexibilities in the public notice requirements and post award public participation requirements for State Innovation Waivers under section 1332 of the Patient Protection and Affordable Care Act (PPACA) during the public health emergency for COVID-19.

DATES:

Effective date:

These regulations are effective on November 2, 2020, except for amendatory instructions 36 and 37, which are effective on January 1, 2021.

Applicability date:

Except as otherwise specified in this paragraph, these regulations are applicable from November 2, 2020, until the end of the public health emergency for COVID-19 as determined by the HHS Secretary. The regulations at 42 CFR 410.57, 410.152, 410.160, 411.15, 414.701, 414.707, 414.900, and 414.904 and at 42 CFR part 510 (other than 42 CFR 510.300(a)(1)(i) and (iii)) are applicable November 2, 2020. Because the requirement at section 6008(b)(3) of the Families First Coronavirus Response Act (FFCRA) is not limited to the duration of the public health emergency for COVID-19, regulations at 42 CFR part 433, subpart G, apply from November 2, 2020, through the end of the last month of the public health emergency for COVID-19 in accordance with section 6008(b)(3) of the Families First Coronavirus Response Act. Regulations at 42 CFR 510.300(a)(1)(i) and (a)(1)(iii) are applicable October 1, 2020.

Comment date:

To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on January 4, 2021.

ADDRESSES:

In commenting, please refer to file code CMS-9912-IFC.

Comments, including mass comment submissions, must be submitted in one of the following three ways (please choose only one of the ways listed):

Electronically.

You may submit electronic comments on this regulation to

http://www.regulations.gov.

Follow the “Submit a comment” instructions.

By regular mail.

You may mail written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-9912-IFC, P.O. Box 8016, Baltimore, MD 21244-8016.

Please allow sufficient time for mailed comments to be received before the close of the comment period.

By express or overnight mail.

You may send written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-9912-IFC, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.

For information on viewing public comments, see the beginning of the

SUPPLEMENTARY INFORMATION

section.

FOR FURTHER INFORMATION CONTACT:

Laura Kennedy, (410) 786-3377, for discussion related to COVID-19 vaccine and administration payment provided under Medicare Part B.

Lina Rashid, (443) 902-2823, or Michelle Koltov, (301) 492-4225, Centers for Medicare & Medicaid Services, Department of Health and Human Services, Services, Kimberly Koch, (202) 622-0854, Department of the Treasury, for issues related to State Innovation Waivers Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency.

Dr. Terri Postma or Rhonda Sheppard, (410) 786-8465, or via email at

COVID19CashPrice@cms.hhs.gov,

for provisions related to Price Transparency for COVID-19 Diagnostic Testing.

Cristina Nigro, (410) 786-7763, for issues related to the Medicare Inpatient Prospective Payment System (IPPS) New COVID-19 Treatments Add-on Payment (NCTAP) for the remainder of the public health emergency.

David Mlawsky, (410) 786-1565, Centers for Medicare & Medicaid Services, Department of Health and Human Services, Elizabeth Schumacher, (202) 693-8335, Employee Benefits Security Administration, Department of Labor, Dara Alderman, (202) 317-5500, Internal Revenue Service, Department of the Treasury, for issues related to Rapid Coverage of Preventive Services for Coronavirus.

Stephanie Bell, (410) 786-0617, for issues related to the temporary increase in Federal Medicaid funding.

Bobbie Knickman, (410) 786-4161; Heather Holsey, (410) 786-0028; Sarah Mioduski, (410) 786-2014 or email

CJR@cms.hhs.gov

for the Comprehensive Care for Joint Replacement Model.

SUPPLEMENTARY INFORMATION:

Inspection of Public Comments:

All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following website as soon as possible after they have been received:

http://regulations.gov.

Follow the search instructions on that website to view public comments.

Background

The United States is responding to an outbreak of respiratory disease caused by a novel coronavirus that was first detected in China and has now been detected in more than 190 countries internationally, and all 50 States, the District of Columbia, and U.S. territories. The virus has been named “severe acute respiratory syndrome coronavirus 2” (“SARS-CoV-2”) and the disease it causes has been named “coronavirus disease 2019” (“COVID-19”).

On January 30, 2020, the International Health Regulations Emergency Committee of the World Health Organization (WHO) declared the outbreak a “Public Health Emergency of International Concern.” On January 31, 2020, pursuant to section 319 of the Public Health Service (PHS) Act (42 U.S.C. 247d), the Health and Human Services Secretary (the Secretary) determined that a public health emergency (PHE) exists for the United States to aid the nation's health care community in responding to COVID-19 (hereafter referred to as the PHE for COVID-19). On March 11, 2020, the WHO publicly declared COVID-19 a pandemic. On March 13, 2020, President Donald J. Trump (the President) declared the COVID-19 pandemic a national emergency. Effective October 23, 2020, the Secretary renewed the January 31, 2020 determination that was previously renewed on April 21, 2020 and July 23, 2020 that a PHE exists and has existed since January 27, 2020.

The Administration is committed to ensuring that Americans have access to a COVID-19 vaccine through Operation Warp Speed, a partnership among components of the HHS, including the Centers for Disease Control and Prevention (CDC), the Food and Drug Administration (FDA), the National Institutes of Health (NIH), and the Biomedical Advanced Research and Development Authority (BARDA). Operation Warp Speed engages with private firms and other Federal agencies, including the Department of Defense (DoD), Department of Agriculture, the Department of Energy, and the Department of Veterans Affairs. Through the work of the Federal Government and the private sector, Operation Warp Speed seeks to accelerate the development, manufacture, and distribution of a COVID-19 vaccine to the American people.

The CDC has reported that some people are at higher risk of severe illness from COVID-19.

These higher-risk categories include:

https://www.cdc.gov/mmwr/volumes/69/wr/mm6915e3.htm.

• Older adults, with risk increasing by age.

• People who have serious chronic medical conditions such as:

++ Obesity.

++ Cardiovascular disease.

++ Diabetes mellitus.

++ Hypertension.

++ Chronic lung disease.

++ Neurologic/Neurodevelopmental disability.

https://www.cdc.gov/mmwr/volumes/69/wr/mm6924e2.htm?s_cid=mm6924e2_w.

++ Immunocompromised individuals.

• Residents of Long Term Care (LTC) facilities, including nursing homes, Intermediate Care Facilities for Individuals with Intellectual and Developmental Disabilities (ICF/IIDs), inpatient psychiatric and substance abuse treatment facilities including Institutions for Mental Disease (IMDs) & Psychiatric Residential Treatment Facilities (PRTFs), assisted living facilities, group homes for individuals with developmental disabilities and board-and-care facilities.

https://www.cdc.gov/coronavirus/2019-ncov/cases-updates/summary.html.

As the health care community implements and updates recommended prevention and control practices, regulatory agencies operating under appropriate waiver authority granted by the PHE for COVID-19 are also working to revise and implement regulations that support these health care community infection prevention and treatment practices. Based on the current and projected increases in the incidence rate of COVID-19 in the US, observed fatalities in the older adult population, and the impact on health care workers at increased risk due to treating special populations, CMS

is reviewing and revising regulations, as appropriate, to offer states, providers, suppliers, and group health plans and health insurance issuers additional flexibilities in furnishing and providing services to combat the PHE for COVID-19 and to address and minimize the unique impact of the PHE for COVID-19 on other regulatory provisions.

Throughout this IFC, unless otherwise specified, “we” and “our” refer to CMS only.

CMS addressed additional policies in three previous interim final rules with comment period (IFCs). The “Medicare and Medicaid Programs; Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency” IFC appeared in the April 6, 2020

Federal Register

(85 FR 19230) with an effective date of March 31, 2020, and the “Medicare and Medicaid Programs, Basic Health Program, and Exchanges; Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency and Delay of Certain Reporting Requirements for the Skilled Nursing Facility Quality Reporting Program” IFC appeared in the May 8, 2020

Federal Register

(85 FR 27550) with an effective date of May 8, 2020. The “Medicare and Medicaid Programs, Clinical Laboratory Improvement Amendments, and Patient Protection and Affordable Care Act: Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency” IFC appeared in the September 2, 2020

Federal Register

(85 FR 54820) with an effective date of September 2, 2020.

This IFC implements a number of measures intended to further the Administration's commitment to ensure every American has timely access to a COVID-19 vaccine without any out-of-pocket expenses, no matter their source of coverage, or whether they are covered at all.

In this IFC, CMS discusses Section 3713 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act which added the COVID-19 vaccine and its administration to section 1861(s)(10)(A) of the Social Security Act (the Act) in the same subparagraph as the flu and pneumococcal vaccines and their administration. It also specified that under Medicare Part B, beneficiaries can receive a COVID-19 vaccination (vaccine and administration) with no cost sharing (deductible or copayment).

In this IFC, HHS and the Departments of Labor and the Treasury (referred to collectively as “the Departments”) clarify certain aspects of coverage of preventive services without cost sharing under the current regulations implementing section 2713 of the Public Health Service (PHS) Act, as added by PPACA and incorporated into the Employee Retirement Income Security Act of 1974 (ERISA) by section 715 of ERISA and into the Internal Revenue Code (the Code) by section 9815 of the Code. The Departments also amend those regulations to implement the unique requirements related to rapid coverage of qualifying coronavirus preventive services under section 3203 of the CARES Act. Specifically, this IFC clarifies that plans and issuers subject to section 2713 of the PHS Act must cover without cost sharing recommended immunizations as well as the administration of such immunizations, regardless of how the administration is billed. This IFC also defines qualifying coronavirus preventive services consistent with the definition provided in section 3203 of the CARES Act and clarifies that plans and issuers subject to section 2713 of the PHS Act must cover recommended immunizations for COVID-19 that are qualifying coronavirus preventive services, even if not listed for routine use on the Immunization Schedules of the CDC. Due to the urgent need to ensure coverage of and access to qualifying coronavirus preventive services, and to ensure that participants, beneficiaries, and enrollees can access qualifying coronavirus preventive services on the expedited basis specified by statute, this IFC also provides that during the PHE for COVID-19, plans and issuers must cover, without cost sharing, qualifying coronavirus preventive services, regardless of whether such services are delivered by an in-network or out-of-network provider. This coverage is required to be provided within 15 business days after the date the United States Preventive Services Task Force (USPSTF) or the Advisory Committee on Immunization Practices of the CDC (ACIP) makes an applicable recommendation relating to a qualifying coronavirus preventive service.

Section 3202(b) of the CARES Act establishes a requirement to publicize cash prices for COVID-19 diagnostic testing during the PHE. For purposes of implementing section 3202(b) of the CARES Act, this IFC adds a new 45 CFR part 182, including (1) definitions of “provider of a diagnostic test for COVID-19” (or “provider”), “COVID-19 diagnostic test,” and “cash price,” and (2) requirements for posting cash price information on the internet, or upon request and through signage (if applicable) if the provider does not have its own website. This IFC gives CMS discretion to take any of the following actions, which generally, but not necessarily, will occur in the following order if CMS determines the provider is noncompliant with section 3202(b)(1) of the CARES Act and the requirements of § 182.40:

• Provide a written warning notice to the provider of the specific violation(s).

• Request that a provider submit and comply with a corrective action plan (CAP) under § 182.60 if its noncompliance is not corrected after a warning notice.

• Impose a civil monetary penalty (CMP) on the provider if the provider fails to respond to CMS' request to submit a CAP or to comply with the requirements of a CAP approved by CMS.

This IFC creates a New COVID-19 Treatments Add-on Payment (NCTAP) under the Inpatient Prospective Payment System (IPPS) for COVID-19 cases that meet certain criteria. We believe that as drugs and biological products become available and are authorized or approved by FDA for the treatment of COVID-19 in the inpatient setting, it is appropriate to increase the current IPPS payment amounts to mitigate any potential financial disincentives for hospitals to provide new COVID-19 treatments during the PHE. Therefore, effective for discharges occurring on or after the effective date of this rule and until the end of the PHE for COVID-19, this IFC establishes the NCTAP to pay hospitals the lesser of (1) 65 percent of the operating outlier threshold for the claim or (2) 65 percent of the amount by which the costs of the case exceed the standard DRG payment, including the adjustment to the relative weight under section 3710 of the CARES Act, for certain cases that include the use of a drug or biological product currently authorized or approved for treating COVID-19. The NCTAP will not be included as part of the calculation of the operating outlier payments.

This IFC provides for separate payment for New COVID-19 Treatments under the Outpatient Prospective Payment System (OPPS) for the remainder of the PHE for COVID-19 when these treatments are provided at the same time as a Comprehensive Ambulatory Payment Classification (C-APC) service. Although we do not expect that many beneficiaries would both receive a primary C-APC service and a drug or biological for treating COVID-19 on the same claim, we nonetheless believe that as drugs or biologicals become available and are authorized or approved for the treatment of COVID-19 in the outpatient setting, it would be appropriate to mitigate any potential financial disincentives for hospitals to provide these new treatments during the PHE for COVID-19. Therefore, effective for services furnished on or after the effective date of this rule and until the end of the PHE, CMS is creating an exception to its OPPS C-APC policy to ensure separate payment for new COVID-19 treatments that meet certain criteria.

This IFC adds a new subpart G, Temporary FMAP Increase During the Public Health Emergency for COVID-19, to 42 CFR part 433, including a new § 433.400. This new provision interprets and implements section 6008(b)(3) of the FFCRA to require states, as a condition for receiving the temporary FMAP increase described at section 6008(a) of the FFCRA, to maintain beneficiary enrollment with specified protections. The terms of new § 433.400 are effective immediately upon display of this rule. CMS' previous interpretation, described in this preamble and in the FAQs cited therein, continues to apply up to the date this rule is effective.

This IFC modifies policies of the Comprehensive Care for Joint Replacement (CJR) model and adds technical changes to accommodate these policy changes. Specifically, we are extending Performance Year (PY) 5 an additional 6 months, creating an episode-based extreme and uncontrollable circumstances COVID-19 policy, providing two reconciliation periods for PY 5, and adding DRGs 521 and 522 for hip and knee procedures.

This IFC provides for flexibilities in the public notice requirements for a State Innovation Waiver (also referred to as a section 1332 waiver) described in section 1332 of PPACA that apply during the PHE for COVID-19. Specifically, this IFC gives the Secretary of HHS and the Secretary of the Treasury the authority to modify, in part, the public notice procedures to

expedite a decision on a proposed waiver request that is submitted or would otherwise become due during the PHE for COVID-19. This IFC also gives these Secretaries the authority to modify, in part, the post-award public notice requirements for an approved waiver request that would otherwise take place or become due during the PHE for COVID-19.

II. Provisions of the Interim Final Rule—Department of Health and Human Services

A. Medicare Coding and Payment for COVID-19 Vaccine

1. Summary

This section of this IFC discusses CMS's implementation of section 3713 of the CARES Act, which established Medicare Part B coverage and payment for a COVID-19 vaccine and its administration. While section 3713(e) of the CARES Act authorizes CMS to implement section 3713 via “program instruction or otherwise,” we believe it is important to clarify in this IFC our interpretation of Section 3713 and ensure the public is aware of our plans to ensure timely Medicare Part B coverage and payment for COVID-19 vaccine and its administration.

2. Background on Medicare Part B Coverage, Payment, Coding and Billing for Vaccines

As required under section 1842(o)(1)(A)(iv) of the Act, the Medicare Part B payment allowance limits for influenza, pneumococcal, and hepatitis B virus (HBV) vaccines are 95 percent of the Average Wholesale Price (AWP) as reflected in the published compendia except where the vaccine is furnished in a hospital outpatient department, Rural Health Clinic (RHC), or Federally Qualified Health Center (FQHC), skilled nursing facility, and home health. Where the vaccine is furnished in these settings, payment for the vaccine is based on reasonable cost.

For preventive vaccines described in section 1861(s)(10) of the Act, Medicare pays for both the vaccine and its administration. Under sections 1833(a)(1)(B), annual Part B deductible and coinsurance amounts do not apply for these vaccinations. In 2020, payment for vaccines is based on the 95 percent of the AWP for a particular vaccine product except where furnished in the settings for which payment is based on reasonable cost. For example, for the 2020-2021 influenza season, payment limits for adult flu vaccines range from about $19 to $61 per adult dose.

https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/VaccinesPricing,

accessed September 29, 2020.

We note that in the Calendar Year 2021 Physician Fee Schedule Proposed Rule (85 FR 50162-50163), CMS proposed to increase the Medicare payment rate for administration of the flu, pneumococcal or HBV vaccine furnished by a physician, non-physician practitioner, or other supplier. CMS will address public comments on the proposal and establish payment rates for administration of these vaccines by a physician, non-physician practitioner, or other supplier in the Calendar Year 2021 Physician Fee Schedule Final Rule, which will be issued later this year. Note that the payment rates for administration of these preventive vaccines established in the CY 2021 Physician Fee Schedule final rule do not apply when the vaccine is furnished by the providers and suppliers paid for administration under reasonable cost. Under the CY 2021 OPPS proposed rule, CMS proposed to assign the HCPCS codes for administration of the influenza, pneumococcal, and hepatitis B vaccines to APC 5691, Level 1 Drug Administration. See Addendum C to the CY 2021 OPPS/ASC proposed rule. Payment amounts for these preventive vaccines and their administration are not adjusted based on product-specific factors.

Generally, providers and suppliers bill for the vaccine and the vaccine administration separately using different codes. For example, many vaccine products are identified by AMA CPT codes in the 90000 series, while others are identified by Level II HCPCS codes, usually beginning with the letter Q. Vaccine administration services are described by the types of codes used to describe professional and/or hospital outpatient services, and are typically identified by a G code for Medicare billing, or by a different AMA CPT code in the 90000 series.

Many providers, professionals, and other suppliers can bill Medicare for the preventive vaccines and vaccine administration they furnish using claims rules similar to those that apply to the other Medicare covered items and services. Additionally, certain entities can enroll under Medicare as mass immunizers to offer and bill Medicare for flu vaccinations, pneumococcal vaccinations, or both to large groups of Medicare beneficiaries under roster billing. A mass immunizer may be enrolled in Medicare as another type of provider or supplier such as a physician, non-physician practitioner, hospital outpatient department, home health agency or skilled nursing facility. An entity or individual that does not otherwise qualify as a Medicare provider or supplier but wishes to furnish mass immunization services may be eligible to enroll in Medicare as a “Mass Immunization Roster Biller” via the Form CMS-855 enrollment application (Medicare Enrollment Application: Clinics/Group Practices and Certain Other Suppliers; OMB Control No.: 0938-0685; Expires 12/21). Aside from meeting all applicable enrollment requirements in 42 CFR part 424, subpart P (and as outlined in CMS Pub. 100-08 (Program Integrity Manual), chapter 10, section 10.2.4), a party enrolled only as a mass immunization roster biller must comply with the following: (1) May not bill Medicare for any services other than pneumococcal pneumonia vaccines (PPVs), influenza virus vaccines, and their administration; (2) must submit claims through the roster biller or centralized biller process; and (3) the enrolled entity or individual must meet all applicable state and local licensure or certification requirements. In other words, an enrolled mass immunizer roster biller may only roster bill Medicare for the services described in the previous sentence. (For more information on the enrollment process for mass immunization roster billers, see

https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/Become-a-Medicare-Provider-or-Supplier

and/or contact your local Part A/B Medicare Administrative Contractor.)

For entities that are already enrolled Medicare providers and suppliers, these entities would contact their MAC if they plan to submit claims as a mass immunizer. Mass immunizers may submit claims for immunizations (vaccine and administration) on roster bills that include a limited set of information on each beneficiary and the vaccine(s) they were given. We note that HBV vaccinations require an assessment of a patient's risk of contracting hepatitis B; they require a physician's order and cannot be roster billed by mass immunizers.

3. Provisions of the CARES Act

Section 3713 of the CARES Act provides for coverage of the COVID-19 vaccine under Part B of the Medicare program without any beneficiary cost sharing. Specifically, section 3713 amended section 1861(s)(10)(A) of the Act to include COVID-19 vaccine and its administration. The amendments made are effective on the date of

enactment and apply to a COVID-19 vaccine beginning on the date that such vaccine is licensed under section 351 of the PHS Act (42 U.S.C. 262). Section 3713(e) of the CARES Act further states that the Secretary may implement the provisions of, and the amendments made by, this section by program instruction or otherwise.

Under section 564 of the Federal Food, Drug, and Cosmetic Act (FD&C Act), the Commissioner of Food and Drugs, as delegated authority by the Secretary, may authorize, during the effective period of a declaration of emergency or threat justifying emergency authorized use, the introduction into interstate commerce of unapproved medical products or unapproved uses of approved medical products to diagnose, treat, or prevent serious or life-threatening diseases or conditions caused by chemical, biological, radiological and nuclear defense (CBRN) threat agents when there are no adequate, approved, and available alternatives. On March 27, 2020, on the basis of his determination of a PHE that has a significant potential to affect national security or the health and security of United States citizens living abroad involving COVID-19, the Secretary declared that circumstances exist justifying the authorization of emergency use of drugs and biological products during the COVID-19 pandemic (85 FR 18250). Pursuant to this declaration, the Commissioner of Food and Drugs, as delegated authority by the Secretary, may issue an emergency use authorization (EUA) for a drug or biological product if, after consultation with officials such as the Director of the CDC and the Director of the NIH, to the extent feasible and appropriate, the Commissioner reasonably concludes that, among other criteria, based on the totality of available scientific evidence, the product may be effective in diagnosing, treating or preventing such disease or condition, and the product's known and potential benefits when used to diagnose, prevent, or treat such disease or condition, outweigh its known and potential risks.

FDA's June 2020 guidance to industry titled “Development and Licensure of Vaccines to Prevent COVID-19”

and October 2020 guidance to industry titled “Emergency Use Authorization for Vaccines to Prevent COVID-19”

state that issuance of an EUA may be appropriate for a COVID-19 vaccine, for which there is adequate manufacturing information, once studies have demonstrated the safety and effectiveness of the vaccine in a clear and compelling manner, but before the submission and/or formal review of the biologics license application for the vaccine. These guidance documents state that in the case of vaccines being developed for the prevention of COVID-19, any assessment regarding an EUA would be made on a case by case basis considering the target population, the characteristics of the product, the preclinical and human clinical study data on the product, and the totality of the relevant available scientific evidence. The FDA has made clear in its October 2020 guidance to industry that for a COVID-19 vaccine for which there is adequate information to ensure its quality and consistency, issuance of an EUA would require a determination by FDA that the vaccine's benefits outweigh its risks based on data from at least one well-designed Phase 3 clinical trial that demonstrates the vaccine's safety and efficacy in a clear and compelling manner. Because the vaccine would be intended for administration to healthy people as a prophylactic measure, there must be a higher degree of certainty about the risks and benefits of the product than needed for EUAs for medical products intended for treatment of sick patients.

Available at

https://www.fda.gov/regulatory-information/search-fda-guidance-documents/development-and-licensure-vaccines-prevent-covid-19,

accessed September 30, 2020.

Available at

https://www.fda.gov/regulatory-information/search-fda-guidance-documents/emergency-use-authorization-vaccines-prevent-covid-19,

accessed October 9, 2020.

There are no historical examples in which Medicare has covered vaccines for which an EUA was issued by FDA. We recall that during the PHE involving the 2009 H1N1 flu outbreak,

Influenza A (H1N1) 2009 Monovalent Vaccine was approved by the FDA on September 15, 2009 on the basis of a supplement to the applicant's biologics license application (BLA) for influenza virus vaccine.

In our review of PHEs, there are no circumstances in which a vaccine product authorized for emergency use has been covered or paid for by Medicare.

Available at

https://www.phe.gov/emergency/news/healthactions/phe/Pages/h1n1.aspx,

accessed on October 14, 2020.

Available at

https://www.fda.gov/vaccines-blood-biologics/vaccines/influenza-h1n1-2009-monovalent-vaccine-novartis-vaccines-and-diagnostics-limited,

accessed October 14, 2020.

As discussed previously, the CDC recognizes that the categories of people at higher risk of severe illness from COVID-19 include older adults (with risk increasing by age), people with chronic conditions such as cardiovascular disease or diabetes, and residents of long-term care facilities.

The Medicare population includes many beneficiaries who are in these higher-risk categories, primarily because most, (over 85 percent)

Medicare beneficiaries are over 65 years old. Given the high risk nature of the Medicare population, the circumstances of this nationwide pandemic, and FDA's guidance that an EUA may be appropriate for a COVID-19 vaccine prior to its licensure if there is a demonstration of safety and efficacy in a clear and compelling manner from at least one Phase 3 clinical trial, we believe it is appropriate for Medicare to consider any EUA under section 564 of the FD&C Act issued for a COVID-19 vaccine during the PHE to be tantamount to a license under section 351 of the PHS Act for the sole purpose of considering such a vaccine to be described in section 1861(s)(10)(A) of the Act. That is, even though section 3713 of the CARES Act refers to a COVID-19 vaccine “licensed under section 351 of the PHS Act,” CMS could consider any vaccine for which FDA issued an EUA during the PHE, when furnished consistent with terms of the EUA, to be eligible for Medicare coverage and payment. We consider our interpretation of section 3713(d) of the CARES Act to be consistent with Congress' intent to provide for Medicare coverage without deductible or coinsurance of any COVID-19 vaccine (and its administration) that FDA has authorized to be introduced into interstate commerce, which would be the case both for a vaccine for which emergency use is authorized under section 564 of the FD&C Act and for a vaccine that is licensed under section 351 of the PHS Act. Our interpretation also would be consistent with Congress' general intent in the CARES Act and other recent legislation to provide for rapid coverage of COVID-19 vaccines.

https://www.cdc.gov/coronavirus/2019-ncov/need-extra-precautions/index.html?CDC_AA_refVal=https%3A%2F%2Fwww.cdc.gov%2Fcoronavirus%2F2019-ncov%2Fneed-extra-precautions%2Fpeople-at-increased-risk.html.

https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Beneficiary-Snapshot/Downloads/Bene_Snaphot.pdf.

We note that section 3713(e) of the CARES Act permits CMS to implement the changes made by that section through “program instruction or otherwise,” and we intend to issue any necessary instructions for Medicare providers and suppliers expediently in order to ensure beneficiary access to COVID-19 vaccines as quickly as possible.

4. Implementation and Methods of Coding and Payment for COVID-19 Vaccine and Administration

Section 3713 of the CARES Act added the COVID-19 vaccine and its administration to section 1861(s)(10)(A) of the Act in the same subparagraph as the flu and pneumococcal vaccines and their administration. As such, the Medicare allowed amount for the COVID-19 vaccine will also be 95 percent of the average wholesale price (or reasonable cost, for example under OPPS).

Because COVID-19 vaccines are being developed rapidly and systems to operationalize payment of administration will need to be implemented quickly to ensure beneficiary access, we also recognize the need to establish coding and payment for COVID-19 vaccine and administration under Medicare Part B. Because there are many product-specific factors that are still unknown, including the possibility of differential costs associated with each COVID-19 vaccine product and storage and administration requirements, we anticipate establishing a unique administration code for each COVID-19 vaccine product. We believe it is imperative that coding and payment be in place as soon as possible after COVID-19 vaccines become available. We anticipate establishing specific coding and payment rates through technical direction to the MACs, including instructions to make this information available to the public. We also anticipate posting information on coding, payment, and billing for COVID-19 vaccines and vaccine administration on the CMS website. This approach will maintain public transparency while allowing CMS to pay appropriately for particular vaccines and vaccine administration as quickly as practicable once they are authorized or licensed for use by FDA. We anticipate that payment rates for the administration of other Part B preventive vaccines and related services, such as the flu and pneumococcal vaccines, would serve to inform the payment rates for administration of COVID-19 vaccines.

CMS ordinarily establishes Medicare payment rates for particular items and services, through notice-and-comment rulemaking. Because of the unique circumstances of the PHE for COVID-19 pandemic and the anticipated, specific conditions for the entry of COVID-19 vaccine products into the marketplace, we believe it is necessary to initially dispense with the rulemaking process in order to make Medicare payment available in a timely manner to ensure widespread access to the new vaccines. Therefore, as soon as practicable after the authorization or licensure of each COVID-19 vaccine product by FDA, we will announce the interim coding and a payment rate for its administration (or, in the case of the OPPS, an APC assignment for each vaccine product's administration code), taking into consideration any product-specific costs or considerations involved in furnishing the service. Such consideration may be necessary, specifically for COVID-19 vaccines in the context of the pandemic, in order to ensure that health care providers can offer prompt access to vaccination for a large number of people as quickly as possible. We then anticipate addressing coding and payment rates for administration of the COVID-19 vaccine products through future notice-and-comment rulemaking. In other words, the approach to payment and coding described in this IFC will ensure efficient and timely beneficiary access to COVID-19 vaccine products, that for public health purposes may need to be administered to a large number of people during a compressed period of time, until further rulemaking, such as annual rulemaking under the Medicare Physician Fee Schedule, is possible.

Given that the COVID-19 vaccine and administration was added to the same subparagraph as the flu and pneumococcal vaccines and administration under section 1861(s)(10)(A) of the Act, we believe it would be appropriate to use billing processes for COVID-19 vaccinations that are similar to those in place for flu and pneumococcal vaccinations. With the pressing need to ensure broad access to a COVID-19 vaccine, it would be appropriate to allow COVID-19 vaccinations to be provided through the mass immunization and roster billing process that is in place for flu and pneumococcal vaccinations. We recognize that, at this time, there is very limited detailed information on COVID-19 vaccines and their administration and that information on these vaccines is likely to evolve as they reach the market and then experience with them is gained. At this time, we believe that the COVID-19 vaccines will be administered as one or two parenteral doses, thus we believe that using the Part B influenza vaccination approach that permits certain providers and mass immunization to bill for the product strikes a balance between the need to vaccinate many millions of Medicare patients promptly and the lack of detailed information about particular COVID-19 vaccine products. Although influenza vaccination is generally only given once each flu season, CMS has contemplated how to respond to pandemics where payment for additional doses of an influenza vaccine during a season may be required. Thus, a two dose initial COVID-19 vaccination schedule can be accommodated under this general approach. Also, the CARES Act permits the Secretary to implement the provisions of, and the amendments made by, section 3713 by program instruction or otherwise. As information about vaccine products becomes available, we anticipate that updated information, for example information concerning additional doses after initial vaccination, applicability of specific vaccine products to subsets of our beneficiary population, or updates about billing would be disseminated primarily by program instruction.

As part of this IFC, we are updating the following regulations:

• At § 410.57, Pneumococcal vaccine and flu vaccine, we are amending the section heading and adding a new paragraph to reference COVID-19 vaccine.

• At § 410.152, Amounts of payment, we are amending § 410.152(l)(1) to include the COVID-19 vaccine in the list of vaccines for which Medicare Part B pays 100 percent of the Medicare payment amount.

• At § 410.160, Part B annual deductible, we are amending § 410.160(b)(2) to include the COVID-19 vaccine in the list of vaccines that are not subject to the Part B annual deductible and do not count toward meeting that deductible.

• At § 411.15, Particular services excluded from coverage, we are amending § 411.15(e) to add an exception for COVID-19 vaccinations to the general exclusion of coverage for immunizations.

• At § 414.701, Purpose, we are amending the list of statutorily covered drugs to include the COVID-19 vaccine.

• At § 414.707, Basis of Payment, we are amending § 414.707(a)(2)(iii) to include the COVID-19 vaccine in the list of vaccines with a payment limit calculated using 95 percent of the average wholesale price.

• At § 414.900, Basis and scope, we are amending § 414.900(b)(3) to include the COVID-19 vaccine in the list of statutorily covered drugs.

• At § 414.904, Average sales price as the basis for payment, we are amending § 414.904(e)(1) to include the COVID-19 vaccine in the list of vaccines with payment limits calculated using 95 percent of the average wholesale price.

5. Medicare Advantage and Cost Plans

Under sections 1852(a)(1) and 1876(c)(2) of the Act, Medicare Advantage (MA) plans and cost plan organizations must cover all benefits covered under Part A and Part B of Original Medicare, subject to limited exclusions. Therefore, all MA plans and cost plans must cover a COVID-19 vaccine and its administration described in section 1861(s)(10)(A) of the Act. As described previously, the interpretation of section 3713 of the CARES Act adopted in this rule will result in Part B coverage of a COVID-19 vaccine for which FDA issues an EUA during the PHE, and administration of that vaccine when furnished consistent with terms of such EUA. As amended by section 3713 of the CARES Act, section 1852(a)(1)(B)(iv)(VI) of the Act prohibits MA plans from using cost sharing that exceeds the cost sharing imposed under original Medicare for a COVID-19 vaccine and its administration when MA coverage is provided because they are covered under Part B under section 1861(s)(10)(A) of the Act.

Section 1852(a)(5) of the Act and 42 CFR 422.109 provide that when a National Coverage Determination (NCD) or legislative change in benefits, such as the addition of Part B coverage of a COVID-19 vaccine and its administration, results in significant costs that have not been included in the capitation payments made to MA plans, coverage of the new benefit will be provided through the Medicare FFS program until the capitation payments take the new significant costs into account. The payment rates for MA organizations for contract years 2020 and 2021 have been set without including the costs for a COVID-19 vaccine and its administration. Therefore, if coverage of a COVID-19 vaccine and its administration during that period results in significant costs, section 1852(a)(5) of the Act and § 422.109 will apply to require Medicare FFS coverage of the vaccine and its administration.

The cost projection used for the determination whether the legislative change results in significant costs is based on an analysis by the Chief Actuary of CMS of the actuarial costs associated with a NCD or the legislative change in benefits and compared to the thresholds specified in the regulation at § 422.109. This analysis is generally performed once a Medicare FFS payment rate is determined for the service. If the estimated cost of an NCD or legislative change represents at least 0.1 percent of the national average per capita costs or the average cost of furnishing a single service exceeds the cost threshold established in using the formula in § 422.109(a), it is considered a significant cost and the FFS Medicare program provides coverage for the service until the costs are factored into Medicare Advantage payments. Therefore, this legislative change would be subject to an analysis whether the new benefit results in significant costs. The significant cost threshold will be met assuming that the projected cost per-beneficiary-per-year is greater than approximately $13, which is 0.1 percent of the national average per capita costs. If the threshold is reached, Medicare beneficiaries enrolled in MA plans will receive coverage of the COVID-19 vaccine and its administration through the Medicare FFS program and would be able to access the COVID-19 vaccine, without cost sharing, at any FFS provider or supplier that participates in Medicare and is eligible to bill under Part B for vaccine administration, including those enrolled in Medicare as a mass immunizer or a physician, non-physician practitioner, hospital, clinic, or group practice.

Section 3713 of the CARES Act added Medicare Part B coverage for a COVID-19 vaccine and its administration and provides that MA plans must cover the new benefit without cost sharing. While section 1876(c)(2) of the Act ensures that enrollees in Medicare cost plans will have coverage of a COVID-19 vaccine and its administration, section 3713 of the CARES Act did not amend section 1876 of the Act to provide similar cost-sharing protections for enrollees in cost plans who receive the vaccine from an in-network provider. Nor is there a provision affirmatively relieving cost plans of the obligation to cover the new Part B benefit. Because the Medicare FFS program covers Part A and Part B items and services furnished to cost plan enrollees by out-of-network health care providers that participate in the Medicare FFS program, cost plan enrollees will receive the COVID-19 vaccine and its administration without cost sharing when they go to a health care provider that is out of the cost plan's network.

See

42 CFR 417.436(a)(5) and 417.448. However, there is no requirement for cost plans to cover the COVID-19 vaccine and its administration without cost sharing (that is, with cost sharing that is the same as original Medicare) when the vaccine is furnished by an in-network health care provider. Many enrollees may seek the COVID-19 vaccine from the health care provider they usually see or from whom they receive most of their health care; that provider is likely to be in-network with the cost plan. CMS believes that it is necessary and appropriate to ensure that cost plan enrollees, like other Medicare beneficiaries, are provided access to the COVID-19 vaccine and its administration without cost sharing. Section 1876(i)(3)(D) of the Act authorizes us to impose “other terms and conditions not inconsistent with [section 1876]” that are deemed “necessary and appropriate.” Requiring cost plans to comply with the same cost sharing protections available to Medicare beneficiaries in the FFS program and enrolled in Medicare Advantage plans is necessary and appropriate, so that cost is not a barrier for beneficiaries to get the vaccine, particularly during the public health emergency when ensuring access is of paramount importance. To ensure that cost plan enrollees also do not pay cost sharing for the COVID-19 vaccine and its administration when received from an in-network provider at least until the end of the public health emergency for COVID-19, we are adding a new paragraph (e)(4) to § 417.454 to require section 1876 cost plans to cover without cost sharing the COVID-19 vaccine and its administration described in section 1861(s)(10)(A) of the Act without cost sharing for the duration of the PHE for the COVID-19 pandemic, specifically the end of the emergency period defined in paragraph (1)(B) of section 1135(g) of the Act, which is the PHE declared by the Secretary on January 31, 2020 and any renewals thereof.

B. COVID-19 Vaccine Coverage for Medicaid, CHIP, and BHP Beneficiaries

Under section 6008 of the FFCRA, states' and territories' Medicaid programs may receive a temporary 6.2 percentage point increase in the Federal Medical Assistance Percentage (FMAP). Under section 6008(b)(4) of the FFCRA, to receive that increase, a state or territory must cover COVID-19 testing services and treatments, including vaccines and the administration of such vaccines, for Medicaid enrollees without cost sharing. That coverage is required during any quarter for which the state or territory claims the temporary FMAP increase under FFCRA section 6008, and the FMAP increase is available through the end of the quarter in which the PHE for COVID-19 ends. CMS is not aware of any states or territories not currently claiming this temporary FMAP increase, or of any state or territory that intends to cease claiming it. Accordingly, Medicaid coverage of a COVID-19 vaccine and its administration, without cost-sharing, is expected to be available for most

Medicaid beneficiaries through the end of the quarter in which the PHE for COVID-19 ends. For the remainder of this section of preamble, references to “state” or “states” in discussions of Medicaid policy also include the territories.

To meet the requirement in FFCRA section 6008(b)(4) to cover a COVID-19 vaccine and its administration without cost sharing, states must compensate Medicaid providers with a vaccine administration fee or reimbursement for a provider visit during which a vaccine dose is administered, even if the vaccine dose is furnished to the provider at no cost.

There are some very limited circumstances in which the FFCRA section 6008(b)(4) coverage requirements would not apply. CMS has not interpreted section 6008(b)(4) of the FFCRA to require that state Medicaid programs cover the services described in that provision for individuals whose Medicaid eligibility is limited by statute to only a narrow range of benefits that would not otherwise include these services. FFCRA section 6008(b)(4) did not amend the varying benefits packages that are required for different Medicaid eligibility groups under section 1902(a)(10) of the Act. In some cases, beneficiaries' coverage is limited by statute to a very narrow range of benefits and services that typically would not include services described in FFCRA section 6008(b)(4), such as COVID-19 vaccines or their administration (see,

e.g.,

the limitations described in the matter following section 1902(a)(10)(G) of the Act for some Medicaid eligibility groups). Nor did FFCRA section 6008(b)(4) direct states to amend existing demonstration projects under section 1115(a) of the Act, through which states may offer eligibility to groups not otherwise eligible under title XIX of the Act, and can opt to provide these groups with limited benefits. Moreover, after FFCRA was enacted, in section 3716 of the CARES Act (Pub. L. 116-136), Congress defined eligibility for the COVID-19 testing-only optional Medicaid eligibility group described in section 1902(a)(10)(A)(ii)(XXIII) of the Act in a manner that recognized that certain limited-benefit Medicaid eligibility groups are “uninsured,” and therefore eligible to receive coverage for COVID-19 testing under that provision, without referring to or acknowledging the FFCRA section 6008(b)(4) COVID-19 testing coverage requirement. See section 1902(ss) of the Act. Accordingly, CMS does not interpret FFCRA section 6008(b)(4) to require states to provide COVID-19 testing and treatment services without cost-sharing, including vaccines and their administration, to eligibility groups whose coverage is limited by statute or under an existing section 1115 demonstration to a narrow range of benefits that would not ordinarily include this coverage, such as groups that receive Medicaid coverage only for COVID-19 testing, family planning services and supplies, or tuberculosis-related services. The COVID-19 Claims Reimbursement to Health Care Providers and Facilities for Testing and Treatment of the Uninsured Program (COVID-19 Claims Reimbursement program) administered by the Health Resources and Services Administration (HRSA) is available for reimbursement of a COVID-19 vaccine and vaccine administration costs for individuals who would not receive Medicaid coverage for a COVID-19 vaccine or its administration because their Medicaid coverage is for limited benefit packages only.

After the requirements in section 6008(b)(4) of FFCRA are no longer in effect in a state, the state must cover COVID-19 vaccines recommended by the ACIP, and their administration, for several populations under existing statutory and regulatory authority. All Medicaid-enrolled children under the age of 21 eligible for the Early and Periodic Screening, Diagnostic and Treatment (EPSDT) benefit must receive ACIP-recommended vaccines pursuant to section 1905(r)(1)(A)(i) and (B)(iii) of the Act.

Coverage of ACIP-recommended vaccines without cost-sharing is required for any adult populations who receive coverage through Alternative Benefit Plans (ABPs), including the adult expansion population described at section 1902(a)(10)(A)(i)(VIII) of the Act, pursuant to section 1937(b)(5) of the Act, 42 CFR 440.347(a), and 45 CFR 156.115(a)(4) and 147.130. Some states may also elect to receive a 1 percentage point FMAP increase for their expenditures on certain services, in return for covering ACIP-recommended vaccines and their administration without cost-sharing for adults under section 1905(a)(13) of the Act, pursuant to section 4106 of PPACA (as codified in section 1905(b) of the Act). Children through age 18 who are eligible for Medicaid (funded through both titles XIX and XXI), as well as children who are uninsured, who are not insured with respect to the vaccine and who are administered pediatric vaccines by a federally qualified health center (FQHC) or rural health clinic, or who are Indians (as defined in section 4 of the Indian Health Care Improvement Act) receive ACIP-recommended vaccinations through the Vaccines for Children (VFC) program, described at section 1928 of the Act. The Centers for Disease Control and Prevention (CDC) will determine if COVID-19 vaccines will be included in the VFC program. Coverage of the administration of a VFC-covered vaccine for Medicaid-eligible children would be provided by the state Medicaid program.

Medicaid enrolled children up to the age of 18 are generally exempt from cost sharing. For children age 19 or 20 cost sharing for an ACIP-recommended vaccine may apply, outside of an Alternative Benefit Plan.

After the FFCRA section 6008(b)(4) requirements are no longer in effect in a state, the state also has the option to cover a COVID-19 vaccine and its administration for other eligibility groups. Such groups include the parent/caretaker relative eligibility group at 42 CFR 435.110, eligibility groups for individuals who are age 65 or older or who are eligible on the basis of blindness or a disability, and pregnant women enrolled under 42 CFR 435.116 who are eligible for full state plan benefits. If a state elects to cover a COVID-19 vaccine and its administration for any one of these groups, it must do so for all of them, except that with respect to the pregnant women group described in 42 CFR 435.116, per 42 CFR 440.250(p) states can cover a vaccine and its administration as a pregnancy-related service while not providing the same coverage for the other eligibility groups. Outside of the period in which FFCRA section 6008(b)(4) applies to a state, the state has the option to apply cost sharing to coverage of a COVID-19 vaccine or its administration unless the beneficiary is in an eligibility group that is exempt from cost-sharing under section 1916 or section 1916A of the Act and regulations at 42 CFR 447.56 (for example, most children under age 18, most pregnant women, most children in foster care, individuals receiving services in an institution that already had their medical assistance reduced by their income, individuals receiving hospice care, and Indians who are currently receiving or have ever received an item or service furnished by an Indian health care provider or through referral under contract health services).

After the FFCRA section 6008(b)(4) requirements are no longer in effect in a state, a COVID-19 vaccine and its administration could also be a covered service for many Medicaid eligibility groups when furnished by a participating provider under certain Medicaid benefits that are mandatory for many Medicaid eligibility groups,

depending on how the state has defined the amount, duration, and scope parameters of the benefit. Because inpatient and outpatient hospital services, physician services, and Federally Qualified Health Center and Rural Health Clinic services are mandatory Medicaid benefits for the categorically needy populations, COVID-19 vaccine administration could be a covered service for many Medicaid beneficiaries when provided by these participating providers, at state option. States might also cover COVID-19 vaccine administration for beneficiaries under various optional state plan benefits, such as the “other licensed practitioner” benefit described in section 1905(a)(6) of the Act and 42 CFR 440.60, or the “preventive services” benefit described in section 1905(a)(13) of the Act and 42 CFR 440.130(c). However, states would generally not have the option to cover a COVID-19 vaccine or its administration for any group whose coverage is limited by statute or under a current section 1115 demonstration to a narrow range of benefits that would not ordinarily include vaccine coverage. As described above, the COVID-19 Claims Reimbursement program administered by HRSA may be used to cover COVID-19 treatment, including the administration of vaccines, for such limited-benefit beneficiaries. In addition, a state might have the option, subject to Federal approval, to propose or amend a section 1115 demonstration to include this coverage for a group that would not otherwise be entitled to receive it under the statute or under current section 1115 authority.

The FFCRA section 6008(b)(4) requirement does not apply to separate CHIPs.

In separate CHIPs, states must cover ACIP-recommended vaccines and their administration for all children under age 19 with no cost sharing. See section 2103(c)(1)(D) and (e)(2) of the Act, and 42 CFR 457.410(b)(2) and 457.520(b)(4). Coverage of uninsured pregnant women in a separate CHIP is optional. Currently, the states that cover pregnant women in a separate CHIP include all ACIP-recommended vaccines with no cost sharing in this coverage. However, current CMS interpretation is that this vaccine coverage is not required.

In states that use title XXI funding to expand Medicaid eligibility for children, the FFCRA section 6008(b)(4) requirements apply to these title XXI funded Medicaid beneficiaries in the same way that they do to all other Medicaid beneficiaries.

The FFCRA section 6008(b)(4) requirement also does not apply to the Basic Health Program (BHP). Minnesota and New York are the only states that currently operate a BHP. BHP coverage must include benefits in at least the ten essential health benefits described in section 1302(b) of the PPACA and must comply with the Exchange's cost-sharing protections,

which includes providing all ACIP recommended vaccines without cost sharing. See sections 1331(a)(1), (a)(2)(B) and (b)(2) of PPACA, and 42 CFR 600.405(a) and 600.510(b).

As explained in rulemaking, this includes the prohibition on cost sharing for preventive health services. See the Basic Health Program: State Administration of Basic Health Programs; Eligibility and Enrollment in Standard Health Plans; Essential Health Benefits in Standard Health Plans; Performance Standards for Basic Health Programs; Premium and Cost Sharing for Basic Health Programs; Federal Funding Process; Trust Fund and Financial Integrity; Final Rule. 79 FR 14111 at 14128 (March 12, 2014).

Section 600.510(b) cross-references 45 CFR 147.130, which establishes requirements related to the coverage of preventive health services for BHP. For ABPs, 42 CFR 440.347 cross-references 45 CFR part 156, which incorporates 45 CFR 147.130, which establishes requirements related to the coverage of preventive health services. Consistent with the changes to 45 CFR 147.130 made through this rulemaking, during the COVID-19 public health emergency BHP plans and Medicaid ABPs must provide coverage for and must not impose any cost-sharing for “qualifying coronavirus preventive services,” including a COVID vaccine, regardless of whether the vaccine is delivered by an in-network or out-of-network provider. For details on the coverage requirements for “qualifying coronavirus preventive services” and the updates to 45 CFR 147.130 see section III of this IFC.

Lastly, we note that CMS intends this section only to be a description of current policy and existing law, with the exception noted directly above for BHP and Medicaid ABPs, and that CMS is not making any changes to its current policy or regulatory requirements in this rule.

C. Price Transparency for COVID-19 Diagnostic Tests

1. Introduction

Robust COVID-19 diagnostic testing is fundamental to the Federal Government's strategy for controlling the spread of COVID-19.

In recognition of the importance of COVID-19 diagnostic testing, the Federal Government has taken several steps to reduce financial barriers to testing for both insured and uninsured individuals, including the following:

The White House, CDC and FDA document: Testing Overview, Opening Up America Again. Available at:

https://www.whitehouse.gov/wp-content/uploads/2020/04/Testing-Overview-Final.pdf.

• The FFCRA was enacted on March 18, 2020. Section 6001 of the FFCRA generally requires group health plans and health insurance issuers offering group or individual health insurance coverage to provide coverage for certain items and services, including

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diagnostic testing products for the detection of SARS-CoV-2, the virus that causes COVID-19, or the diagnosis of COVID-19 (referred to herein collectively as COVID-19 diagnostic tests) when those items or services are furnished on or after March 18, 2020, and during the PHE for COVID-19. Plans and issuers must provide this coverage without imposing any cost-sharing requirements (including deductibles, copayments, and coinsurance) or prior authorization or other medical management requirements. Related items and services include those provided during urgent care center visits, in-person and telehealth office visits, and emergency room visits that result in an order for or administration of an

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diagnostic product, to the extent that such items and services relate to the furnishing or administration of a COVID-19 diagnostic test, or to the evaluation of an individual for purposes of determining the need of the individual for a COVID-19 diagnostic test. Section 3201 of the CARES Act, enacted on March 27, 2020, amended section 6001 of the FFCRA to include a broader range of diagnostic tests that plans and issuers must cover without any cost-sharing requirements or prior authorization or other medical management requirements.

• The COVID-19 Claims Reimbursement to Health Care Providers and Facilities for Testing and Treatment of the Uninsured Program provides reimbursements on a rolling basis directly to eligible providers for claims that are attributed to the testing and treatment of COVID-19 for certain uninsured individuals. The program is funded via (1) the FFCRA Relief Fund, which includes funds received from the Public Health and Social Services Emergency Fund, as appropriated in the FFCRA and the Paycheck Protection Program and Health Care Enhancement Act (PPPHCEA) (Pub. L. 116-139), which each appropriated funding to reimburse providers for conducting COVID-19 testing for the uninsured, and (2) the Provider Relief Fund, as appropriated in the CARES Act and the PPPHCEA.

FAQs for COVID-19 Claims Reimbursement to Health Care Providers and Facilities for Testing and

Treatment of the Uninsured. Available at

https://www.hrsa.gov/coviduninsuredclaim/frequently-asked-questions.

• HHS has partnered with pharmacies, retail companies, and health centers nationwide to make no-cost COVID-19 diagnostic testing available to Americans in communities across the country.

Information on Community-Based Testing Sites for COVID-19 can be found at

https://www.hhs.gov/coronavirus/community-based-testing-sites/index.html.

Congress has also taken steps to facilitate the reimbursement for COVID-19 diagnostic testing and to ensure that pricing for performance of such testing is publicly available. Specifically, section 3202(a) of the CARES Act requires group health plans and issuers providing coverage for items and services described in section 6001(a) of the FFCRA to reimburse any provider of a COVID-19 diagnostic test an amount that equals the negotiated rate, or, if the plan or issuer does not have a negotiated rate with the provider, the cash price for such service that is listed by the provider on a public website. The plan or issuer may also negotiate a rate with the provider that is lower than the cash price. More information related to health insurance issuer and group health plan coverage and reimbursement for COVID-19 diagnostic testing is available at

https://www.cms.gov/files/document/FFCRA-Part-42-FAQs.pdf

and

https://www.cms.gov/files/document/FFCRA-Part-43-FAQs.pdf.

Specifically, the Departments note that the reimbursement requirements under CARES Act 3202(a) will apply to COVID-19 diagnostic testing, as defined in this IFC.

Section 3202(b) of the CARES Act establishes a requirement for each provider of a diagnostic test for COVID-19 to publicize cash prices for such COVID-19 diagnostic testing. Specifically, section 3202(b)(1) of the CARES Act requires each provider of a diagnostic test for COVID-19 to make public the cash price for such test on a public internet website of such provider during the emergency period declared under section 319 of the PHS Act. Section 3202(b)(2) of the CARES Act authorizes the Secretary to impose a civil monetary penalty (CMP) on any provider of a diagnostic test for COVID-19 that does not make public its cash price for such test in compliance with section 3202(b)(1) of the CARES Act and that has not completed a corrective action plan (CAP) to comply with that section. The statute states that the amount of the CMP must not exceed $300 per day that the violation is ongoing.

We believe that cash price posting by providers of diagnostic tests for COVID-19 is important for not only for plans and issuers that must comply under section 3202(a) of the CARES Act but also for individuals who seek COVID-19 diagnostic testing.

Therefore, we are adopting in this IFC policies that implement the requirement in section 3202(b) of the CARES Act that providers of diagnostic tests for COVID-19 make public their cash price for such tests on the internet. Specifically, we are finalizing the following: (1) Definitions of “provider of a diagnostic test for COVID-19” (herein referred to as “provider”), “diagnostic test for COVID-19” (herein referred to as “COVID-19 diagnostic test”), and “cash price”; (2) requirements for making public cash prices; and (3) penalties for non-compliance with the cash price posting requirements.

2. Requirement That Providers of COVID-19 Diagnostic Tests Make Public Cash Prices for COVID-19 Diagnostic Tests

The rapid expansion of COVID-19 related diagnostic testing capacity is a top priority in HHS' strategy to combat the pandemic. COVID-19 diagnostic testing is generally performed by laboratories located in a variety of sites, including for example: Government labs; hospital-run labs; clinician offices; stand-alone labs; urgent care centers; and pharmacies. There are several types of COVID-19 tests designed to detect SARS-CoV-2 or to diagnose a possible case of COVID-19, including molecular (RT-PCR) tests, which are used to detect the virus's genetic material, and antigen tests, which are used to detect specific proteins on the surface of the virus and serology testing, which is used to look for the presence of antibodies produced by the body in response to infections.

For purposes of implementing section 3202(b) of the CARES Act, we are adopting a new 45 CFR part 182, “Price Transparency for COVID-19 Diagnostic Tests,” that will implement price transparency requirements for making public cash prices for performance of a COVID-19 diagnostic test. Section 182.10 states that part 182 implements section 3202(b) of the CARES Act.

For purposes of section 6001(a)(1) of the FFCRA, as amended by section 3201 of the CARES Act, and as explained in guidance issued by the Departments, COVID-19 diagnostic tests include all

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diagnostic tests, which include molecular, antigen, and serological tests. Specifically, section 6001(a) of the FFCRA, as amended by section 3201 of the CARES Act, requires plans and issuers to provide coverage for an

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diagnostic test, as defined in 21 CFR 809.3(a) (or its successor regulations), for the detection of SARS-CoV-2 or diagnosis of COVID-19, and the administration of such a test that: (1) Is approved, cleared, or authorized under section 510(k), 513, 515, or 564 of the FD&C Act (21 U.S.C. 360(k), 360c, 360e, 360bbb-3); (2) the developer has requested, or intends to request, emergency use authorization under section 564 of the FD&C Act (21 U.S.C. 360bbb-3), unless and until the emergency use authorization request under such section 564 has been denied or the developer of such test does not submit a request under such section within a reasonable timeframe; (3) is developed in and authorized by a state that has notified the Secretary of HHS of its intention to review tests intended to diagnose COVID-19; or (4) other tests that the Secretary of HHS determines appropriate in guidance.

We are therefore at § 182.20 defining a “diagnostic test for COVID-19” (also referred to as a “COVID-19 diagnostic test”) as a COVID-19

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diagnostic test described in section 6001 of the FFCRA, as amended by section 3201 of the CARES Act. Such COVID-19 diagnostic tests are currently billed by providers using HCPCS and CPT codes including, but not limited to: CPT codes 86408, 86409, 87635, 87426, 86328, and 86769 and HCPCS codes U0001 through U0004. We intend this list of billing codes to be illustrative, however, not exhaustive. Therefore, as noted previously, a “COVID-19 diagnostic test” is defined as a COVID-19

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diagnostic test described in section 6001 of the FFCRA, as amended by section 3201 of the CARES Act, even if a particular COVID-19 diagnostic test or its billing code is not included on this list. Codes continue to be created to address new and proprietary tests as they are developed. We therefore anticipate updating this list in guidance as new tests and codes are developed.

See Q3 of FAQs About Families First Coronavirus Response Act and Coronavirus Aid, Relief, And Economic Security Act Implementation Part 42 available at:

https://www.cms.gov/files/document/FFCRA-Part-42-FAQs.pdf.

Obtaining a diagnostic test for COVID-19 generally can involve up to three separate health care services for an individual including evaluation by a practitioner of the need for such testing, and, once the provider determines the need for a COVID-19 diagnostic test, specimen collection and laboratory analysis of the specimen, that is, actual performance of a COVID-19 diagnostic

test. For purposes of implementing section 3202(b), we are defining “provider of a diagnostic test for COVID-19” (herein referred to as “provider”) as any facility that performs one or more COVID-19 diagnostic tests. CMS regulates all laboratory testing performed on humans for the purposes of diagnosis, prevention, or treatment in the U.S. through the Clinical Laboratory Improvement Amendments CLIA program (42 U.S.C. 263a). In order to perform COVID-19 testing, a facility (whether that be a primary care provider's office, urgent care center, outpatient hospital site or stand-alone laboratory) is required to hold a CLIA certificate based on the complexity of the testing performed by the facility. Therefore, we expect that any “provider of a diagnostic test for COVID-19” would either hold or have submitted a CLIA application necessary to obtain a CLIA certificate (including a certificate of waiver, as applicable) and that such testing would occur in facilities ranging from primary care provider offices to urgent care centers to stand-alone national laboratories.

At § 182.20, we are defining “cash price” as the charge that applies to an individual who pays in cash (or cash equivalent) for a COVID-19 diagnostic test. We believe this definition will provide a clear point of reference not only for individuals who seek such tests, but also for payers who wish to negotiate reimbursement rates with providers of diagnostic tests for COVID-19, or who wish to help direct their members to providers of diagnostic tests for COVID-19 who charge cash prices that payers believe to be reasonable. The “cash price” is generally analogous to the “discounted cash price” as defined at 45 CFR 180.20 for purposes of the Hospital Price Transparency final rule. As we explained in that rule, providers often offer discounts off their gross charges or make other concessions to individuals who pay for their own care (referred to as self-pay individuals) (84 FR 65524). We also stated that the discounted cash price may be generally analogous to the “walk-in” rate that would apply to all self-pay individuals, regardless of insurance status, who pay in cash at the time of the service, and that such charges are often lower than the rate the hospital negotiates with third party payers because billing self-pay individuals would not require many of the administrative functions that exist for hospitals to seek payment from third party payers (for example, prior authorization and billing functions).

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It is therefore our expectation that the “cash price” established by the provider will be generally similar to, or lower than, rates negotiated with in-network plans and insurers. If a provider has not established a “cash price” for a COVID-19 diagnostic test that is lower than its gross charge or retail rate, the provider must make public the undiscounted gross or retail rate found in its master price list (which is analogous to the hospital's chargemaster). We do not believe that posting a “cash price” should prevent a provider of a diagnostic test for COVID-19 from offering testing for free to individuals as charity care or in an effort to combat the public health crisis, rather, the “cash price” would be the maximum charge that may apply to a self-pay individual paying out-of-pocket. We solicit comment on this approach and whether any additional standards should be implemented to address any potential abuse.

Rosato D. How Paying Your Doctor in Cash Could Save You Money. Consumer Reports. May 4, 2018. Available at:

https://www.consumerreports.org/healthcare-costs/how-paying-your-doctor-in-cash-could-save-you-money/.

David Lazarus. Insured price: $2,758. Cash price: $521. Could our Healthcare System by any Dumber? Los Angeles Times. July 30, 2019. Available at:

https://www.latimes.com/business/story/2019-07-29/column-could-our-healthcare-system-be-any-dumber.

Beck M. How to Cut Your Health-Care Bill: Pay Cash. The Wall Street Journal. February 15, 2016. Available at:

https://www.wsj.com/articles/how-to-cut-your-health-care-bill-pay-cash-1455592277.

Dr. Steven Goldstein. Patients Can Save Money When They Pay Their Doctor In Cash. Houston Healthcare Initiative. August 10, 2020. Available at:

https://houstonhealthcareinitiative.org/patients-can-save-money-when-they-pay-their-doctor-in-cash/.

Under new § 182.30(a) and (b), these requirements apply to a “provider of a diagnostic test for COVID-19” as defined at § 182.20 and are applicable during the PHE for COVID-19 determined to exist nationwide as of January 27, 2020, by the HHS Secretary under section 319 of the PHS on January 31, 2020, as a result of confirmed cases of COVID-19, including any subsequent renewals.

Finally, section 3202(b)(1) of the CARES Act states that each provider of a diagnostic test for COVID-19 shall make public the cash price for such test on a public internet website of such provider. We interpret this to mean that providers must make public the cash prices for performing COVID-19 diagnostic tests on the provider's internet website. Specifically, as discussed below, § 182.40(a)(1) and (2) require that each provider of a COVID-19 diagnostic test that has a website make public the cash price information described in § 182.40(c) electronically, and that the information itself, or a link to a web page that contains such information, must appear in a conspicuous location on a searchable homepage on the provider's website. We recognize that some providers of a COVID-19 diagnostic test, for example, small or rural providers, may not have websites. Therefore, in the event that a provider does not have a website on which to post this cash price information, we are finalizing a policy at § 182.40(b) to require the provider to make public its cash price information in writing upon request within two business days and by posting signage prominently at the location where the provider offers a COVID-19 diagnostic test in a place likely to be viewed by members of the public seeking to obtain and pay for such testing. If the provider does not have its own website or a publicly accessible location then, upon request and within two business days, the provider will be required to make public its cash price information in writing to the requestor but will not be required to post signage at the location where it performs the COVID-19 diagnostic test. For purposes of complying with the requirement that the cash price information be made public in writing, we will consider email correspondence to the requester to be an acceptable written format. We believe these policies will help ensure that the public (including individuals, issuers, health plans, and others) has access to every provider's COVID-19 diagnostic test cash prices, including those providers who do not perform COVID-19 diagnostic tests at publicly accessible locations. We seek comment on these issues, including the frequency by which providers may not have websites.

Furthermore, at § 182.40(a)(3), we are requiring that providers of a COVID-19 diagnostic test display their cash price information in an easily accessible manner, without barriers, including, but not limited to, ensuring the information is accessible: Free of charge; without having to establish a user account or password; and without having to submit personal identifiable information (PII). In addition, we are requiring at § 182.40(a)(4) that the provider's homepage contain certain keywords that we believe will increase the likelihood that the public will be able to locate the information using a search engine. Specifically, § 182.40(a)(4) requires that all of the following terms be included on the provider's homepage: The provider's name; “price”; “cost”; “test”; “COVID”; and “coronavirus.” We seek

comment on whether providers should have flexibility to select between using “COVID” or “coronavirus” and between “cost” and “price” if the provider is linking to the information from its homepage.

Finally, we believe that it is important for the provider to include certain standardized information so that the public can understand the relationship between the posted cash price and the COVID-19 diagnostic test(s) offered by the provider. Therefore, at § 182.40(c)(1) through (4), we are requiring all providers to make public, along with the cash price for each COVID-19 diagnostic test(s) that they offer, information that, at minimum, includes a plain language description of each COVID-19 diagnostic test, the corresponding cash price, the billing code(s) for each such test(s), and any additional information as may be necessary for the public to be certain of the cash price for a particular COVID-19 diagnostic test. For example, if the provider offers the same test at a different cash price that is dependent on location or some other factor, then on its website listing of cash prices, the provider must indicate all the cash prices that apply to the test and relevant distinguishing information as to when each different cash price applies. We believe that this information is necessary for the public, including group health plans and health insurance issuers offering group or individual health insurance coverage that must provide reimbursement for COVID-19 diagnostic testing pursuant to the requirements of section 3202(a) of the CARES Act. This requirement applies to cash price information posted on the provider's website, made available upon request and, where applicable, on signage.

These requirements are applicable immediately; however, we seek comment on these requirements and may, as a result of public comment, revise these requirements or finalize additional requirements. We also specifically seek comment on the definition of “diagnostic test for COVID-19” as solely a COVID-19

in vitro

diagnostic test described in section 6001 of FFCRA.

We seek comment on the definition of “provider of a COVID-19 diagnostic test”. We seek comment on whether consumers may benefit from knowing the total cost of care for receiving a COVID-19 test, including the doctor's visit and specimen collection, in order to protect themselves against potential unexpected health care costs and make a more informed health care purchasing decision and therefore whether we should adopt a more inclusive definition of a provider of a diagnostic test for purposes of this requirement. Specifically, we seek comment on whether a “provider of a diagnostic test for COVID-19” should be expanded to include providers that perform additional services related to the performance of a COVID-19 diagnostic test, such as for specimen collection or mileage fees that may be billed as part of or in conjunction with the specimen collection, if applicable. We are particularly interested in submissions from stakeholders that include data, both anecdotal and claims-based, on the ways in which consumers request and receive COVID-19 diagnostic testing, including the site of care, frequency, and type of provider.

We seek comment on the definition of “cash price”. We have heard concerns from stakeholders that certain providers may use the posting of a “cash price” as an opportunity to “price gouge”.

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We therefore specifically seek comment on whether this definition or some other definition would help to mitigate concerns for price gouging by out-of-network providers. We seek comment on whether there are additional authorities and safeguards that could be used to mitigate concerns for price gouging both for group health plans and issuers and for consumers receiving a COVID-19 diagnostic test.

Morgan Haefner. Out-of-network Providers Price Gouging COVID-19 tests, AHIP says. Becker's Hospital Review Newsletter. August 28, 2020. Available at:

https://www.beckershospitalreview.com/payer-issues/out-of-network-providers-price-gouging-covid-19-tests-ahip-says.html.

Susannah Luthi. The $7,000 COVID Test: Why States are Stepping in to Shield Consumers. POLITICO. June 8, 2020. Available at:

https://www.politico.com/news/2020/06/08/coronavirus-test-costs-304058.

Ken Alltucker. `I was floored': Coronavirus test prices charged by some hospitals and labs stun consumers, spur questions. USA Today. September 15, 2020. Available at:

https://www.usatoday.com/story/news/health/2020/09/15/covid-test-prices-hospitals-scrutiny-congress-insurers-consumers/3472304001/.

We seek comment regarding whether these requirements are sufficient to inform consumers of the cash price for a COVID-19 diagnostic test in advance of receiving one and what, if any, additional requirements or safeguards should be considered to avoid consumer confusion or prevent unintended consequences (for example, balance billing). Specifically, we seek comment regarding how providers should post cash prices so that they do not inadvertently deter consumers from seeking a test that would normally result in no out-of-pocket cost to the consumer.

Finally, we seek comment on an approach that balances priorities to further price transparency for consumers and other stakeholders and reduce barriers to COVID-19 testing. We recognize that these final policies become effective as of the date of display of this IFC and are applicable only until the end of the PHE. Even so, we seek comment whether and to what extent these final policies and the alternatives about which we are seeking comment (for instance, expansion of the definition of “provider”) may lead to:

• Potential cost shifting from providers or participants, beneficiaries, and enrollees to group health plans or issuers, if the group health plan and issuer reimbursement obligation for COVID-19 diagnostic testing is expanded to cover such testing without cost-sharing (including deductibles, co-pays, and co-insurance) and as payment in full for items and services that were not previously covered in such a manner by group health plans or issuers.

• Potential for group health plans or issuers to negotiate rates that are lower than the cash price with out-of-network providers with whom they do not have established negotiated rates.

• Price gouging or other anti-competitive behavior (under both the policies and the alternatives for which we seek comment) by providers as well as any potential negative impact on premiums in the future that have not already been accounted for in 2021 rates. Please provide empirical evidence, if any, including based on claims data during the PHE for COVID-19.

• Potential savings to issuers and plans from insured consumers seeking out COVID-19 diagnostic testing from in-network providers, as opposed to the provider of their choice, as a result of these increased price transparency requirements.

• Price sensitivity by consumers covered by group health plans or issuers in their choice of provider, and awareness of any potential cost-shifting to group health plans or issuers, or to consumers themselves through balance billing, as a result of these increased price transparency requirements.

• Transparency benefits for the uninsured, who may already have an incentive to find the lowest price.

• Group health plans or issuers taking on new consumer education or other potential costs, for example, costs associated with incentivizing consumers covered by group health plans or issuers to stay in network or seek care from lower cost providers.

3. Monitoring and Enforcement of Requirements To Publicize Cash Prices for COVID-19 Diagnostic Tests

Section 3202(b)(2) of the CARES Act authorizes and provides the Secretary discretion to impose a CMP on any provider of a diagnostic test for COVID-19 that is not in compliance with section 3202(b)(1) of the CARES Act and has not completed a CAP to comply with the requirements of such paragraph, in an amount not to exceed $300 per day that the violation is ongoing. In this IFC, we are adopting mechanisms to monitor the requirement that a provider of a diagnostic test for COVID-19 publicize the cash price for diagnostic testing and enforce these requirements, as necessary.

a. Monitoring for Noncompliance and Pre-Penalty Actions

Section 3202(b)(1) of the CARES Act does not prescribe monitoring procedures or the factors we should consider in imposing penalties on providers for noncompliance. We anticipate relying predominantly on complaints made to CMS by the public, including individuals, as well as issuers and plans, regarding providers' potential noncompliance. Specifically, in response to such complaints, we may investigate and evaluate whether a provider has complied with the requirements discussed above. The monitoring methods for determining a provider's compliance with the requirements for publicizing the cash price for a COVID-19 diagnostic test may include, but are not limited to, the following, as appropriate:

• CMS' evaluation of complaints made to CMS.

• CMS' review of an individual's or entity's analysis of noncompliance as stated in the complaint.

• CMS' review of providers' websites or, where a provider does not have a website, its written notice and signage.

The IFC includes these monitoring methods in the regulations at § 182.50(a).

Additionally, at § 182.50(b), we are finalizing discretion for CMS to take any of the following actions if CMS determines the provider is noncompliant with the requirements of § 182.40:

• Provide a written warning notice to the provider of the specific violation(s).

• Request that a provider submit and comply with a CAP under § 182.60.

• Impose a CMP on the provider if the provider fails to respond to CMS' request to submit a CAP or to comply with the requirements of a CAP approved by CMS.

A provider that CMS identifies as noncompliant and to which it offers an opportunity to take corrective action to come into compliance may be notified via a warning notice of its deficiencies. In response to the warning letter, a provider may choose, but is not required, to submit documentation for CMS to review to determine compliance. CMS will review any documentation a provider may submit and, where applicable, a provider's website or other form of written notice, to determine if the provider's noncompliance has been corrected. In the event that a provider does not have its own website on which to post the cash price, CMS will require documentation that the provider has the cash price in written form timely upon request and, where applicable, has posted signage at the provider's facility.

At § 182.60, we specify the requirements for CAPs. Specifically, § 182.60(a) states that a provider may be required to submit a CAP if CMS determines a provider is noncompliant or the provider's noncompliance continues after a warning notice. A violation may include, but is not limited to, a provider's failure to make public its cash price information for COVID-19 diagnostic testing required by § 182.40 and a provider's failure to make public its cash price information in the form and manner required under § 180.40.

Section 182.60(b) states that CMS may request that a provider submit and comply with a CAP, specified in a notice of violation issued by CMS to a provider. Additionally, in § 182.60(c), we specify the following provisions related to CAPs:

• A provider required to submit a CAP must do so, in the form and manner, and by the deadline, specified in the notice of violation issued by CMS to the provider, and must comply with the requirements of the CAP approved by CMS.

• A provider's CAP must specify elements including, but not limited to, the corrective actions or processes the provider will take to address the deficiency or deficiencies identified by CMS, and the timeframe by which the provider will complete the corrective action.

• A CAP is subject to CMS review and approval. After CMS' review and approval of a provider's CAP, CMS may monitor and evaluate the provider's compliance with the corrective actions specified in the CAP.

Section 182.60(d) outlines the following provisions for identifying a provider's noncompliance with CAP requests and requirements:

• A provider's failure to respond to CMS' request to submit a CAP includes failure to submit a CAP in the form, manner, or by the deadline, specified in a notice of violation issued by CMS to the provider.

• A provider's failure to comply with the requirements of a CAP includes failure to correct violation(s) within the specified timeframes.

We seek comment on this approach for monitoring providers of COVID-19 diagnostic testing for compliance with these requirements. Specifically, we seek comments on relying predominantly on complaints to determine a provider's potential noncompliance. We further seek comments on issuing warning letters and requesting CAPs for violations related to making public cash prices for COVID-19 diagnostic testing. Additionally, we seek comments on the length of time we should specify in warning notices to allow corrections of violations before issuance of a request for CAP, and the length of time we should specify for providers to complete and return a CAP to CMS.

b. Civil Monetary Penalties

Under section 3202(b)(2) of the CARES Act, CMS may impose a CMP on a provider that we identify as noncompliant. At § 182.70, we are finalizing requirements related to imposition of CMPs. At § 182.70(a), we finalize a policy that CMS may impose a CMP on a provider that we identify as noncompliant with any of the requirements of § 182.40, and that fails to respond to CMS' request to submit a CAP or to comply with the requirements of a CAP approved by CMS described in § 182.60(d).

Under the statute, the maximum daily dollar amount for a CMP to which a provider may be subject is $300, even if the provider is in violation of multiple discrete requirements of § 182.40. The maximum daily amount of the CMP will be adjusted annually using the multiplier determined by the Office of Management and Budget (OMB) for annually adjusting CMP amounts under 45 CFR part 102. CMS will provide a written notice of imposition of a CMP to the provider via certified mail or another form of traceable carrier. The elements of this notice to the provider will include but are not limited to the following:

• The basis for the provider's noncompliance, including, but not limited to, the following: CMS' determination as to which requirement(s) the provider has violated; and the provider's failure to respond to CMS' request to submit a

CAP or comply with the requirements of a CAP.

• CMS' determination as to the effective date for the violation(s).

• The amount of the penalty as of the date of the notice.

• A statement that a CMP may continue to be imposed for continuing violation(s).

• Payment instructions.

• A statement of the provider's right to a hearing according to § 182.90 of subpart D.

• A statement that the provider's failure to request a hearing within 30 calendar days of the issuance of the notice permits the imposition of the penalty, and any subsequent penalties pursuant to continuing violations, without right of appeal.

CMS may issue subsequent notice(s) of imposition of a CMP, according to the aforementioned requirements (in short, where investigation reveals there is continuing justification), that result from the same instance(s) of noncompliance. A provider must pay the CMP in full within 60 calendar days after the date of the notice of imposition of a CMP from CMS. In the event a provider requests a hearing, under subpart D of 45 CFR part 182, the provider must pay the amount in full within 60 calendar days after the date of a final and binding decision to uphold, in whole or in part, the CMP. If the 60th calendar day is a weekend or a Federal holiday, then the timeframe is extended until the end of the next business day. Should a provider elect to appeal the CMP, and where the CMP is upheld only in part by a final and binding decision, CMS will issue a modified notice of imposition of a CMP, to conform to the adjudicated finding as specified in § 182.70.

In the event a CMP is not paid in full within 60 days, CMS will follow the collections activities set forth in 45 CFR part 30. Generally, CMS will issue a written demand for payment no later than 30 days after a debt is delinquent. For debts not paid by the date specified in the written demand, interest, charged at a rate established by the Secretary of the Treasury, shall accrue from the date of delinquency. CMS will transfer debts 180 days or more delinquent to the Department of Treasury for collection.

We seek comment on the approach we are establishing for imposing a CMP on a provider noncompliant with the regulations set forth in § 182.40. Specifically, we seek comments on the length of time allowed between issuance of the request for CAP and the imposition of a CMP. In addition, we seek comments on the amount of the CMP imposed per day up to the statutory maximum daily amount that would be applicable to all noncompliant providers.

c. Appeals Process

We believe it is important to establish a fair administrative process by which providers may appeal CMS' decisions to impose penalties under the requirements established by § 182.40. Through various programs, we have gained experience with administrative hearings and other processes to review CMS' determinations. That experience includes the processes we recently finalized in the CY 2020 Hospital Outpatient Prospective Payment System (OPPS) Price Transparency Final Rule (84 FR 65524) and corresponding regulations at 45 CFR part 180, which requires price transparency for hospitals, and we are aligning the procedures for the appeals process here with those procedures. Therefore, a provider upon which CMS has imposed a penalty under § 182.70 may appeal that penalty in accordance with §§ 180.100 and 180.110, subpart D, with conforming edits.

Generally, under this approach, a provider upon which CMS has imposed a penalty may request a hearing of that penalty before an Administrative Law Judge (ALJ). The CMS Administrator, at his or her discretion, may review in whole or in part the ALJ's decision. A provider against which a final order imposing a CMP is entered may obtain judicial review.

We specify at § 182.80 the procedures for a provider to appeal the CMP imposed by CMS for its noncompliance with the requirements of § 182.40 to an ALJ, and for the CMS Administrator, at his or her discretion, to review in whole or in part the ALJ's decision. In so doing, we apply the following conforming modifications to the text:

• References to “hospital” are replaced by the term “provider.” We note that the term “provider,” as defined at new 45 CFR 182.20 in this rule, may also include hospitals.

• References to “standard charge” are replaced by the term “cash price.”

We seek comment on the approach we are establishing for appeals.

We also set forth in § 182.90 the consequences for failure of a provider to request a hearing. If a provider does not request a hearing within 30 calendar days of the issuance of the notice of imposition of a CMP described in § 182.70(b), CMS may impose the CMP indicated in such notice and may impose additional penalties under continuing violations according to § 182.70(e) without right of appeal. If the 30th calendar day is a weekend or a Federal holiday, then the timeframe is extended until the end of the next business day. The provider has no right to appeal a penalty with respect to which it has not requested a hearing in accordance with 45 CFR 150.405, unless the provider can show good cause, as determined at § 150.405(b), for failing to timely exercise its right to a hearing.

D. Medicare Inpatient Prospective Payment System (IPPS) New COVID-19 Treatments Add-On Payment (NCTAP) for the Remainder of the Public Health Emergency (PHE)

1. Section 3710 of the CARES Act IPPS Add-On Payment for COVID-19 Patients During the PHE

Section 3710 of the CARES Act amended section 1886(d)(4)(C) of the Act to provide for an increase in the weighting factor of the assigned Diagnosis-Related Group (DRG) by 20 percent for an individual diagnosed with COVID-19 discharged during the period of the PHE for COVID-19. To implement this temporary adjustment, Medicare's claims processing systems apply an adjustment factor to increase the Medicare Severity-DRG (MS-DRG) relative weight that would otherwise be applied by 20 percent when determining IPPS operating payments. For additional information regarding this add-on payment, including which claims are eligible for the 20 percent increase in the MS-DRG weighting factor, please see the Medicare Learning Network (MLN) Matters article “New COVID-19 Policies for Inpatient Prospective Payment System (IPPS) Hospitals, Long-Term Care Hospitals (LTCHs), and Inpatient Rehabilitation Facilities (IRFs) due to Provisions of the CARES Act” available on the CMS website at

https://www.cms.gov/files/document/se20015.pdf.

2. Overview of IPPS New Technology Add-On Payment

The new medical service or technology add-on payment policy under the IPPS provides additional payments for cases with relatively high costs involving eligible new medical services or technologies, while preserving some of the incentives inherent under an average-based prospective payment system. The payment mechanism is based on the cost to hospitals for the new medical service or technology. Sections 1886(d)(5)(K) and (L) of the Act establish a process of identifying and ensuring adequate payment for new medical services and technologies (sometimes collectively referred to in this section as “new technologies”)

under the IPPS. The regulations at 42 CFR 412.87 and 412.88 implement these provisions.

As set forth in § 412.88(b)(2), for a new technology other than certain antimicrobial products (for which the maximum add-on payment is 75 percent), if the costs of a discharge involving a new technology exceed the full DRG payment (including payments for Indirect Medical Education (IME) and Disproportionate Share Hospital (DSH), but excluding outlier payments)), Medicare will make a new technology add-on payment equal to the lesser of: (1) 65 percent of the costs of the new technology; or (2) 65 percent of the amount by which the costs of the case exceed the standard DRG payment.

For additional information regarding IPPS new technology add-on payments please see the FY 2021 IPPS/LTCH PPS final rule (85 FR 58602 through 58608).

3. Overview of the Food and Drug Administration (FDA) Coronavirus Treatment Acceleration Program

The FDA has created a special emergency program for possible coronavirus therapies, the Coronavirus Treatment Acceleration Program. The program uses every available method to move new treatments to patients as quickly as possible, while at the same time finding out whether they are helpful or harmful. The FDA continues to support clinical trials that are testing new treatments for COVID-19 so that valuable knowledge about their safety and effectiveness can be gained. Additional information regarding this program is available on the FDA website at

https://www.fda.gov/drugs/coronavirus-covid-19-drugs/coronavirus-treatment-acceleration-program-ctap.

One aspect of the program is the issuance by the FDA of EUAs during the PHE for COVID-19. On February 4, 2020, pursuant to Section 564(b)(1)(C) of the FD&C Act, the Secretary of the Department of Health and Human Services (HHS) determined that there is a PHE that has a significant potential to affect national security or the health and security of United States citizens living abroad, and that involves the virus that causes COVID-19.

On the basis of such determination, the Secretary of HHS on March 27, 2020, declared that circumstances exist justifying the authorization of emergency use of drugs and biological products during the COVID-19 pandemic, pursuant to section 564 of the FD&C Act, subject to terms of any authorization issued under that section.

U.S. Department of Health and Human Services,

Determination of a Public Health Emergency and Declaration that Circumstances Exist Justifying Authorizations Pursuant to Section 564(b) of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. 360bbb-3. February 4, 2020.

U.S. Department of Health and Human Services,

Declaration that Circumstances Exist Justifying Authorizations Pursuant to Section 564(b) of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. 360bbb-3,

85 FR 18250 (April 1, 2020).

There are currently five drug and biological products with EUAs issued during the PHE for COVID-19. In section “I. Criteria for Issuance of Authorization” of the current letters of authorization for these drug and biological products, the letters for two of the products state that based on the totality of scientific evidence available to FDA, it is reasonable to believe that the product may be effective in treating COVID-19, and that, when used under the conditions described in the authorization, the known and potential benefits of the product when used to treat COVID-19 outweigh the known and potential risks of such products.

[1]

Those two drug and biological products are COVID-19 convalescent plasma and Veklury (remdesivir).

EUA for COVID-19 convalescent plasma:

https://www.fda.gov/media/141477/download;

EUA for remdesivir:

https://www.fda.gov/media/137564/download.

The current letters of authorization for the other three products used in patients with suspected or confirmed COVID-19 do not indicate that those products are treating COVID-19 and instead treat a disease or condition caused or exacerbated by COVID-19.

Specifically, the letter of authorization for REGIOCIT indicates its use as a replacement solution in adult patients in a critical care setting who are being treated with Continuous Renal Replacement Therapy (CRRT) and for whom regional citrate anticoagulation (RCA) is appropriate; the letter of authorization for Fresenius Propoven 2 percent Emulsion indicates its use to maintain sedation via continuous infusion in patients greater than 16 years old who require mechanical ventilation in an ICU setting; and the letter of authorization for multiFiltrate PRO System and multiBic/multiPlus Solutions indicates its use in delivering CRRT in an acute care environment.

EUA for REGIOCIT:

https://www.fda.gov/media/141168/download;

EUA for Fresenius Propoven 2 percent Emulsion

https://www.fda.gov/media/137888/download;

EUA for multiFiltrate PRO System and multiBic/multiPlus Solutions:

https://www.fda.gov/media/137520/download.

In order for an item or service to be considered for coverage under Medicare Part A or Part B, the item or service must fall within at least one benefit category established in the Act. Drugs and biologicals are included within several such benefit categories. In general, section 1861(t)(1) of the Act defines drugs and biologicals to include drugs or biologicals approved for inclusion in certain compendia (except for any drugs and biologicals unfavorably evaluated therein) or that are approved by the pharmacy and drug therapeutics committee (or equivalent committee) of the medical staff of a hospital furnishing that drug or biological for use in that hospital. CMS has determined that it is appropriate for CMS to consider drug and biological products which are authorized for emergency use for COVID-19, with letters of authorization, and are used to treat COVID-19 disease, to fall within the drugs and biologicals definition in section 1861(t)(1) of the Act for Medicare purposes if they are included or approved for inclusion in the applicable compendia, or when furnished by a specific hospital if approved for use in that hospital by the pharmacy and drug therapeutics committee (or equivalent committee) of the medical staff of that hospital.

FDA approval for remdesivir:

https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2020/214787Orig1s000ltr.pdf.

More information regarding EUAs for drug and biological products during the PHE for COVID-19 is available on the FDA website at

https://www.fda.gov/emergency-preparedness-and-response/mcm-legal-regulatory-and-policy-framework/emergency-use-authorization#coviddrugs.

4. Overview of IPPS Outlier Payments

Section 1886(d)(5)(A) of the Act provides for payments in addition to the basic prospective payments for “outlier” cases involving extraordinarily high costs. To qualify for outlier payments, one criterion is that a case must have costs greater than the sum of the prospective payment rate for the MS-DRG, any IME and DSH payments, uncompensated care payments, any new technology add-on payments, and the “outlier threshold” or “fixed-loss” amount (a dollar amount by which the costs of a case must exceed payments in order to qualify for an outlier payment). We refer to the sum of the prospective payment rate for the MS-DRG (including the Section 3710 of the CARES Act add-on payment if applicable), any IME and DSH payments, uncompensated care

payments, any new technology add-on payments, and the outlier threshold as the outlier “fixed-loss cost threshold.” Payments for eligible cases are then made based on a marginal cost factor, which is a percentage of the estimated costs above the fixed-loss cost threshold. The marginal cost factor is 80 percent for all MS-DRGs except the burn MS-DRGs, where the marginal cost factor is 90 percent. For the complete formula for how an outlier payment is computed, we refer the reader to the FY 2021 IPPS/LTCH PPS final rule (85 FR 59043 through 59044). We note, for each claim, per the formula in the FY 2021 IPPS/LTCH PPS final rule, in determining whether the claim is eligible for an operating outlier payment and/or a capital outlier payment, an “operating outlier threshold” and a “capital outlier threshold” are computed, including application of a geographic adjustment to account for local cost variation. If the case is eligible, an “operating outlier payment” and/or “capital outlier payment” will be made for an individual claim. For additional information regarding IPPS outlier payments please see the FY 2021 IPPS/LTCH PPS final rule (85 FR 59034 through 59041).

5. Eligibility Criteria for an IPPS New COVID-19 Treatments Add-on Payment (NCTAP) for the Remainder of the PHE

We believe that as drugs or biological products become available and are authorized or approved by FDA for the treatment of COVID-19 in the inpatient setting, it would be appropriate to increase the current IPPS payment amounts to mitigate any potential financial disincentives for hospitals to provide these new treatments during the PHE. Therefore, effective for discharges occurring on or after the effective date of this rule and until the end of the public health emergency, CMS is using the exceptions and adjustment authority under section 1886(d)(5)(I) of the Act to create a New COVID-19 Treatments Add-on Payment (NCTAP) under the IPPS for COVID-19 cases that meet certain criteria.

First, the case must include the use of a drug or biological product authorized to treat COVID-19 as indicated in section “I. Criteria for Issuance of Authorization” of the current letter of authorization for the drug or biological product, or the drug or biological product must be approved by the FDA for treating COVID-19. Because the purpose of the NCTAP is to mitigate potential financial disincentives for hospitals to provide new COVID-19 treatments, this criterion expeditiously provides assurance in the context of the urgency of the PHE that a treatment is new and is used to treat COVID-19 during the PHE. Currently, there are only two drug or biological products that meet this criterion: Veklury (remdesivir) and COVID-19 convalescent plasma. However, as additional drug and biological products become available that meet this criterion, cases that use those products would become eligible for the NCTAP if the remaining criteria are met.

Second, the case must also be eligible for the 20 percent increase in the weighting factor for the assigned MS-DRG for an individual diagnosed with COVID-19 discharged during the period of the PHE for COVID-19 under section 3710 of the CARES Act. The primary purposes of this criterion are to help appropriately identify COVID-19 cases to potentially receive the NCTAP, and ensure for program integrity reasons that there is a positive COVID-19 laboratory test documented in the patient's medical record. CMS may conduct post-payment medical review to confirm the presence of a positive COVID-19 laboratory test and, if no such test is contained in the medical record, the NCTAP will be recouped.

Third, the operating cost of the case must exceed the operating Federal payment under the IPPS, including the add-on payment under section 3710 of the CARES Act. The primary purpose of this criterion is to ensure that the NCTAP is made only when needed. The cost of the case is determined by multiplying the covered charges by the operating cost-to-charge ratio, the same way it is determined for new technology add-on payments and operating outlier payments.

We note that all generally applicable statutory and regulatory requirements during the PHE for Medicare payment for a particular case must continue to be met, and that the NCTAP will only be available to the extent that the new COVID-19 treatment meets all coverage requirements under Medicare, including that the use of a drug or biological product is medically reasonable and necessary for that case. No applicable Medicare requirements during the PHE are being waived by the creation of the NCTAP policy.

6. Determination of the IPPS NCTAP Amount for the Remainder of the PHE

As indicated earlier, the goal of the NCTAP is to mitigate potential financial disincentives for hospitals to provide new COVID-19 treatments. These potential financial disincentives are already mitigated in part by the IPPS outlier payment, but we recognize that the costs of a case must exceed payments by the “outlier threshold” or “fixed-loss” amount before outlier payments are made. For FY 2021, the outlier threshold is approximately $30,000. As discussed previously, the outlier threshold is adjusted to account for local cost variation in determining whether an individual claim is eligible for outlier payments. As a simplified example for purposes of illustration, if the operating costs of a case using a new COVID-19 treatment exceed the operating IPPS payment by $10,000, there are no Medicare outlier payments made for this case because the costs are less than the outlier threshold.

We believe that in order to further mitigate any potential financial disincentives for hospitals to provide new COVID-19 treatments, the NCTAP, when needed, should function to partially offset costs that exceed the Medicare payment, but are less than the outlier threshold. By partially rather than fully offsetting these costs, we believe that the NCTAP, similar to the new technology add-on payment policy under the IPPS, preserves some of the incentives inherent under an average-based prospective payment system. One way in which the new technology add-on payment policy accomplishes this goal is by making the new technology add-on payment equal to the lesser of: (1) 65 percent of the costs of the new technology; or (2) 65 percent of the amount by which the costs of the case exceed the standard DRG payment.

We believe that the new technology add-on payment calculation provides an appropriate conceptual framework for the NCTAP calculation. In the context of the urgency of the PHE for COVID-19, however, and the practical and operational challenges of individually tailoring the payment calculation to each new treatment, we believe the NCTAP calculation should take into account 65 percent of the amount by which the costs of the case exceed the standard DRG payment, without comparison to 65 percent of the costs of the new treatment itself. As part of the approval process for the new technology add-on payment for a given new technology, the claims processing system is modified and tailored to apply the new technology add-on payment for that technology using cost and coding information according to the “lesser of” policy described above. In order to more expeditiously provide payment for cases meeting the previously described criteria in the context of the urgency of the PHE, we believe the NCTAP calculation should take into account 65 percent of the amount by which the costs of the case exceed the standard DRG payment for all cases that qualify

for the NCTAP, without comparison to the costs of the new treatment as under the “lesser of” policy applicable for the new technology add-on payment.

We note that a hospital should not seek additional payment on the claim for drugs or biologicals procured or provided by a governmental entity to a provider at no cost to the provider to diagnose or treat patients with known or suspected COVID-19, as described in the CMS Medicare Claims Processing Manual, Pub. 100-04, Chapter 32, Section 67.

CMS will use ICD-10-PCS procedure codes XW033E5 (Introduction of Remdesivir Anti-infective into Peripheral Vein, Percutaneous Approach, New Technology Group 5) and XW043E5 (Introduction of Remdesivir Anti-infective into Central Vein, Percutaneous Approach, New Technology Group 5) to identify cases using remdesivir and ICD-10-PCS procedure codes XW13325 (Transfusion of Convalescent Plasma (Nonautologous) into Peripheral Vein, Percutaneous Approach, New Technology Group 5) and XW14325 (Transfusion of Convalescent Plasma (Nonautologous) into Central Vein, Percutaneous Approach, New Technology Group 5) to identify cases using convalescent plasma. More information on the new procedure codes implemented into the International Classification of Diseases, Tenth Revision, Procedure Coding System (ICD-10-PCS) in response to the PHE for COVID-19 is available on the CMS website at

https://www.cms.gov/files/document/icd-10-ms-drgs-version-372-effective-august-01-2020.pdf.

CMS will issue additional operational instructions on how eligible cases will be identified, including any new treatments that may become available.

We also considered in the determination of the NCTAP amount that we did not want to inadvertently reduce the IPPS operating outlier payments that the hospital would have otherwise received for a costly COVID-19 case given that these outlier payments already help to mitigate potential financial disincentives for hospitals to provide new COVID-19 treatments. Therefore, we do not believe the calculation of the operating outlier payments should be impacted by the NCTAP.

Taking these factors into account, CMS is setting the NCTAP amount for a case that meets the NCTAP eligibility criteria equal to the lesser of: (1) 65 percent of the operating outlier threshold for the claim or (2) 65 percent of the amount by which the costs of the case exceed the standard DRG payment, including the adjustment to the relative weight under section 3710 of the CARES Act. As with the new technology add-on payment and outlier payments, the costs of the case are determined by multiplying the covered charges by the operating cost-to-charge ratio. In addition, the NCTAP will not be included as part of the calculation of the operating outlier payments.

Returning to our simplified example, if the cost of a case using a new COVID-19 treatment exceeds the operating IPPS payment by $10,000 and the operating outlier threshold for the case is for purposes of illustration $30,000, the NCTAP would be $6,500 (= $10,000 excess cost × 0.65). There would be no outlier payments because the excess cost of the case ($10,000) does not exceed the operating outlier threshold for the case ($30,000).

As a simplified example of a case that qualifies for an operating outlier payment, if the cost of a case using a new COVID-19 treatment exceeds the operating IPPS payment by $100,000, the NCTAP would be equal to the maximum NCTAP amount of 65 percent of the operating outlier threshold for the case. In this illustrative example, if the applicable operating outlier threshold for the claim is $30,000, that amount is $19,500 (equals first $30,000 of the excess cost before the operating outlier threshold for the claim is reached × 0.65). In addition, the case would receive an outlier payment that is calculated the same way it is currently calculated in the absence of the $19,500 NCTAP, that is, $56,000 (= ($100,000 excess cost−$30,000 outlier threshold for the case) * the 0.80 outlier marginal cost factor). The combined NCTAP and outlier payment would be $75,500 (equals the $19,500 enhanced payment + the $56,000 outlier payment).

E. Medicare Outpatient Prospective Payment System (OPPS) Separate Payment for New COVID-19 Treatments Policy for the Remainder of the Public Health Emergency (PHE)

1. FDA Coronavirus Treatment Acceleration Program

The FDA has created a special emergency program to facilitate the development of coronavirus therapies, the Coronavirus Treatment Acceleration Program. One aspect of the program is the issuance by the FDA of EUAs during the PHE for COVID-19. On February 4, 2020, pursuant to Section 564(b)(1)(C) of the FD&C Act, the Secretary of the Department of Health and Human Services (HHS) determined that there is a PHE that has a significant potential to affect national security or the health and security of United States citizens living abroad, and that involves the virus that causes COVID-19.

On the basis of such determination, the Secretary of HHS on March 27, 2020, declared that circumstances exist justifying the authorization of emergency use of drugs and biologics during the COVID-19 public health emergency, pursuant to section 564 of the FD&C Act, subject to terms of any authorization issued under that section.

Readers should refer to Section D.3 of this interim final rule with comment period for a full discussion of the Coronavirus Treatment Acceleration Program.

U.S. Department of Health and Human Services,

Declaration that Circumstances Exist Justifying Authorizations Pursuant to Section 564(b) of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. 360bbb-3,

85 FR 18250 (April 1, 2020).

Those drug and biological products are COVID-19 convalescent plasma and Veklury (remdesivir).

EUA for remdesivir:

https://www.fda.gov/media/137564/download;

EUA for COVID-19 convalescent plasma:

https://www.fda.gov/media/141477/download.

While COVID-19 convalescent plasma has received an EUA for treating COVID-19 in hospitalized patients, Veklury (remdesivir), as of October 22, 2020, is the only drug or biological product approved by FDA for treating COVID-19. As discussed in Section II.D.3 of this interim final rule with comment period, in order for an item or service to be considered for coverage under Medicare Part A or Part B, the item or service must fall within at least one benefit category established in the Act. Drugs and biologicals are included within several such benefit categories. In general, section 1861(t)(1) of the Act defines drugs and biologicals to include drugs or biologicals approved for inclusion in certain compendia (except

for any drugs and biologicals unfavorably evaluated therein) or that are approved by the pharmacy and drug therapeutics committee (or equivalent committee) of the medical staff of a hospital furnishing that drug or biological for use in that hospital. CMS has determined that it is appropriate for CMS to consider drug and biological products which are authorized for emergency use for COVID-19, with letters of authorization, and are used to treat COVID-19 disease, to fall within the drugs and biologicals definition in 1861(t)(1) of the Act for Medicare purposes if they are included or approved for inclusion in the applicable compendia, or when furnished by a specific hospital if approved for use in that hospital by the pharmacy and drug therapeutics committee (or equivalent committee) of the medical staff of that hospital.

2. OPPS Comprehensive-Ambulatory Payment Classification (C-APC) Policy

To date, no drug or biological product has an EUA for the treatment of patients with COVID-19 in the outpatient setting. However, because treatment of COVID-19 is rapidly evolving, we believe it is important to ensure that separate payment is available under the OPPS for new drug and biological products (including blood products) that receive an EUA for treating COVID-19 in the outpatient setting or are approved by the FDA for treating COVID-19 in the outpatient setting, or where a drug or biological product approved under an existing EUA is authorized for use in settings other than the inpatient setting. As part of that process, we expect to include the addition of new codes describing those treatments as soon as practicable, after their availability, to ensure efficient and timely beneficiary access to those treatments. We anticipate that most drugs and biological products authorized for use in treating COVID-19 in the outpatient setting would be separately paid under our standard OPPS payment policy because drugs and biological products are typically assigned separate Ambulatory Payment Classification payment status indicators in the OPPS unless they meet one of the criteria for packaging, which, with the exception of drug or biological products billed with a Comprehensive Ambulatory Payment Classification (C-APC) service, we do not anticipate that drugs or biological products approved or authorized to treat COVID-19 would meet. However, these products could be packaged into a C-APC when provided on the same claim as a C-APC service, in which case separate payment would not be made for these products.

Under our C-APC policy, which we adopted beginning in CY 2015, we designate a service described by a HCPCS code assigned to a C-APC as the primary service when the service is identified by OPPS status indicator “J1”. When such a primary service is reported on a hospital outpatient claim, with certain exceptions, we make payment for all other items and services reported on the hospital outpatient claim as being integral, ancillary, supportive, dependent, and adjunctive to the primary service (hereinafter collectively referred to as “adjunctive services”) and representing components of a complete comprehensive service (78 FR 74865 and 79 FR 66799). Payments for adjunctive services are packaged into the payments for the primary services. This results in a single prospective payment for each of the primary, comprehensive services based on the costs of all reported services at the claim level. Items included in the packaged payment provided in conjunction with the primary service also include all drugs, biologicals, and radiopharmaceuticals, regardless of cost, except those drugs with pass-through payment status and self-administered drugs, unless they function as packaged supplies (78 FR 74868 through 74869 and 74909 and 79 FR 66800). Thus, under our current policy, payment for drugs or biological products with an emergency authorization or approved to treat COVID-19 in the outpatient setting would be packaged into payment for a primary C-APC service when billed on the same claim as that service.

Currently, there are 67 C-APCs in the CY 2020 OPPS, with payments ranging from approximately $1,000 to $37,000. Most C-APCs are for surgical or other intensive procedures, which we would expect most hospital outpatient departments would not perform on a patient that has an active case of COVID-19. However, observation services can also be paid through the “Comprehensive Observation Services” C-APC (C-APC 8011), which packages payment for qualifying extended assessment and management encounters. It is possible that future COVID treatments that are authorized or approved for use in the outpatient setting might be administered to patients under observation while the provider determines if the patient needs to be admitted to the hospital for COVID-19.

3. Separate Payment Under the OPPS for New COVID-19 Treatments for the Remainder of the PHE for COVID-19

Although we do not expect that many beneficiaries would both receive a primary C-APC service and a drug or biological for treating COVID-19, we nonetheless believe that as drugs or biologicals become available and are authorized or approved for the treatment of COVID-19 in the outpatient setting, it would be appropriate to mitigate any potential financial disincentives for hospitals to provide these new treatments during the PHE for COVID-19. Therefore, effective for services furnished on or after the effective date of this rule and until the end of the PHE for COVID-19, CMS is creating an exception to its OPPS C-APC policy to ensure separate payment for new COVID-19 treatments that meet certain criteria. Under this exception, any new COVID-19 treatment that meets the two criteria below will, for the remainder of the PHE for COVID-19, always be separately paid and will not be packaged into a C-APC when it is provided on the same claim as the primary C-APC service. Note that this separate payment will result in an additional copayment of 20 percent of the cost of the new COVID-19 treatment, up to the amount of the inpatient deductible.

CMS has identified two criteria for COVID-19 treatments to receive this exception. First, the treatment must be a drug or biological product (which could include a blood product) authorized to treat COVID-19, as indicated in section “I. Criteria for Issuance of Authorization” of the letter of authorization for the drug or biological product, or the drug or biological product must be approved by the FDA for treating COVID-19. Because the purpose of this exception is to mitigate potential financial disincentives for hospitals to provide new COVID-19 treatments, this criterion expeditiously provides assurance in the context of the urgency of the PHE for COVID-19 that a treatment is new and is used to treat COVID-19 disease during the PHE for COVID-19.

Second, the EUA for the drug or biological product (which could include a blood product) must authorize the use of the product in the outpatient setting or not limit its use to the inpatient setting, or the product must be approved by the FDA to treat COVID-19 disease and not limit its use to the inpatient setting.

We note that during the PHE for COVID-19 this new exception to the C-

APC packaging policy would apply to all drug and biological products that meet both of these criteria. As of the date of issuance of this interim final rule there are two drug or biological products that meet the first criterion (Veklury (remdesivir) and COVID-19 convalescent plasma), but neither of these products is authorized or approved for use in the outpatient setting and, as a result, no product meets the second criterion.

We also note that all generally applicable statutory and regulatory requirements for Medicare payment under the OPPS must continue to be met, and that OPPS payment will only be available to the extent that the new COVID-19 treatment meets all coverage requirements under Medicare, including that the use of a drug or biological product is medically reasonable and necessary for the patient. No applicable Medicare requirements during the PHE are being waived by the creation of this C-APC exception.

4. Effects of This Exception on the OPPS Budget Neutrality Calculation

As we noted in Section II.E.2, we believe it would be a fairly rare occurrence that an outpatient department would perform a C-APC procedure on a beneficiary being treated for COVID-19 because most C-APCs are for surgical or other intensive procedures and we would expect most hospital outpatients departments would not perform outpatient surgery on a patient that has an active case of COVID-19. While it is possible that future COVID-19 treatments that are authorized or approved for use in the outpatient setting might be administered to patients under observation while the provider determines if the patient needs to be admitted to the hospital for COVID-19, it is our expectation that this hypothetical situation would not happen frequently. Because we believe a new COVID-19 treatment will rarely be provided on the same claim as a primary C-APC service, we believe new COVID-19 treatments used in the outpatient setting will be separately paid under current policy the vast majority of the time. As a result, we do not believe it is necessary that we make an adjustment to OPPS budget neutrality calculations at this time to account for this new exception, as any budgetary effect of this new exception is likely to be de minimis. If, once new COVID-19 treatments are being provided in the outpatient setting, the claims data indicates that these treatments are being provided on the same claim as a C-APC more frequently than we expected, we can make a prospective adjustment to the OPPS budget neutrality calculations through future rulemaking.

F. Temporary Increase in Federal Medicaid Funding

1. Background

Section 6008 of the FFCRA, as amended by section 3720 of the CARES Act, provides a temporary 6.2 percentage point increase to each qualifying state and territory's Federal Medical Assistance Percentage (FMAP) under section 1905(b) of the Act (“temporary FMAP increase”). This temporary FMAP increase is effective beginning January 1, 2020 and could extend through the last day of the calendar quarter in which the PHE for COVID-19, including any extensions, terminates, if the state claims the FMAP increase in that quarter (we refer herein to the entire period where the FMAP increase is potentially applicable as the “increased FMAP period”).

To qualify for the temporary FMAP increase in a given quarter, states must meet the four conditions described in subsection (b) of section 6008 of the FFCRA during that quarter. Three of these conditions (described at section 6008(b)(1), (2), and (4) of the FFCRA) could extend through the end of the increased FMAP period, if the state claims the increased FMAP through the end of the quarter in which the PHE for COVID-19 ends. They are: (a) The state must maintain eligibility standards, methodologies, or procedures that are no more restrictive than what the state had in place as of January 1, 2020; (b) the state may not charge premiums that exceed those that were in place as of January 1, 2020;

and (c) the state must cover, without the imposition of cost sharing, testing services and treatments for COVID-19, including vaccines, specialized equipment, and therapies.

Section 3720 of the CARES Act added a new subsection (d) to section 6008 of the FFCRA in order to provide states which have increased premiums for any Medicaid beneficiaries above the amounts in effect on January 1, 2020, with a 30-day grace period to restore premiums to amounts no greater than those in effect as of January 1 without jeopardizing the state's eligibility for the temporary 6.2 percentage point FMAP increase.

The fourth condition, which is described at section 6008(b)(3) of the FFCRA, extends through the last day of the month in which the PHE for COVID-19 ends. This condition provides that a state may not receive the temporary FMAP increase if “the [s]tate fails to provide that an individual who is enrolled for benefits under [the Medicaid state] plan (or waiver) as of the date of enactment of this section [March 18, 2020] or enrolls for benefits under such plan (or waiver) during the period beginning on such date of enactment [March 18, 2020] and ending the last day of the month in which the [PHE for COVID-19] ends shall be treated as eligible for such benefits through the end of the month in which such emergency period ends unless the individual requests a voluntary termination of eligibility or the individual ceases to be a resident of the State[.]”

The language in section 6008(b)(3) of the FFCRA is somewhat ambiguous. CMS issued guidance on this condition through frequently asked questions (FAQs) posted on Medicaid.gov on April 13, 2020, May 5, 2020, and June 30, 2020.

However, our existing interpretation (discussed in section II.F.2 of this preamble) is not the only possible interpretation that could be made. As the PHE for COVID-19 continued, and states requested increased flexibility for managing their programs, we revisited our existing interpretation. Seeking to balance the beneficiary protections in our existing interpretation with the state flexibility that could be afforded through an alternative interpretation, this IFC establishes a blended approach as discussed below.

See:

• COVID-19 Frequently Asked Questions (FAQs) for State Medicaid and Children's Health Insurance Program (CHIP) Agencies, available at

https://www.medicaid.gov/state-resource-center/downloads/covid-19-faqs.pdf

(Updated June 30, 2020)

• Families First Coronavirus Response Act—Increased FMAP FAQs available at

https://www.medicaid.gov/state-resource-center/downloads/covid-19-section-6008-faqs.pdf

(Updated April 13, 2020)

• Families First Coronavirus Response Act (FFCRA), Public Law 116-127 Coronavirus Aid, Relief, and Economic Security (CARES) Act, Public Law 116-136 Frequently Asked Questions (FAQs) available at

https://www.medicaid.gov/state-resource-center/downloads/covid-19-section-6008-CARES-faqs.pdf

(Posted April 13, 2020)

2. CMS's Existing Interpretation of Section 6008(b)(3) of the FFCRA

CMS first provided an interpretation of section 6008(b)(3) for implementation by states through FAQs issued in April 2020. Our most recent interpretation provided that to receive the increased FMAP under the FFCRA, a state must keep beneficiaries enrolled in Medicaid, if they were enrolled on or after March 18, 2020, with the same amount, duration, and scope of benefits. It also provided that states could not subject such beneficiaries to any increase in cost sharing or beneficiary liability for institutional services or other long-term services and supports (LTSS) during this time period. This interpretation

protects both beneficiary eligibility and access to medically necessary services.

Under this interpretation, if a state receives information about a beneficiary's change in circumstances that would make the beneficiary ineligible for Medicaid, the state may not terminate that beneficiary's eligibility until the end of the month in which the PHE for COVID-19 ends, except in cases where the beneficiary voluntarily disenrolls or is no longer a resident of the state. Further, if the state receives information that would make a beneficiary eligible for a different eligibility group with lesser benefits, greater cost sharing, or increased beneficiary liability, the state may not transition that beneficiary to the new eligibility group but must maintain the beneficiary's enrollment in the current eligibility group until the end of the month in which the PHE for COVID-19 ends.

See Question B.12 of the Families First Coronavirus Response Act—Increased FMAP FAQs available at

https://www.medicaid.gov/state-resource-center/downloads/covid-19-section-6008-faqs.pdf;

Question F.27 of the Families First Coronavirus Response Act (FFCRA), Public Law 116-127 Coronavirus Aid, Relief, and Economic Security (CARES) Act, Public Law 116-136 Frequently Asked Questions posted on April 13, 2020, available at

https://www.medicaid.gov/state-resource-center/downloads/covid-19-section-6008-CARES-faqs.pdf;

and Questions relating to Continuing Coverage under Section 6008 of the Families First Coronavirus Response Act in the COVID-19 Frequently Asked Questions (FAQs) for State Medicaid and Children's Health Insurance Program (CHIP) Agencies available at

https://www.medicaid.gov/state-resource-center/downloads/covid-19-faqs.pdf

In protecting access to medically necessary services pursuant to this interpretation, states must maintain current coverage in the state plan, including alternative benefit plans (ABPs), and must also maintain current coverage under any waivers and section 1115 demonstrations. For example, states may not implement any new restrictions such as a reduction in the number of covered visits or a prior authorization requirement. Beneficiary coverage may not be reduced on an individual basis either. For example, if a beneficiary has reached age 21 and would no longer be eligible for the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit, the state must continue to provide EPSDT services to the beneficiary when medically necessary, through the end of the month in which the PHE for COVID-19 ends. Further, if a beneficiary is enrolled in a home and community-based services (HCBS) waiver program authorized under section 1915(c) of the Act, and the individual is determined to no longer meet the level-of-care requirements or other requirements for that waiver, the state must maintain the beneficiary's enrollment in the HCBS waiver. Under this interpretation, states are not required to provide services that do not meet the state plan amount, duration, and scope criteria for a benefit (such as medical necessity). However, as a condition for receiving the temporary FMAP increase, the state must ensure that a beneficiary can continue to access the benefits package that was available to that beneficiary as of March 18, 2020 (or a later date within the PHE) through the end of the month in which the PHE for COVID-19 ends.

States have expressed concern that our existing interpretation of section 6008(b)(3) of the FFCRA makes it challenging for them to manage their programs effectively and still qualify for the increased Federal financial participation, in frustration of one purpose of section 6008 of the FFCRA to provide additional support to state Medicaid programs in their response to the COVID-19 pandemic. States made clear to CMS that this interpretation, coupled with the prohibition on adopting more restrictive eligibility standards, methodologies, or procedures under section 6008(b)(1) of the FFCRA, would impede the routine, orderly transition of beneficiaries between eligibility groups, and could lead to significant backlogs in redeterminations and appeals after the PHE for COVID-19 ends.

States also noted that our existing interpretation severely limits state flexibility to control program costs in the face of growing budgetary constraints and developing fiscal challenges during the emergency period. For example, it freezes post-eligibility treatment-of-income (PETI) calculations for institutionalized beneficiaries regardless of changes in circumstances. States have pointed out that a beneficiary receiving HCBS through a waiver approved under section 1915(c) of the Act who is subject to the PETI rules and who subsequently moves into an institution would be entitled to retain the higher personal needs allowance allowed for individuals participating in the relevant waiver, even though the beneficiary's personal needs would be far lower once in the institution. The aggregate effects of this interpretation could result in a substantial increase in the state Medicaid program's cost for the needed institutional services as beneficiaries are not contributing as much toward the cost of their care as they would be in the absence of the FFCRA 6008(b)(3) requirement.

In practice, the only cost-controlling measure available to states under our existing interpretation is reducing provider rates to the minimum level permitted under section 1902(a)(30)(A) of the Act. Such rate cuts, combined with a substantially lower volume of visits since the beginning of the pandemic,

could put some providers out of business. This could undermine the solvency of critical provider networks and their ability to serve beneficiaries in the future, particularly in rural areas where health care workforce shortages may already exist.

Source: Ateev Mehrotra et al.,

The Impact of the COVID-19 Pandemic on Outpatient Visits: Practices Are Adapting to the New Normal

(Commonwealth Fund, June 2020).

https://doi.org/10.26099/2v5t-9y63

3. Alternative Interpretation of Section 6008(b)(3) of the FFCRA

CMS's existing interpretation of section 6008(b)(3) of the FFCRA is not the only possible, reasonable interpretation of that provision. The language in this section could also reasonably be interpreted to mean only that states must maintain the enrollment of beneficiaries who enrolled in the state's Medicaid program as of or after March 18, 2020, through the end of the month in which the PHE ends, but not the specific benefits package they were receiving at that time. In other words, under this alternative interpretation, to fulfill the requirement in section 6008(b)(3) of the FFCRA with respect to a beneficiary who becomes ineligible for enrollment in his current Medicaid eligibility group, states would either (a) transition the beneficiary to another group for which he is eligible and enroll him for the benefits provided to that eligibility group, or (b) retain the beneficiary's enrollment in the original eligibility group, if he did not meet the eligibility criteria for any other group, and maintain the benefits provided to that group. Under this alternative interpretation, a state would be required to move a beneficiary who becomes eligible for another Medicaid eligibility group during the period in which section 6008(b)(3) of the FFCRA applies into that new group, no matter how limited the benefits package is for the new group. We refer to this alternative interpretation as the “enrollment interpretation.”

Under the enrollment interpretation, states claiming the 6.2 percentage point temporary FMAP increase would be permitted to make programmatic changes, such as changes to the medical necessity criteria or utilization control procedures in determining coverage for benefits; elimination of optional benefits

coverage; increases in cost-sharing responsibilities (except with respect to testing services and treatments for COVID-19 per section 6008(b)(4) of the FFCRA); or changes to the PETI methodology. For example, states would be permitted to establish a limit on the number of visits permitted for a given service and to require a copayment for a service in accordance with Medicaid statute and regulations. These programmatic changes would not jeopardize the state's receipt of the temporary FMAP increase.

In considering this interpretation, we note that Congress expressly conditioned receipt of the temporary FMAP increase on a state's temporarily not implementing “more restrictive” “eligibility standards, methodologies, or procedures” in section 6008(b)(1), on temporarily not imposing higher premiums in section 6008(b)(2), and on covering COVID-19 testing and treatment services without cost-sharing in section 6008(b)(4). However, Congress did not legislate with the same express clarity in section 6008(b)(3) with respect to states' ability or inability to reduce the amount, duration, and scope of benefits other than COVID-19 testing and treatment services or to eliminate optional benefits. Further, while Congress expressly prohibited states from imposing cost sharing on testing services and treatments for COVID-19 in section 6008(b)(4) of the FFCRA, Congress did not expressly provide in section 6008(b)(3) for any limitation on cost sharing, or on states' ability to modify cost sharing or beneficiaries' liability for the cost of other services (

e.g.,

in accordance with the PETI rules set forth in 42 CFR part 435, subpart H, and 42 CFR 435.832 for beneficiaries receiving institutional services or other long-term services and supports who are subject to the PETI rules).

Under the enrollment interpretation, states would be required to make individual beneficiary eligibility changes short of disenrollment from Medicaid entirely. For example, states would be required to make changes to a beneficiary's eligibility to reflect a change in income, or a change related to age, pregnancy status, need for LTSS or other eligibility factors. A change of service, such as moving from participation in an HCBS waiver authorized under section 1915(c) of the Act into an institution or vice versa, would also require a change in eligibility for a beneficiary enrolled in an eligibility group specific to HCBS recipients, such as the group described at 42 CFR 435.217, or an eligibility group for individuals living in an institution like the special income level group described at 42 CFR 435.236.

The enrollment interpretation would require states to move a beneficiary who loses eligibility under one Medicaid eligibility group and becomes eligible in a second Medicaid eligibility group into the second eligibility group, even if the second eligibility group confers lesser benefits or results in increased financial liability for the beneficiary. However, as with our existing interpretation, under the enrollment interpretation states would not be permitted to terminate a beneficiary's eligibility unless the individual requested such termination or was no longer a state resident. If a beneficiary loses eligibility under one Medicaid eligibility group and is not eligible for another group, in order to claim the temporary FMAP increase, the state must maintain the beneficiary's enrollment in the current group until the end of the month in which the PHE for COVID-19 ends. Like the programmatic changes discussed previously, individual beneficiary eligibility changes would not jeopardize receipt of the temporary FMAP increase.

In most cases, transferring a beneficiary from one eligibility group to another would not result in a significant change in available benefits. With a few exceptions, Medicaid is considered to be minimum essential coverage (MEC) as defined in section 5000A(f) of the Internal Revenue Code of 1986 (“Code”) and implementing regulations at 26 CFR 1.5000A-2. Certain Medicaid eligibility groups, however, such as the optional eligibility group for individuals infected with tuberculosis (described at 42 CFR 435.215), provide only limited benefits pursuant to the matter following section 1902(a)(10)(G) of the Act. This optional coverage of tuberculosis and tuberculosis-related services is excepted from the definition of MEC at 26 CFR 1.5000A-2(b)(2)(ii) and transferring a beneficiary from an eligibility group that provides MEC to the eligibility group for individuals infected with tuberculosis would result in a significant reduction in available benefits.

Another example of non-MEC coverage available through Medicaid is the optional eligibility group limited to family planning and related services at 42 CFR 435.214, which also provides only a limited benefits package pursuant to the matter following section 1902(a)(10)(G) of the Act, and which is excluded from MEC at 26 CFR 1.5000A-2(b)(2)(i). If the enrollment interpretation was adopted, following the postpartum period for coverage of pregnant women at 42 CFR 435.116, states that cover the optional family planning group (or that provide family planning-only coverage through a section 1115 demonstration) would be required to transfer women who do not qualify for a full-benefit Medicaid eligibility group into family planning-only coverage if they meet the eligibility requirements for the family planning-only group or demonstration.

The enrollment interpretation of section 6008(b)(3) of the FFCRA would make it more challenging for some beneficiaries to access medically necessary services, including services related to the COVID-19 pandemic. A beneficiary transferred to the family planning group following the end of her postpartum period would continue to have access to provider visits for family planning and outpatient drugs and supplies related to those visits, but she would no longer have access to testing services and treatment for COVID-19, pursuant to CMS's interpretation of section 6008(b)(4) of the FFCRA, which is discussed above in section II.B. In addition, she would lose access to inpatient and outpatient hospital services, prescription drugs, and other Medicaid-covered services that are unrelated to family planning.

Beneficiaries with certain chronic conditions like diabetes and sickle cell disease are at higher risk for severe illness from the virus that causes COVID-19.

Under the enrollment interpretation, individuals who lose eligibility for a group that offers MEC may be transitioned to a limited benefit eligibility group, in a state that offers such coverage, in which they would no longer have access to the benefits needed to manage their chronic conditions. Not only would this negatively impact the beneficiary who loses comprehensive Medicaid coverage as a result of this interpretation, but it could also undermine states' COVID-19 response efforts during the public health emergency.

Centers for Disease Control and Prevention, Coronavirus Disease 2019 (COVID-19); People with Certain Medical Conditions; accessed 10/08/2020 at

https://www.cdc.gov/coronavirus/2019-ncov/need-extra-precautions/people-with-medical-conditions.html.

4. Adopting a Blended Approach

As we considered changing our interpretation of section 6008(b)(3) of the FFCRA, CMS examined the implications of both the existing and alternative interpretations on each of the major Medicaid stakeholder groups. Based on that analysis, this IFC adopts a blended approach. It is intended to balance the interests of states, providers, and beneficiaries, without materially undermining their ability to address the challenges presented by COVID-19.

Looking first at states, the circumstances facing each state during the PHE for COVID-19 are different. States have sent a strong message to CMS that they need more flexibility to make choices that meet their unique needs. They have made clear that our existing interpretation of section 6008(b)(3) of the FFCRA has interfered with their ability to implement cost-saving decisions in the face of increasing beneficiary enrollment and declining state revenues. The enrollment interpretation would allow states to impose coverage limitations that reduce spending and allow for better management of state programs during the PHE for COVID-19. More flexibility in managing their programs could help states to stretch scarce financial resources over the long term, including after the PHE for COVID-19 ends, and that could ultimately benefit both providers and beneficiaries. Supporting states and providers fighting the pandemic is consistent with the protections and the various provider relief funds established by Congress in the FFCRA, the CARES Act, and the PPPHCEA.

While the enrollment interpretation of section 6008(b)(3) of the FFCRA may be the preferred option for states, we recognize that it could negatively impact certain provider types. Under the enrollment interpretation, states could eliminate optional benefits. For example, a state could cut its optional dental benefit, and dentists in that state would lose Medicaid reimbursement. CMS's existing interpretation, however, leaves states with little ability to manage program costs other than by cutting provider rates to the fullest extent permitted under section 1902(a)(30)(A) of the Act. We believe such rate cuts represent a far more significant threat to providers and their continued availability to beneficiaries. Under the enrollment interpretation, states may be less likely to reduce provider rates, which could benefit both providers and beneficiaries.

Considering the impact on beneficiaries, our existing interpretation provided the strongest protections for beneficiary access to medically necessary care during the PHE. It ensured that beneficiaries remained enrolled in Medicaid and that no new coverage restrictions were imposed. Every Medicaid beneficiary who had access to MEC and to testing services and treatment for COVID-19 as of or after March 18, 2020 would continue to have access to these services under the existing interpretation. The enrollment interpretation would also protect beneficiary enrollment in Medicaid. At the same time, it would expand state flexibility to make cost-saving decisions that could reduce beneficiaries' coverage below what they had access to as of or after March 18, 2020. Under the enrollment interpretation, some beneficiaries would be transitioned from MEC to non-MEC coverage, which may not include testing services and treatment for COVID-19 pursuant to CMS's interpretation of FFCRA section 6008(b)(4). Ensuring access to testing and treatment, along with care for the chronic health conditions that place beneficiaries at higher risk for COVID-19, is important for fighting the pandemic.

Seeking to balance the needs of each stakeholder group, both in fighting the pandemic and ensuring long-term program sustainability, this IFC adopts a blended approach to interpreting section 6008(b)(3) of the FFCRA. This blended approach adopts the state flexibility available through the enrollment interpretation—allowing states to make programmatic cha

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