Medicare Program; Implementing Certain Provisions of the Consolidated Appropriations Act, 2021 and Other Revisions to Medicare Enrollment and Eligibility Rules

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 400, 406, 407, 408, 410, 423, 431, and 435

[CMS-4199-F]

RIN 0938-AU85

Medicare Program; Implementing Certain Provisions of the Consolidated Appropriations Act, 2021 and Other Revisions to Medicare Enrollment and Eligibility Rules

AGENCY:

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

ACTION:

Final rule.

SUMMARY:

This final rule implements certain provisions of the Consolidated Appropriations Act, 2021 (CAA). Additionally, we are proposing to delete references to specific Medicare forms from the text of existing regulations at §§ 406.7 and 407.11 in order to provide greater administrative flexibility. Finally, this final rule updates the various federal regulations that affect a State's payment of Medicare Part A and B premiums for beneficiaries enrolled in the Medicare Savings Programs and other Medicaid eligibility groups.

DATES:

This final rule is effective on January 1, 2023, except for the addition of §  407.47(f) at instruction 21, which is effective on January 1, 2024.

FOR FURTHER INFORMATION CONTACT:

Major Bullock, (410) 786-8974, or Steve Manning (410) 786-1961—General questions.

Steve Manning, (410) 786-1961, or Carla Patterson (410) 786-8911—For inquiries related to section 120 of the CAA.

Gail Sexton, (410) 786-4583, or Major Bullock, (410) 786-8974—For inquiries related to section 402 of the CAA.

Melissa Heitt, 410-786-4494—For inquiries related to section 402(f) (Medicare Savings Programs) of the CAA.

Carla Patterson, (410) 786-8911—For inquiries related to the Medicare enrollment form.

Kim Glaun, (410) 786-3849—For inquiries related to State payment of Medicare premiums.

SUPPLEMENTARY INFORMATION:

I. Summary

A. Beneficiary Enrollment Simplification in Medicare Parts A and B—Background and Proposal Summary

Medicare is a Federal program to provide health insurance for people age 65 and older, and those under 65 with certain disabilities or End-Stage Renal Disease (ESRD). Medicare consists of four distinct parts, commonly referred to as Medicare Parts A, B, C and D. Medicare Part A, sometimes referred to as hospital insurance (HI), covers inpatient hospital services, skilled nursing care, hospice care, and some home health services. Individuals must meet certain conditions to be entitled to Part A. Medicare Part B, or supplementary medical insurance (SMI), is an optional benefit that helps cover medically necessary services and supplies like physicians' services, durable medical equipment (DME), outpatient care, and other medical services that Part A does not cover, including many preventive services. Together, Medicare Parts A and B comprise “original” or “traditional” Medicare. Most beneficiaries are automatically enrolled in Part A and Part B by the Social Security Administration (SSA) or the Railroad Retirement Board (RRB) when they turn 65 because they are already receiving social security or RRB retirement benefits. In addition, if an individual has been receiving Social Security or Railroad Retirement Disability benefits for 24 months, they will automatically be enrolled by SSA or the Railroad Retirement Board in Medicare Parts A and B.

The first opportunity individuals have to enroll in Part B is during their initial enrollment period (IEP). The IEP is a 7-month period that usually begins 3 months before the month in which an eligible individual turns 65 and ends 3 months after the first month of eligibility. The next opportunity for eligible individuals who do not enroll in Part B during their IEP to enroll in Part B, if they choose to do so, is in the general enrollment period (GEP) which runs from January 1st through March 31st each year. Currently, an individual's entitlement (coverage period effective date) under Part B depends on the enrollment period and the month in which the individual enrolls, according to the requirements in sections 1837 and 1838 of the Social Security Act (the Act).

For those who enroll in Medicare Part B during any of the first 3 months of their IEP, coverage is effective the first month they become eligible for Medicare (such as age 65 or the 25th month of entitlement to monthly Social Security or railroad retirement benefits based on disability). However, for those who enroll in any of the last 4 months of their IEP, their coverage becomes effective after their month of enrollment, with the effective date of coverage varying depending on the month in which they enroll. For eligible individuals who enroll during the GEP, coverage is effective the July 1 following the month in which the individual enrolls.

Section 120 of the Consolidated Appropriations Act, 2021 (CAA), Public Law (Pub. L.) 116-260, Division CC, title I, section 120 (December 27, 2020), modified the requirements in section 1838 of the Act, pertaining to individuals enrolling in Part B after not being automatically enrolled, or who are re-enrolling in Part B after disenrollment. Specifically, the CAA revised sections 1838(a)(2)(C), 1838(a)(3)(A), and 1838(a)(2)(D) of the Act to provide that for individuals who become eligible for Medicare on or after January 1, 2023, and enroll in Part B during the last 3 months of their IEP, entitlement would begin the first day of the month following the month in which they enroll. We proposed conforming changes to our regulations at 42 CFR part 407 to implement these Part B changes. In addition, while the statutory provisions of section 120 of the CAA primarily affect individuals enrolling in Part B, those changes will also affect the requirements applicable to the limited number of individuals enrolling in Part A who are not entitled to premium-free Part A. We proposed conforming modifications to our regulations at 42 CFR part 406 to reflect those Part A changes.

Additionally, section 120 of the CAA established new section 1837(m) of the Act, which provides authority for the Secretary of the Department of Health and Human Services (HHS) (the Secretary) to establish special enrollment periods (SEPs) for individuals who are eligible to enroll in Medicare and meet such exceptional conditions as the Secretary may provide, effective January 1, 2023. Corresponding changes in section 1838(g) of the Act provides the Secretary the discretion to determine the effective date of entitlement for individuals who enroll under an SEP for exceptional conditions, and amendments to section 1839(b) of the Act exempt individuals enrolling under such an SEP from being subject to a late enrollment penalty (LEP). We proposed to establish several SEPs for exceptional conditions that would be incorporated

in our regulations under 42 CFR parts 406 and 407.

B. Extended Coverage of Immunosuppressive Drugs for Certain Kidney Transplant Patients—Background and Proposal Summary

ESRD is a medical condition in which a person's kidneys cease functioning permanently, leading to the need for a regular course of long-term dialysis or a kidney transplant to maintain life. A kidney transplant is ultimately considered the best treatment for ESRD. Section 226A of the Act includes a provision that enables certain individuals diagnosed with ESRD to be entitled to Medicare, regardless of age. If an individual with ESRD applies for Medicare and is entitled to Medicare Part A and eligible for Part B benefits, Medicare provides coverage for all covered medical services, not only those related to the kidney failure condition. When an individual receives a kidney transplant, Medicare coverage extends for 36 months after the month in which the individual receives the transplant. Currently, after the 36th month, Medicare coverage ends unless the individual is eligible for Medicare on another basis, such as age or disability. Medicare Part B covers medical and other health services including, as specified in section 1861(s)(2)(J) of the Act, prescription drugs used in immunosuppressive therapy furnished to an individual who receives an organ transplant for which Medicare payment is made. Kidney transplant recipients must take immunosuppressive drugs to help prevent their immune systems from rejecting the transplanted kidney. If a transplanted kidney is rejected, the individual would revert to ESRD status and again need dialysis treatment or another transplant.

Under current law, Medicare Part B beneficiaries have coverage for such immunosuppressive drug therapy for as long as they remain eligible for and enrolled in Medicare Part B. However, section 226A(b)(2) of the Act currently requires that entitlement to Medicare Part A and eligibility to enroll under Part B for ESRD beneficiaries ends with the 36th month after the month in which the individual receives a kidney transplant (see also 42 CFR 406.13(f)(2)). Section 402 of the CAA amended sections 226A(b)(2) (and made conforming changes to sections 1836, 1837, 1838, 1839, 1844, 1860D-1, 1902, and 1905 of the Act) to make certain individuals eligible for enrollment under Medicare Part B solely for the purpose of coverage of immunosuppressive drugs described in section 1861(s)(2)(J) of the Act. Effective January 1, 2023, this provision allows certain individuals whose Medicare entitlement based on ESRD would otherwise end after a kidney transplant to continue enrollment under Medicare Part B only for the coverage of immunosuppressive drugs described in section 1861(s)(2)(J) of the Act. These individuals would not receive Medicare coverage for any other items or services (under either Part A or Part B), and would only be eligible for immunosuppressive drug coverage under Part B if they are not enrolled in certain other types of coverage, as described in “Eligibility for the Part B-ID Benefit” (section II.B.2.b. of this final rule). Section 402 of the CAA also amended the Medicare Savings Programs (MSPs) under sections 1905(p)(1)(A) and 1902(a)(10)(E) of the Act to pay the Part B premiums and in some cases the costs of the Part B deductible and coinsurance for immunosuppressive drug coverage for certain low-income individuals.

C. Simplifying Regulations Related to Medicare Enrollment Forms—Background and Proposal Summary

Individuals who receive monthly Social Security or railroad retirement benefits at age 65 or have been entitled to monthly Social Security or railroad retirement benefits based on disability benefits for more than 24 months, are automatically entitled to Part A and do not have to file a separate application in order to enroll in premium-free Part A. These individuals are automatically enrolled (auto-enrolled) by the Social Security Administration or the Railroad Retirement Board into Part A when they reach age 65 or their 25th month of entitlement to Social Security or railroad retirement benefits based on disability. Individuals who become eligible for premium-free Medicare but who are not auto-enrolled, either because they have delayed receiving Social Security or railroad retirement benefits, or are not eligible for such benefits but are otherwise eligible to receive premium-free Medicare part A based on paying the Medicare payroll tax, must file a separate application to enroll in Medicare. Individuals who decide to collect Social Security benefits after they reach age 65, and thus did not get auto-enrolled in Medicare by virtue of receiving Social Security benefits, may use their application for Social Security benefits, as defined in 42 CFR 400.200, to apply for Medicare if they are eligible for Part A at that time. Individuals may also separately request enrollment in Part B by answering the Part B enrollment questions on an application for monthly Social Security retirement or spousal benefits. As an alternative, individuals may enroll in Part B by signing a simple statement of request, if they are eligible to enroll at that time.

Currently, there are a total of seven enrollment forms for traditional Medicare—two enrollment forms for Part A and five enrollment forms for Part B, in §§ 406.7 and 407.11, respectively. Medicare enrollment forms are available to individuals via mail from CMS or SSA, downloadable via the CMS

1

and SSA

2

websites, or in person at SSA field offices. CMS and SSA periodically review the enrollment forms to determine if updates are necessary to comply with statutory, regulatory, or operational changes. Our regulations currently identify each form by name and provide a brief description of its uses.

1

https://www.cms.gov/Medicare/CMS-Forms/CMS-Forms/CMS-Forms-List

.

2

https://www.ssa.gov/forms/

.

We proposed to remove references to individual enrollment forms from our regulations, including their titles and brief descriptions, to provide greater administrative flexibility in updating, adding, or removing forms in the future. We also proposed to make technical edits to the text at § 406.7 to state that an individual who files an application for monthly Social Security cash benefits as defined in § 400.200 also applies for Medicare entitlement if he or she is eligible for hospital insurance at that time. Current regulations do not define Social Security cash benefits. We proposed to provide more clarity on when a Social Security application also applies for Medicare entitlement to Part A.

D. Modernizing State Payment of Medicare Premiums—Background and Proposal Summary

Since the implementation of the original Medicare program in 1966, section 1843 of the Act has provided States the option to enter into an “agreement” with the Federal government under which a State commits to enrolling certain Medicare-eligible Medicaid beneficiaries into Medicare Part B with the State paying the Part B premiums on their behalf. Section 1903(a)(1) and (b) of the Act authorize federal financial participation (FFP) for such State payment of Part B premiums for certain dually eligible individuals. We have historically referred to this process as “State buy-in.” All 50 States and the District of

Columbia have buy-in agreements for Part B

3

with the Secretary.

3

Thirty-seven States (including the District of Columbia) also have buy-in agreements for Part A.

States pay Medicare Part B premiums for approximately 10 million individuals and Part A premiums for approximately 700,000 individuals each year who are not entitled to Part A without a premium. For an individual who is eligible for but not yet enrolled in Medicare, State buy-in serves to both enroll the individual in Medicare and enable the Federal Government to bill the State for the new beneficiary's Medicare premiums. For an individual who is already enrolled in Medicare, State buy-ins enable the Federal Government to bill the State for the individual's Medicare premiums and stop collecting the premiums through deductions from the beneficiary's monthly Social Security (Old Age Insurance or Disability benefits or Supplemental Security Income), Railroad Retirement Board (RRB), or Office of Personnel Management (OPM) benefits, or through CMS direct billing.

The impact of State buy-in is significant for many beneficiaries. Low-income individuals who receive assistance with Medicare premiums save critical funds to use for other necessities, including food and housing. Upon State buy-in, individuals who were paying the Medicare premiums through deductions from their Social Security benefits see a notable increase in their monthly social security checks (the standard Part B premium will be $164.90 per month in 2023), and individuals eligible but not enrolled in Medicare are able to enroll in the program and access Medicare services.

We proposed several technical updates to the regulations pertaining to State buy-in that would better align them with federal statute, policy and operations that have evolved over time. We also proposed revising the regulations to provide that approved State plan provisions governing the buy-in process constitute a State's buy-in agreement and limiting retroactive Medicare Part B premium liability for States for full-benefit dually eligible beneficiaries.

II. Provisions of the Proposed Rule and Analysis of and Responses to Public Comments

A. Proposals for Beneficiary Enrollment Simplification (§§ 406.21, 406.22, 406.27, 406.33, 406.34, 407.23, 407.25, and 408.24)

1. Effective Dates of Entitlement

While the majority of individuals are automatically enrolled in Medicare Parts A and B upon reaching age 65 or when they have been entitled to monthly Social Security or railroad retirement benefits based on disability for more than 24 months, certain individuals are required to take active steps to enroll. Specifically, individuals who are eligible for, but not receiving, monthly Social Security benefits under section 202 of the Act or qualified RRB benefits when they turn 65, are not auto-enrolled because they have elected not to start receiving their Social Security or RRB benefits and have not filed an application for Social Security or RRB benefits and must take separate action to apply for Medicare. Certain individuals who are entitled to premium free Part A through government employment, but are not eligible for Social Security or RRB benefits also have to take action to apply for Medicare. Individuals may apply for Part A at any time, but can only apply for Part B during a specific enrollment period (IEP, GEP, or SEP). Further, under section 1818 of the Act, certain individuals who are not otherwise entitled to Part A but meet certain requirements, are eligible to enroll in Part A. These individuals are required to pay monthly premiums under section 1818(d) of the Act, and this benefit is frequently referred to as “premium Part A.” These individuals are required to take active steps to enroll in premium Part A and Part B.

•

IEP:

The period during which individuals eligible for premium Part A are entitled to receive benefits under Medicare, also known as the coverage period, can vary depending on when the individual enrolls. The first opportunity individuals have to enroll in Part B is during their IEP. Section 1837(d) of the Act defines the IEP for most individuals who become eligible for Medicare on or after March 1, 1966. For individuals age 65 and older enrolling in Part A, the IEP is the 7-month period that begins 3 months before the month in which the individual is first eligible for Medicare and ends 3 months after the first month of eligibility.

•

Deemed IEP:

Section 1837(d) of the Act also defines what is commonly referred to as the “deemed IEP.” When an individual fails to enroll during their IEP because of a belief, based on documentary evidence, that he or she had not yet attained age 65, section 1837(d) of the Act requires the Secretary to establish an IEP for such individual based on the time shown in such documentary evidence of the individual attaining age 65. Such individuals are considered “deemed” to have enrolled for purposes of section 1838(a)(3) of the Act, and these individuals are subject to entitlement periods consistent with those for individuals not subject to a deemed initial enrollment period under 42 CFR 407.14.

•

GEP:

Eligible individuals who do not enroll in Part B during their IEP or deemed IEP, or who disenroll from Part B and wish to re-enroll, must generally do so during the GEP. The GEP is established under section 1837(e) of the Act, and is the period beginning on January 1 and ending on March 31 of each year.

Section 1838(a) of the Act establishes the beginning of entitlement for Part B for individuals who enroll in their IEP or GEP. According to the current requirements established under sections 1838(a)(2)(A) and 1838(a)(3)(A) of the Act individuals who become eligible to enroll in Medicare under section 1836(a) of the Act before January 1, 2023, and enroll:

• During the first 3 months of their IEP or deemed IEP, their entitlement would begin on the first day of the month they turn 65.

• The month in which they become eligible, sections 1838(a)(2)(B)(i) and 1838(a)(3)(B)(i) of the Act currently specify that their entitlement begins with the first day of the month following the month in which they enroll.

• The month in which they satisfy the requirements of section 1836(a) of the Act, their entitlement would begin with the first day of the second month after the month in which they enroll under sections 1838(a)(2)(B)(ii) and 1838(a)(3)(B)(i) of the Act.

• During the last 2 months of their IEP or deemed IEP, their entitlement under Medicare would be effective beginning with the first day of the third month after the month in which he or she enrolls according to sections 1838(a)(2)(B)(iii) and 1838(a)(3)(B)(i) of the Act.

• Under the GEP sections 1838(a)(2)(D)(i) and 1838(a)(3)(B)(i) provide that their entitlement would begin with the first of July following their enrollment.

Section 120(a)(1) of the CAA revised the entitlement periods for individuals who enroll in Medicare Part B in the last 3 months of their IEP, deemed IEP, or

during the GEP, beginning January 1, 2023. Specifically, the CAA modified section 1838 of the Act such that revised section 1838(a)(2)(C) and (a)(3)(B)(ii) of the Act provide that for a Medicare eligible individual who satisfies the requirements of section 1836(a) of the Act (

i.e.,

is entitled to Part A, or, is age 65, a resident of the United States, and is either (A) a citizen or (B) an alien lawfully admitted for permanent residence who has resided in the United States continuously during the 5 years immediately preceding the month in which he applies for enrollment), in a month beginning on or after January 1, 2023, and who enrolls in the month in which they satisfy those requirements, or in any subsequent month of their IEP, the individual's entitlement would begin with the first day of the month following the month of enrollment. The CAA also revised sections 1838(a)(2)(D)(ii) and 1838(a)(3)(B)(ii) of the Act to provide that for individuals who enroll during the GEP in a month beginning on or after January 1, 2023, their entitlement would begin with the first day of the month following the month in which they enroll. An example of the current entitlement dates compared to the revisions made by the CAA is provided in the table:

Enrolls in IEP:

Prior to 1/1/23—Entitlement begins on:

On or After 1/1/23—Entitlement begins on:

January

April 1 (month eligibility requirements first met)

April 1 (month eligibility requirements first met).

February

April 1

April 1.

March

April 1

April 1.

April

May 1 (month following month of enrollment)

May 1.

May

July 1 (second month after month of enrollment)

June 1.

June

September 1 (third month after month of enrollment)

July 1.

July

October 1 (third month after month of enrollment)

August 1.

January

July 1

February.

February

July 1

March.

March

July 1

April.

As shown in the chart, the changes made to section 1838(a) of the Act according to section 120 of the CAA directly affect the requirements for individuals enrolling in Part B. However, these changes will also impact certain individuals enrolling in Part A. Section 1818(c) of the Act specifically requires in part that the provisions of section 1838 of the Act apply to individuals enrolling in premium Part A for purposes of determining the period of enrollment and other aspects of coverage. In light of this statute, the revised entitlement periods established in section 1838(a) of the Act will also apply to premium Part A enrollees.

To implement the changes to 1838(a) of the Act, we proposed to revise language in both 42 CFR part 406 (for premium Part A) and 42 CFR part 407 (for Part B). Specifically, we proposed the following to reflect changes related to the start of entitlement for premium Part A IEP enrollments as summarized:

• Revised § 406.22(a) would apply the existing requirements governing the entitlement period for individuals who are age 65 or older before January 1, 2023 who enroll in premium Part A during their IEP.

• New § 406.22(b) would lay out the entitlement dates for individuals who attained age 65 on or after January 1, 2023, and who enroll during their IEP, including a deemed IEP.

• Newly redesignated and revised § 406.22(c) would apply the existing entitlement date requirements for individuals under age 65 who became eligible for Medicare prior to January 1, 2023.

• New § 406.22(d) would set out the start dates for entitlement for individuals under age 65 who enroll in premium Part A on or after January 1, 2023.

We also proposed the following to reflect changes related to the start of entitlement for individuals enrolling in Part B during their IEP:

• Revised § 407.25(a)(1) applied the existing entitlement date requirements to individuals who first satisfy the Part B eligibility requirements before January 1, 2023 and enroll during their IEP or deemed IEP.

• Revised § 407.25(a)(2) applied new entitlement dates requirements to individuals who first satisfy the Part B eligibility requirements on or after January 1, 2023.

Section 120(a)(1)(A) of the CAA also modified section 1838(a)(2) of the Act, to address the beginning of the entitlement for individuals enrolling during their GEP according to 1837(e) of the Act. We proposed the following changes to reflect the updates in entitlement for individuals enrolling during the GEP:

• Revised § 406.21(c)(3) reflected the revised entitlement periods for individuals who enroll or reenroll during a GEP.

• Revised § 407.25(b)(1) specified that for individuals enrolling or reenrolling in Part B during a GEP before January 1, 2023, the current requirements governing the entitlement date would continue to apply.

• New § 407.25(b)(3) specified that for individuals who enroll or reenroll in Part B during a GEP on or after January 1, 2023, entitlement would begin the first day of the month following the month of enrollment.

We received a large number of comments related to our proposals for effective dates of entitlements. The comments on those proposals and our responses follow:

Comment:

All commenters on this proposal expressed support for the proposed changes to the effective dates. Many of the comments referred to the positive outcomes that will result from the proposal. The commenters expressed that the proposed changes to the effective dates will alleviate much of the confusion surrounding Medicare enrollment. Commenters also noted that the changes will ease the stress individuals face with regard to waiting months for their enrollment to start and allow them to receive coverage in a timelier manner. A few commenters noted that outreach and education materials, including translated materials, will need to be updated to reflect these changes.

Response:

We appreciate the overwhelming support for our proposal and thank those that took the time to give us feedback. We are in agreement with commenters that these changes will simplify the enrollment process and will result in a more efficient and positive experience for those seeking to enroll in Medicare. We will also take measures to update publications, training materials, and other outreach materials, as well as work with Medicare stakeholders, to update educational and outreach materials with the new changes. This includes that translation of materials into multiple different languages as needed.

Comment:

A commenter had a concern in regards to when the proposed changes would be implemented. Specifically, they stated that the Medicare Part A changes would be effective in 2023 and the Medicare Part B proposed changes would be effective in 2022, and they recommended that these proposals be implemented simultaneously.

Response:

We appreciate the feedback from the commenter and clarify that, as proposed, these changes for both Medicare Parts A and B are effective for enrollments on or after January 1, 2023. This timeframe is also articulated in Section 120 of the CAA.

Comment:

Another commenter expressed concern for individuals that may wish to delay their coverage to begin after retirement and provided an example of a teacher that becomes Medicare eligible in the fall but wishes to delay enrollment until retirement in May. The commenter requested an arrangement be made in this regulation to allow for individuals to delay enrollment until retirement.

Response:

When an individual is determining their plan for enrollment and considering when they want their Medicare coverage to become effective, they should keep in mind all enrollment opportunities available, such as the various enrollment periods and the group health plan (GHP) SEP (Sections 1837(i)(1) through (3)), which has different rules for when coverage becomes effective. The GHP SEP allows individuals to enroll at a later date as long as they were covered under insurance through their employer. Those wishing for their coverage to begin after retirement may be eligible and could consider this option.

Comment:

A few commenters expressed support for the proposed changes but provided feedback on areas that were not addressed in the proposed rule. A commenter believed that the 2-year waiting period to receive Medicare while receiving Social Security Disability Insurance (SSDI) benefits is too long and that SSDI beneficiaries seeking to enroll in Medicaid should not have to adhere to any income restrictions or waiting periods. Another commenter suggested that we include more detailed language related to beneficiary coverage through telehealth. Lastly, a commenter suggested that we update the SEP for Medicare Advantage Prescription Drug Plan or stand-alone Part D Prescription Drug Plan during the Part B GEP (located at § 423.38(c)(16)) to align with the changes in the proposed rule.

Response:

We thank the commenters for their support of the proposed changes but note that these areas are outside of the scope of this rulemaking.

We appreciate the feedback that we received on the entitlement date changes from commenters. Based on analysis of the public comments, we will be finalizing the proposals related to entitlement effective dates as proposed.

2. Special Enrollment Periods for Exceptional Conditions

Under normal conditions, individuals who want to enroll in premium Part A, Part B, or both must submit a timely enrollment request during their IEP, the GEP, or an existing SEP for which they are eligible. Those who fail to enroll during their IEP may face an LEP

4

and a potential gap in coverage. Prior to the enactment of the CAA, CMS did not have broad authority to create SEPs based on exceptional conditions for enrollees in Medicare Parts A and B.

5

Section 120(a)(2)(A) of the CAA established section 1837(m) of the Act to provide the Secretary with authority to establish SEPs for individuals who satisfy the requirements in paragraph (1) or (2) of section 1836(a) of the Act, and meet such exceptional conditions as the Secretary may provide, beginning January 1, 2023. Section 120 of the CAA also created section 1838(g) of the Act to provide the Secretary the discretion to determine the entitlement period for individuals who enroll pursuant to an SEP established according to section 1837(m) of the Act, in a manner that protects the continuity of health benefit coverage to the extent practicable. The CAA also modified section 1839(b) of the Act to exempt individuals who enroll pursuant to an SEP for exceptional conditions established under section 1838(m) of the Act, from paying an LEP. Section 1818(c) of the Act provides that individuals enrolling under premium Part A are generally afforded the same enrollment opportunities as those available under Part B, so our proposals would apply to both premium Part A and Part B, except where noted. Several SEPs currently exist that permit individuals to enroll in premium Part A or Part B outside of the IEP or GEP, including the following:

4

An LEP is an amount added to the monthly premium that can be applied to individuals who do not sign up during their IEP. See 42 CFR 406.32(a) and 408.22.

5

CMS has separate authority for Medicare Parts C and D under sections 1851(e)(4)(d) and 1860D-1(b)(3)(C) of the Act, respectively.

• Sections 1837(i)(1) through (3) of the Act provide an SEP for certain individuals who are enrolled in a qualified group health plan (GHP) or large GHP (LGHP) at the time they first become eligible for Medicare and elect not to enroll (or to be deemed enrolled) in Medicare during their IEP.

• Section 1837(i)(4) of the Act establishes an SEP for certain individuals who, when first eligible for Medicare, were enrolled in a group health plan (GHP) or large group health plan (LGHP) by reason of their own (or a family member's) current or former employment, and whose coverage ended at a time when enrollment in the plan was not based on current employment.

• Section 1837(k) of the Act establishes an SEP for individuals serving as volunteers outside the United States at the time they first become eligible for Medicare, through a program covering at least a 12-month period, sponsored by a 501(c)(3) tax exempt organization, and who demonstrate health insurance coverage while serving in the program.

• Section 1837(l) of the Act establishes a 12-month SEP for certain individuals who are enrolled in TRICARE and become eligible to enroll in Part A on the basis of disability or ESRD status under sections 226(b) or 226A of the Act, respectively, but who elect not to enroll (or to be deemed enrolled) during their IEP.

There is an appeal process, under SSA guidance, for individuals who are denied for one of the current SEPs. If an individual disagrees with an initial determination or decision, they may request further review under the administrative review process, also known as the appeal process. This process will also apply to the newly established SEPs. We proposed to establish five new exceptional conditions SEPs under section 1837(m) of the Act in §§ 406.27 and 407.23 of the regulations for Medicare parts A and B, respectively. These five SEPs are for individuals impacted by an emergency or disaster, health plans or employers misrepresenting or providing incorrect information, the termination of Medicaid coverage, formally incarcerated, and other exceptional conditions. We proposed that these SEPs would be available to individuals who miss an IEP, GEP, or another SEP, such as the GHP SEP, due to a covered exceptional condition. (We note that in discussing these changes in the preamble of the proposed rule at 87 FR 25092, 25126, and 25128 we erroneously referred to § 407.22 instead of § 407.23 and are now correcting that error.)

In determining what new exceptional conditions SEPs would be beneficial to the Medicare program and its beneficiaries and that should be established in regulations, we

considered numerous factors including the following:

• Whether the conditions that caused the individual to miss an enrollment period are “exceptional” as required under the CAA, and whether the conditions are likely to be a one-time event.

• The SEP should not create an incentive for individuals to delay timely enrollment into Medicare.

• The SEP should not create an incentive for individuals to not educate themselves about the importance of enrolling in Medicare timely and make informed decisions during other available enrollment periods.

• Whether an SEP would be the most appropriate resolution to the exceptional conditions in question and whether other remedies such as individualized equitable relief under section 1837(h) of the Act, would more appropriately apply.

• The SEP should be expected to apply to a significant number or broad category of individuals, which would justify the establishment of a specific SEP in regulation instead of relying on the Secretary's authority under section 1837(h) of the Act to evaluate individual conditions and approve SEPs on a case-by-case basis.

With these parameters in mind, we leveraged our previous program experience with Medicare enrollment in determining which SEPs to propose. We also considered the SEPs for exceptional conditions established under Medicare Parts C and D (section 1851(e)(4) of the Act), the Health Insurance Marketplace (29 U.S.C. 1163), and commercial health plans for insight into what SEPs are available in both public and private healthcare settings. Finally, we also considered whether the proposed new SEPs and the associated entitlement would protect access to continuous coverage for individuals eligible for Medicare Part A and Part B, such as through expediting individuals' entitlement date or by creating opportunities for individuals to enroll in coverage sooner.

Based on these considerations, we proposed to establish five SEPs under Medicare Parts A and B based on the Secretary's authority in section 1837(m) of the Act. Four of the proposed SEPs address specific exceptional conditions. One SEP would permit CMS or SSA to evaluate individuals' particular conditions and grant SEPs on a case-by-case basis due to unanticipated conditions that may arise in the future.

To accommodate these changes, we proposed to establish a new § 406.27, entitled “Special enrollment periods for exceptional conditions” to provide SEPs for individuals who missed enrolling in premium Part A during an enrollment period due to exceptional conditions. Similarly, we proposed to establish a new § 407.23, also entitled “Special enrollment periods for exceptional conditions” to provide SEPs for individuals who missed enrolling in Part B during an enrollment period due to exceptional conditions. Both proposed §§ 406.27(a) and 407.23(a) provided in part that the SEPs for exceptional conditions would be available beginning January 1, 2023. Specifically, the proposed SEPs for exceptional conditions would be applicable for exceptional conditions that took place on or after January 1, 2023 with the exception of the SEP to Coordinate with Termination of Medicaid Coverage discussed in section II.2.d. of this final rule.

a. Late Enrollment Penalties Associated With Special Enrollment Periods for Exceptional Conditions

Section 120(a)(2)(C)(ii) of the CAA modified section 1839(b) of the Act and provides that individuals who enroll during an SEP established under the Secretary's authority under new section 1837(m) of the Act are not subject to the LEP. Specifically, section 1839(b) of the Act, as amended, provides that an individual who enrolls in Medicare “after his initial enrollment period [. . .] and not pursuant to a special enrollment period under subsection (i)(4), (l), or (m) of section 1837 [. . .] shall be increased by 10 percent of the monthly premium so determined for each full 12 months (in the same continuous period of eligibility) in which he could have been but was not enrolled.” Therefore, we proposed the following:

• For enrollments on or after January 1, 2023 under one of the SEPs established pursuant to the Secretary's authority in section 1837(m) of the Act and established in § 406.27 (Special enrollment periods for exceptional conditions), we proposed at § 406.33(c)(2) that any months of non-coverage would be excluded from the calculation of the LEP.

• For enrollments on or after January 1, 2023 under one of the SEPs established pursuant to the Secretary's authority in section 1837(m) of the Act and established in § 407.23 (Special enrollment periods for exceptional conditions), we proposed at § 408.24(b)(2) that any months of non-coverage would be excluded from the calculation of the LEP.

• For individuals who reenroll prior to January 1, 2023, we proposed at §§ 406.34(a) and 408.24(c) that requirements currently in place for determining the months taken into account for purposes of calculating the LEP would continue to apply.

• For reenrollments on or after January 1, 2023, pursuant to one of the SEPs for exceptional conditions established under the Secretary's authority in section 1837(m) of the Act and promulgated in §§ 406.27 or 407.23, respectively, we proposed at §§ 406.34(e) and 408.24(d)(2)(ii) that any months of non-coverage would be excluded from the calculation of the LEP. We clarified in the proposed rule that if the individual fails to enroll or reenroll during the available exceptional condition SEP, any months of non-coverage, including the months during the exceptional condition SEP, would be taken into consideration for calculating the LEP in accordance with §§ 406.33, 406.34, and 408.22.

We received a large number of comments related our proposed SEPs. The discussion pertains to comments related to our overall SEP authority and provides our responses to those comments.

Comment:

Commenters supported the five proposed SEPs, including CMS's proposal to exclude months of non-coverage from the calculation of the LEP, and several commenters applauded our efforts to expand access to Medicare coverage with this new rule. Many cited that these new SEPs would add to the agency's commitment to health equity by helping to reduce disparities. A commenter stated that “these provisions may also help maintain the financial viability of the emergency care safety net.” Similarly, others agreed with our reasoning for these proposed SEPs, stating that they would address several of the barriers to timely Medicare enrollment and reduce coverage gaps and access to healthcare, including mental health services.

Response:

We thank all commenters for their support on the five proposed SEPs. Many of the inferences trumpeted by the commenters align with our reasoning for proposing these provisions. We remain committed to advancing health equity for all by improving access and eliminating barriers, to Medicare.

Comment:

A commenter strongly encouraged CMS and SSA to use existing data resources to automatically apply these SEPs for individuals who are able to provide basic documentation with their enrollment materials. They added that CMS and SSA should include information about how the process will be streamlined with notification of the SEP. Furthermore, this commenter urged CMS to consider

alternative communication methods, in addition to mail, to ensure individuals are aware of the SEPs.

Response:

We appreciate the suggestion to ease processes for beneficiaries, but we are unable to automatically apply these SEPs for individuals who wish to enroll in Medicare. Use of the proposed SEPs requires that an individual misses their enrollment period due to a qualifying event. For us to know that information, the individual must initiate contact with SSA, which will allow SSA to verify their validity for an exceptional condition SEP. For these reasons, we decline to adopt the commenter's recommendation to automatically apply this SEP to eligible individuals at this time, but we may consider options to work closely with stakeholders to streamline processes in future rulemaking. In regard to alternative methods of communication, we appreciate the suggestion, and CMS is committed to updating our websites and working with stakeholders to ensure adequate awareness of the availability of these new SEPs as appropriate.

Comment:

A commenter was concerned that the proposed SEPs were limited to a narrow group of individuals who were specifically enrolled in a group health plan when they first became eligible to enroll in Medicare.

Response:

To clarify, the proposed exceptional condition SEPs are available to any individual who qualifies and are not specific to those enrolled in a group health plan when first eligible for Medicare.

b. SEP for Individuals Impacted by an Emergency or Disaster

We proposed an SEP for individuals impacted by a government-declared emergency or disaster under the Secretary's authority to establish SEPs beginning January 1, 2023, under section 1837(m) of the Act. Establishing such an SEP would permit the agency to provide immediate relief to individuals impacted by certain government-declared emergencies and disasters without being subject to the requirements applicable under our existing equitable relief authority.

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These SEPs would apply for individuals enrolling in premium Part A or Part B and would eliminate potential gaps in coverage and otherwise applicable LEPs resulting from eligible individuals' inability to submit a timely enrollment request as a result of emergency or disaster.

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Equitable relief (section 1837(h) of the Act) is the tool by which we correct or eliminate inequity to the individual when their Medicare enrollment rights are prejudiced because of the error, misrepresentation, or inaction of the federal government.

The proposed parameters of this SEP were as follows:

• At new §§ 406.27(b) and 407.23(b), we proposed to create an SEP for individuals prevented from submitting a timely Medicare enrollment request by an emergency or disaster declared by either a Federal, State, or local government.

• At new §§ 406.27(b)(1) and 407.23(b)(1), we proposed that the SEP would be available to those who were not able to enroll in premium Part A or Part B or both if they reside (or resided) in an area for which a Federal, State or local government entity newly declared a disaster or other emergency. The individual must demonstrate that they reside (or resided) in the area during the period covered by that declaration.

• At §§ 406.27(b)(2) and 407.23(b)(2), we proposed that the SEP would begin on the date an emergency or disaster is declared, or if different, the start date identified in the declaration, whichever is earlier, so long as the date is on or after January 1, 2023. The SEP ends 2 months after the declaration has been determined to have ended or revoked. If the declaration is extended, the SEP ends 2 months after the end date of any extensions. We specifically requested comments regarding whether we should limit the time frame of the SEP based on the type of emergency, or specify that the type of emergency must explicitly restrict an individual's ability to enroll.

• We proposed in §§ 406.27(b)(3) and 407.23(b)(3), according to the Secretary's authority under section 1838(g) of the Act to specify the coverage period for individuals enrolling during SEPs established under section 1837(m) of the Act, that the coverage period for individuals who enroll under this SEP would begin the first day of the month following the month of enrollment, so long as the date is on or after January 1, 2023.

We received the following comments on the SEP for Individuals Impacted by an Emergency or Disaster:

Comment:

Commenters expressed strong and broad support for the establishment of this SEP. Commenters agree that this SEP would help mitigate disparities related to the access of healthcare for Medicare beneficiaries residing in areas impacted by disasters or emergencies. A few commenters suggested that the proposed duration of the SEP may not be enough time for individuals to recover from a disaster or emergency declaration has ended and one recommended the SEP extend a full year after the declaration has ended.

Response:

We appreciate the overwhelming support for this proposed SEP and thank those that gave us feedback. The vast majority of commenters expressed support for the SEP's duration, as proposed. However, we did receive comments suggesting that we extend the duration of the SEP beyond 2 months after the end of the emergency or disaster declaration. Upon review, we have decided to extend the SEP duration in order to provide greater flexibility for potential Medicare beneficiaries. Individuals will have the full duration of the emergency plus an additional 6 months to contact SSA to enroll in Medicare under this SEP. As such, we are revising §§ 406.27(b)(2) and 407.23(b)(2) to specify that the SEP begins on the earlier of the date an emergency or disaster is declared or, if different, the start date identified in such declaration and the SEP ends 6 months after the declaration has been determined to have ended or revoked. If the declaration is extended, the SEP ends 6 months after the end date of any extensions.

Comment:

A few commenters requested that CMS consider making the SEP applicable in situations where the individual may not live in an area impacted by a Federal, State or local government-declared disaster or emergency, but the person who makes healthcare decisions on behalf of that individual does, noting that it was consistent to what was allowed in Part C and Part D. Additionally, a commenter recommended that we ensure that moving forward the requirements related to this SEP remain equal across Medicare Parts A, B, C and D.

Response:

We thank commenters for this insight. Currently, in regard to the Medicare Part C and D emergency or disaster SEP, if a person who assists in making health care decisions on behalf of a Medicare enrollee is impacted by a government-declared emergency or disaster, then the SEP would be available to the enrollee. We would note that Medicare enrollees in Parts C and D have the option to make enrollment decisions on what plans best suit their financial and health care needs on an annual basis, and they often rely on friends and family members with these decisions. In contrast, enrolling in Parts A and B is normally a one-time decision that does not include the same level of complexity as Parts C and D enrollments. However, we do believe allowing some flexibility to individuals who require assistance in Medicare Parts A and B is important. As such, we will be revising §§ 406.27(b)(1) and 407.23(b)(1) to specify that the SEP is

also available if the individual did not live in an area impacted by a Federal, State or local government-declared disaster or emergency, but the individual's authorized representative (as defined at 42 CFR 405.910), their legal guardian, or the person who makes healthcare decisions on behalf of that individual, did live in such an impacted area.

Comment:

A commenter requested that we remove the requirement for the individual to submit proof of SSA office closings or mail disruptions, or provide proof that the emergency or disaster directly affected their ability to enroll in Medicare.

Response:

We appreciate the feedback but would like to clarify that impacted beneficiaries are not required to provide proof of SSA office closings or disruptions in mail service due to a disaster or emergency for this SEP. The individual must have missed an enrollment period in order to qualify for this SEP; however, the individual does not have to provide documented proof that the disaster or emergency impacted their ability to enroll as SSA will already have this information. Individuals or their authorized representative need only to demonstrate that they reside (or resided) in the area during the period covered by a disaster or emergency declaration.

Comment:

We solicited comments on whether we should limit the SEP timeframe based on the type of emergency or the explicit impact on the individual's ability to enroll. The majority of commenters believe such restriction would be harmful to individuals and administratively burdensome to the Social Security Administration, which is tasked with making enrollment determinations. Commenters believe it is extremely unlikely that anyone would intentionally delay Medicare enrollment in hopes of a tragedy. There also may be disasters or emergencies that do not impact an individual's ability to enroll in Medicare.

Response:

We agree with commenters and appreciate their feedback. The purpose of this SEP is to provide an enrollment opportunity for individual's impacted by an exceptional condition that may have impeded their ability to enroll during another valid enrollment period and as such we will not make any changes to the SEP timeframe based on the type of disaster or emergency.

We appreciate the support and feedback received from commenters. As discussed, we will be finalizing this SEP as proposed with the following modifications. We will be revising §§ 406.27(b)(1) and 407.23(b)(1) to specify that the SEP is also available if the individual did not live in an area impacted by a Federal, State or local government-declared disaster or emergency, but the individual's authorized representative (as defined at 42 CFR 405.910), legal guardian (as outlined by SSA), or person who makes healthcare decisions on behalf of the individuals, did live in such an impacted area. In addition, we will be revising §§ 406.27(b)(2) and 407.23(b)(2) to extend the duration of the SEP from 2 months to 6 months after the end of the emergency or disaster declaration.

c. SEP for Health Plan or Employer Misrepresentation or Providing Incorrect Information

In order to provide relief to individuals who missed an enrollment period because of misrepresentation by or incorrect information from their employer or GHP, we proposed to create a new SEP at § 406.27(c) and at § 407.23(c) based on exceptional conditions. We proposed that this SEP would apply for individuals whose non-enrollment in premium Part A or Part B is unintentional, inadvertent, or erroneous and results from material misrepresentation or reliance on incorrect information provided by the individual's employer or GHP, or any person authorized to act on behalf of the employer or GHP.

The proposed parameters of this SEP were as follows:

• At §§ 406.27(c)(1) and 407.23(c)(1) we proposed that an individual is eligible for such an SEP if they can demonstrate that he or she did not enroll in premium Part A or Part B during an enrollment period in which they were eligible based on information received from an employer or GHP, or any person authorized to act on such organization's behalf, and an employer, GHP or their representative materially misrepresented information or provided incorrect information relating to enrollment in premium Part A or Part B, so long as the misrepresentation or error occurred on or after January 1, 2023. We stated that to demonstrate material misrepresentation, an individual would be required to provide documentation of the relevant misrepresentation to SSA and that it must show that the information was provided on or after January 1, 2023, was directly from an employer, GHP or their representative prior to an enrollment period, and that the inaccuracy caused the individual not to enroll timely.

• At § 406.27(c)(2) and § 407.23(c)(2) we proposed that this SEP would begin the day the individual notifies SSA of the employer or GHP misrepresentation or incorrect information provided, so long as the misrepresentation or error occurred on or after January 1, 2023, and would end 2 months later.

• At §§ 406.27(c)(3) and 407.23(c)(3), we propose that the coverage period would begin the first day of the month following enrollment.

We received the following comments on the SEP for Health Plan or Employer Misrepresentation or Providing Incorrect Information:

Comment:

Commenters expressed general support for this SEP. Commenters indicated that this SEP will help to cure what they perceive to be one of the most widespread and common enrollment pitfalls facing beneficiaries and will potentially eliminate gaps in coverage. Multiple commenters, while supporting the SEP, recommended that we lower the evidence requirement for the SEP due to erroneous information that may have been provided orally or in another form in which the beneficiary may not be able to provide tangible evidence.

Response:

We acknowledge that employers and GHPs do not always communicate information in writing; therefore, it is reasonable to assume that individuals may not have tangible documentation to provide to SSA proving that they were misinformed by their employer or GHP. Not allowing an alternative type of documentation, other than written, would disadvantage beneficiaries who were misinformed through other communication methods. Upon review, we have decided to accept written attestation from the beneficiary when documented evidence from the employer or GHP is not available. We thank the commenters for their overall support, and agree with their assessment of the evidence requirement. We are modifying the regulations at §§ 406.27(c) and 407.23(c) to expressly permit the use of either documentation of misrepresentation or written attestation.

Comment:

Many commenters, while supporting the SEP, recommended that we include non-employer insurance sources, such as insurance agents and individual policy sellers, as well as non-federal government entities and agents, including Medicaid, the Marketplace, and State Departments of Insurance or similar as trusted sources of information. Commenters also recommended to expand the definition of misinformation to include employer or health plan omission of information.

Response:

Upon review, we agree that other non-employer insurance sources could be considered trusted sources of information. Agents and brokers of health plans could be considered as

extensions of an individual's health plan and play a critical role in informing individuals of their enrollment options. We have modified the language in the regulation text accordingly.

We are not adopting the suggested inclusion of non-federal government entities and agents, including Medicaid, the Marketplace, and State Departments of Insurance as trusted sources of information because this would substantially change the scope of this SEP. The purpose of this SEP is to provide relief to employees who have been misinformed by employers, GHPs, or agents or brokers of health plans. If another entity has misinformed the beneficiary, the individual may apply for relief under the SEP for Other Exceptional Conditions. Accordingly, we are revising §§ 406.27(c)(1)(i) and 407.23(c)(1)(i) to include brokers or agents of health plans as entities from whom the beneficiary may have received misinformation.

Comment:

Multiple commenters recommended that CMS expand the definition of misinformation to include employer or health plan omission of relevant information. For example, a commenter stated that an employer or health plan failing to convey pertinent information could impact an individual's decision making and cause them to miss their Medicare enrollment period.

Response:

While we understand that individuals need complete information about their options and responsibilities, the onus does not fall on the employer, GHP, or agents and brokers of health plans to provide any information that the individual requests. Information provided by these entities is often voluntary, as they are not legally obligated under the Medicare statute to provide any information to individuals related to Medicare enrollment. As such, we will not be revising this final rule to provide that omission of information can give support an SEP.

Comment:

Several commenters discussed beneficiaries' confusion with the interaction of COBRA coverage and Medicare, including that COBRA is not creditable coverage in the same way employer-group coverage is for Medicare and that COBRA cannot pay primary coverage once a person becomes eligible for Medicare. A few commenters recommended that enrollment in COBRA or retiree coverage alone should be used as evidence of misinformation, and therefore an individual in this circumstance should be considered eligible for the SEP.

Response:

While we understand that COBRA interaction with Medicare may be confusing, we are unable to make the assumption that enrollment in COBRA was caused by misinformation provided by an employer or group health plan. We cannot assume that the beneficiary did not deliberately choose to enroll in COBRA. As such, we do not consider this an exceptional condition and will not consider enrolling in COBRA alone as a basis for this SEP. If a beneficiary was erroneously instructed by an employer, group health plan, or agent and/or broker of the health plan to enroll in COBRA, they may provide the documented evidence or written attestation of the misinformation in order to qualify for the SEP. In addition, if there was another exceptional circumstance surrounding their enrollment in COBRA, they can apply for the SEP for other exceptional conditions.

Comment:

A commenter suggested that we increase the SEP duration from 2 months to 6 months to allow the beneficiary time to gather evidence of the misinformation.

Response:

We proposed that the SEP would end 2 months after the individual notified SSA of the misrepresentation and we believed this would be ample time since, in most cases, we assumed that the individual would enroll at the same time they identified the issue to SSA. However, upon review, we have decided to extend the SEP duration from 2 months to 6 months in order to provide greater flexibility for potential Medicare beneficiaries. In addition, we are modifying this SEP to allow for the acceptance of written attestation, which will allow an individual to provide evidence of misinformation even if they do not have or cannot find written evidence from their employer or health plan, it should not take longer than 6 months to satisfy the requirements of this SEP.

We appreciate the support and feedback received from commenters. As discussed, we will be finalizing this SEP as proposed with the following modifications:

• We are modifying §§ 406.27(c)(1) and 407.23(c)(1) to expressly permit the use of either documentation of misrepresentation or written attestation for this SEP.

• We are revising §§ 406.27(c)(1)(i) and 407.23(c)(1)(i) to include brokers or agents of health plans as entities that may have been a source of misinformation.

• We are revising §§ 406.27(c)(2) and 407.23(c)(2) to increase the SEP duration from 2 months to 6 months.

d. SEP for Formerly Incarcerated Individuals

Section 1862(a)(2) and (3) of the Act generally prohibits Medicare payment for otherwise covered services when the individual who is furnished the services is not obligated to pay for them (and no other person has a legal obligation to pay for them) and covered services that are paid for directly or indirectly by a governmental entity (other than under a health program under the Social Security Act). In implementing these provisions, CMS adopted a regulation that prohibits payment for otherwise covered services that are furnished while the recipient is in custody of penal authorities, as such individuals are provided healthcare through their penal institution. As a result, individuals who are enrolled in Medicare but who are in custody of penal authorities as described in 42 CFR 411.4(b) (here, “incarcerated” for brevity) are subject to a payment exclusion in Medicare so Medicare does not pay for items and services that might otherwise be paid under Parts A and B. Further, section 202(x)(1)(A) of the Act prohibits the payment of Old-age, Survivors, and Disability Insurance (OASDI) benefits to individuals who meet one of several criteria that relate to being incarcerated.

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Therefore, if an individual turns 65 and qualifies for Medicare but is not yet receiving OASDI benefits because of section 202(x)(1) of the Act, that individual is not automatically enrolled in Medicare Part A. Further, an individual may elect not to enroll in Medicare while incarcerated to avoid having to pay out of pocket premiums only for Medicare to deny payment for services. Moreover, current law does not provide any special enrollment opportunities for formerly incarcerated individuals who miss a Medicare enrollment period while incarcerated. If these individuals do not enroll into Medicare because they are incarcerated, they may go months without health coverage upon their release.

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Section 202(x)(1)(A) lists several conditions of being confined in a jail, prison, other penal institution or correctional facility, or in an institution at public expense for certain reasons specified in the statute, or in a specific status with regard to criminal prosecution. Here, we use the term “incarceration” for brevity.

To address the exceptional conditions that an individual faces upon release from incarceration and to ensure that formerly incarcerated individuals have access to health coverage under Medicare, we proposed. at §§ 406.27(d) and 407.23(d). an SEP for individuals who are released from incarceration on or after January 1, 2023. This SEP would

allow those formerly incarcerated individuals to avoid potential gaps in coverage and late enrollment penalties.

The proposed parameters of this SEP were as follows:

• At §§ 406.27(d)(1) and 407.23(d)(1), we proposed that an individual would be eligible for this SEP if they demonstrate that they are eligible for Medicare and failed to enroll or reenroll in Medicare premium Part A or Part B during another enrollment period in which they were eligible to enroll while they were incarcerated. Further, there must be a record of release either through discharge documents or data available to SSA.

• At §§ 406.27(d)(2) and 407.23(d)(2), we proposed that this SEP would start the day of the individual's release from incarceration and end the last day of the 6th month after the month in which the individual is released from incarceration.

• At new §§ 406.27(d)(3) and 407.23(d)(3), we proposed that entitlement would begin the first day of the month after the month of enrollment, so long as it is after January 1, 2023.

We received the following comments on the SEP for Formerly Incarcerated Individuals:

Comment:

Commenters including advocacy groups, individuals, and State penal institutions provided broad support for this SEP. These commenters indicated that it could help this population as increasing health services and coverage during reentry have been associated with lower rates of recidivism and improved outcomes around employment, housing, and family support. Multiple commenters, while supporting the SEP, recommended that the duration be extended from 6 months as navigating reentry can be timely and daunting for this population, many of whom may have physical or cognitive impairments and/or low literacy and health literacy. Commenters also cited the heightened risk of competing priorities such as economic and housing insecurity during the period following release from incarceration as the need for an increased SEP duration. Most commenters recommended extending the SEP to 12 months, and a commenter recommended that the SEP last for 2 years.

Response:

We appreciate the support for this SEP and understand and agree with the commenters' belief that this population faces many challenges in establishing stable conditions and reintegrating themselves into society. Upon review, and based on the issues raised by the commenters, we are extending the SEP duration to 12 months. We believe encouraging individuals to reestablish healthcare coverage through Medicare is a vital part of successfully re-entering and reintegrating into the community after incarceration and that a 12-month timeframe provides sufficient time for a released individual to have OASDI benefits reinstated. Reinstating OASDI benefits is important, especially to this population, as they can then enroll or reenroll in Medicare and not have to pay out of pocket for Medicare premiums, but rather have their premiums deducted from their Social Security benefits. Not all formerly incarcerated individuals will delay enrollment or reenrollment into Medicare until after they have reinstated their OASDI benefits. However, for those who do, allowing 12 months to enroll or reenroll in Medicare after release from incarceration allows ample time for formerly incarcerated individuals to first have their OASDI benefits reinstated. CMS will conduct education and outreach efforts to inform stakeholders on this SEP and the importance of prioritizing enrollment into Medicare for this population.

Accordingly, we are revising the duration of this SEP at §§ 406.27(d)(2) and 407.23(d)(2) to reflect an SEP that starts the day of release from incarceration and concludes at the end of the 12th subsequent month. For example, if an incarcerated individual was released on January 14, 2023, their SEP would begin on January 14, 2023 and end on January 31, 2024.

Comment:

Multiple comments recommended allowing for pre-release enrollment under this SEP in order to prevent against potential gaps in coverage for this population upon release from incarceration. Commenters calling for pre-release enrollment also cited the need for these individuals to receive assistance from the State or incarcerating entity in their enrollment.

Response:

We appreciate the feedback from commenters and understand the importance, especially for this vulnerable population, to lessen any risk of gaps of coverage. Further, we understand many individuals of this population may have economic factors that prevent them from enrolling in Medicare prior to their OASDI benefits being reinstated, thus requiring them to pay out of pocket for Medicare premiums. With these considerations in mind, we considered different options to best reduce any gaps of coverage that an individual may face upon release from incarceration and that included either revising the duration of the SEP or revising the entitlement start date. We believe this issue can best be addressed by finalizing our proposal with modifications to allow eligible individuals to choose between 2 effective dates of coverage:

• Option 1: Individuals enrolling in this SEP will have a prospective entitlement to begin the first day of the month following the month of enrollment.

• Option 2: Individuals enrolling in this SEP can opt for a retroactive entitlement date so long as their enrollment is on or after January 1, 2023. If the application is filed within the first 6 months of the SEP, the effective date is retroactive to the date of their release from incarceration. If the application is filed in the last 6 months of the SEP, the coverage effective date is retroactive to 6 months after the date of release from incarceration. In addition, beneficiaries who opt for retroactive coverage must pay the premiums for that coverage and we note that installment billing plans are available for beneficiaries who cannot pay the lump sum of retroactive premiums. Beneficiaries would contact their local Social Security field office for help paying any retroactive premium arrearages.

We understand that this population of beneficiaries may face job insecurity and socio-economic barriers while reintegrating into their communities. If an individual opts for retroactive coverage, they would have to pay monthly premiums for those retroactive months of coverage. Some individuals may wish to delay Medicare enrollment until they have had their OASDI benefits reinstated, ensuring they are not paying out of pocket for Medicare premiums. Still others may be willing to pay out of pocket for coverage retroactive to their release date, not to exceed 6 months, and before their OASDI benefits are reinstated. Providing individuals this option allows them the ability to make the healthcare decisions that are best suited to their needs. To implement this change, we are revising the entitlement date of this SEP at §§ 406.27(d)(3) and § 407.23(d)(3) to provide that entitlement begins the first day of the month following the month of enrollment, so long as the date is on or after January 1, 2023 or, as we specify in §§ 416.27(d)(3)(ii) and § 407.23(d)(3)(ii), individuals have the option of choosing an entitlement date retroactive to the first day of the month of their release from incarceration, not to exceed 6 months. Individuals would have to pay premiums for the retroactive period of coverage.

Comment:

Multiple commenters suggested that CMS revise the

description of when someone is “in custody of penal authorities” under § 411.4(b). Commenters identified that the current definition includes a broad range of individuals—including those who are under arrest (pre-conviction), on medical furlough, required to live under home detention, or are on parole, probation, or supervised release. Further, the commenters noted that the regulation at § 411.4 does not absolutely preclude Medicare payment for these individuals; rather, it establishes the presumption that another payer is responsible, and provides that payment may be made for services furnished to individuals or groups of individuals who are in the custody of police or other penal authorities provided that certain conditions are met. However, commenters state the regulation assumes that penal authorities have responsibility to cover, and will cover, medical expenses during all these circumstances, an assumption that is inconsistent with actual coverage by corrections authorities.

Commenters expressed concern that the existing regulation could leave some individuals who are “in custody of penal authorities” as that phrase is used in § 411.4(b) without coverage from both the penal institution and Medicare. Commenters described their understanding that Medicaid coverage is permitted for individuals who are “on parole, probation, or released to the community pending trial; living in a halfway house where individuals can exercise personal freedom; voluntarily living in a public institution; or on home confinement.”

Response:

We thank the commenters for their concerns and suggestions. However, changes to § 411.4, such as to limit who is “in custody” for purposes of the Medicare payment exclusion or to amend the exception that permits Medicare payment under certain conditions, are not within the scope of this rulemaking. Further, we are not addressing here the rules and definitions used in other programs, such as Medicaid or the Marketplace, for individuals who are incarcerated or in custody.

We believe that it is important that the scope of the SEP we proposed and are finalizing is aligned with who § 411.4(b) specifies are individuals in custody of penal authorities for purposes of the Medicare payment exclusion. However, we appreciate the commenters' considerations and will continue to consider the issues they have raised. As finalized in this rule, §§ 406.27(d) and 407.23(d) use the term “in custody of penal authorities” and cite § 411.4(b) for its description of who is in custody of penal authorities to ensure this alignment is clear. As stated in the first paragraph for this section of this final rule, we are using the term “incarcerated” in the preamble to describe the individuals who are in custody of penal authorities as described in § 411.4(b). Further, if CMS amends § 411.4(b) in the future to limit the description of who is in custody of penal authorities for purpose of the Medicare payment exclusion, this SEP will be automatically aligned to that change.

Comment:

Multiple commenters requested that CMS remove the overdue part B premiums (caused by the 90-day grace period) for incarcerated individuals. Currently, Medicare beneficiaries in a direct-bill agreement (for those who do not have Medicare premiums deducted from their OASDI benefits, a direct-bill agreement is an automatic deduction of Medicare premiums from a checking or savings account each month) are given 90 days to repay any past due premiums before their Medicare enrollment is terminated. After 90 days, Part B enrollment is normally terminated for non-payment of premiums (42 CFR 408.8(c)). Commenters noted this 90-day grace period places an unnecessary and unforeseen financial burden on people who are incarcerated but have not paid prior premiums and creates an additional barrier to reenrollment. The commenters explained this is because most enrolled beneficiaries have Medicare premium payments automatically deducted from a monthly SSA benefit. However, when the enrolled beneficiaries become incarcerated, they are switched to direct payment as their SSA benefits are suspended upon incarceration. If the individual later re-enrolls in Part B after release from incarceration, and upon restoring SSA benefits, SSA deducts premium payments owed under the earlier grace period from the first SSA benefit payment. Commenters noted this deduction can cause significant hardship upon reentry.

Response:

We thank commenters for their concerns and suggestions. However, this suggestion is outside the scope of this rulemaking. The Medicare premium grace period is designed to help Medicare beneficiaries who are enrolled in direct pay keep coverage during temporary periods of hardship, or common mishaps that may result in a beneficiary missing a premium payment. Further, incarcerated individuals do have the ability to voluntarily terminate their Medicare coverage upon incarceration to avoid any potential past-due payment issues, which they would do by contacting SSA. Finally, installment billing plans are available through SSA for those who might have trouble repaying back due premiums.

Comment:

A commenter requested that CMS use its discretionary authority to revise previous rules and waive all historic LEPs that were paid in the past or are being paid now by previously incarcerated individuals.

Response:

By referring to “historic LEPs,” we believe the commenter is referring to LEPs that were assessed—and were paid in the past and/or are currently being paid for current Medicare coverage—in connection with coverage periods for individuals who enrolled (or reenrolled) in Part B after ending a period of incarceration before January 1, 2023. This suggestion is outside the scope of this rulemaking, and CMS does not have the authority to unilaterally waive LEPs that were paid in the past or are currently part of an individual's Medicare premium(s) as the LEPs are governed by statute. The Part A LEP is found in the statute at 1818(c)(6) of the Act, and the Part B LEP at 1839(b) of the Act. Section 120(a)(2)(C)(ii) of the CAA modified section 1839(b) of the Act to provide that individuals who enroll during an SEP established under the Secretary's authority under new section 1837(m) of the Act are not subject to the LEP, but it did not provide for a waiver of all historic LEPs for individuals who previously enrolled in Medicare under a condition that now would be considered an exceptional condition or for individuals who may qualify for but do not use an SEP that is established under section 1837(m) of the Act. Therefore, we are unable to waive historic LEPs for individuals who enrolled prior to January 1, 2023, even if that prior enrollment had been under circumstances that will be part of the new SEPs being adopted under section 1837(m) of the Act. Beginning January 1, 2023, an individual who enrolls using one of the SEPs adopted under section 1837(m) of the Act will not be assessed LEPs for the coverage period that begins with that SEP enrollment.

Comment:

Multiple commenters recommended that CMS provide education to individuals who may be eligible for this SEP prior to their release from incarceration. Commenters showed concern over this population navigating the Medicare enrollment process and lacking the community resources that non-incarcerated people may have. Further, commenters noted that it would be unlikely that incarcerated individuals would receive any information through the mail about their

IEP, GEP, or any other helpful Medicare literature, therefore causing Medicare enrollment to be a daunting, unfamiliar process. Commenters also recommended that CMS provide notification of this SEP to eligible individuals to ensure that formerly incarcerated individuals can benefit from this SEP.

Response:

We thank the commenters for their concerns and suggestions. As a part of implementing this final rule, we will be updating CMS publications, websites, and outreach materials. We also intend to work with stakeholders (for example, SHIPs, beneficiary advocacy groups, etc.) to raise awareness and understanding of all of the new SEPs.

We appreciate the support and feedback received from commenters on this SEP. Based on feedback from commenters, we will be finalizing this SEP as proposed with the following modifications:

• We will be extending the SEP duration and revise §§ 406.27(d)(2) and 407.23(d)(2) to reflect that the SEP starts the day of the individual's release from incarceration and ends the last day of the 12th month after the individual is released from incarceration.

• We are revising the text of the regulations at §§ 406.27(d) and 407.23(d) to use the phrase “in custody of penal authorities” as well as citing to § 411.4(b) in order to be clear that the scope of this new SEP is aligned with the scope of § 411.4(b). This change in terminology is intended to eliminate any unintended ambiguity that using different terms in these regulations could produce.

• We are revising the entitlement date of this SEP at §§ 406.27(d)(3) and 407.23(d)(3) to provide that entitlement begins the first day of the month following the month of enrollment. Individuals also have the option of choosing an entitlement date retroactive to the first day of the month of their release from incarceration (not to exceed 6 months).

e. SEP To Coordinate With Termination of Medicaid Coverage

Many beneficiaries are already enrolled in Medicaid when they initially qualify for Medicare at age 65, or if they are under age 65, after receiving 24 months of Social Security Disability Insurance (SSDI). While some of these individuals retain Medicaid coverage after becoming eligible for Medicare, others lose Medicaid benefits and/or eligibility entirely. For example, when an individual enrolled in the adult group under section 1902(a)(10)(A)(i)(VIII) of the Act and 42 CFR 435.119 becomes eligible for Medicare, they become ineligible for the Medicaid adult group per § 435.119(b)(3).

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To date, 39 States have chosen to cover the adult group under § 435.119 (b). The adult group has an income limit of 133 percent of the FPL, but a basic standard deduction of 5 percent of the FPL is applicable as described in section 6012(a)(1) of the Internal Revenue Service Code. (See 42 CFR 434.603(e).

Unless such individuals are eligible for Medicaid on another basis, such as based on receiving supplemental security income (SSI), they will no longer be eligible for Medicaid. Many such individuals qualify for another Medicaid eligibility group, such as a Medicare Savings Program (MSP) group, but others lose Medicaid coverage entirely because they do not qualify for another Medicaid eligibility group.

Low-income Medicare beneficiaries experience poorer health outcomes than their higher-income counterparts.

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Based on program experience and reports from stakeholders, we are aware that some individuals who lose all Medicaid coverage after newly qualifying for Medicare may experience confusion and administrative barriers that undermine a seamless transition from Medicaid to Medicare coverage, risking a period of time without health insurance and a possible LEP for these at-risk individuals.

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For information about the health outcomes of low-income Medicare beneficiaries, see HHS Office of the Assistant Secretary for Planning and Evaluation (2016, December).

Social Risk Factors and Performance Under Medicare's Value-Based Purchasing Programs. https://aspe.hhs.gov/sites/default/files/migrated_legacy_files//171041/ASPESESRTCfull.pdf.

Current Medicaid rules attempt to facilitate beneficiary transitions between Medicaid and other health coverage programs before the beneficiary loses Medicaid coverage. On September 7, 2022, the

Federal Register

included a notice of proposed CMS rulemaking entitled “

Streamlining the Medicaid, Children's Health Insurance Program, and Basic Health Program Application, Eligibility Determination, Enrollment, and Renewal Processes”

that aims to improve continuity of health coverage; however, for purposes of this rulemaking CMS refers only to current regulations. Before terminating or reducing the scope of Medicaid coverage for individuals who become eligible for Medicare, the State Medicaid agency must conduct a redetermination of eligibility, including a determination of whether the individual is eligible for Medicaid on another basis under §§ 435.916(d), 435.916(f)(1) and 435.930(b). The State must continue the same level of Medicaid coverage until the State completes the eligibility redetermination and provides at least 10 days of advance notice and fair hearing rights in accordance with § 435.917 and 42 CFR part 431 subpart E. If, during the redetermination process, an individual is found to no longer be eligible for the eligibility group under which they had been most recently receiving coverage, the State must then: (1) move the individual to a different eligibility group for which the individual is eligible or, (2) in instances in which the individual is not eligible for another Medicaid eligibility group, determine the individual's potential eligibility for other insurance affordability programs, in accordance with § 435.916(f)(2), and terminate the individual's Medicaid coverage.

In the proposed rule (87 FR 25098), we noted that, despite these requirements, there are multiple scenarios that can prevent a seamless transition to Medicare coverage. We explained that States sometimes fail to complete redeterminations timely, sometimes not until months after the individual first qualifies for Medicare.

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When this happens, an individual may retain Medicaid even though the individual no longer technically meets the Medicaid eligibility criteria. State Health Insurance Assistance Programs (SHIPs) and beneficiary advocacy groups have reported that such individuals sometimes miss their IEP because they continue to be covered by Medicaid and assume it is not necessary for them to sign up for potentially duplicative health coverage. Moreover, many States do not cover the Part B premiums for individuals remaining in the adult group pending a redetermination under their buy-in agreement.

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Because individuals in

such States would need to pay the Part B premium themselves, they may decline to sign up for Medicare coverage, which they may struggle to afford.

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Recent HHS Office of Inspector General reports and State audits have cited cases in which States continued to provide coverage for many months after a change impacting eligibility was identified that should have prompted a redetermination. See for example: Louisiana Legislative Auditor. (2018, November 8).

Medicaid Eligibility: Wage Verification Process of the Expansion Population. https://www.lla.la.gov/PublicReports.nsf/1CDD30D9C8286082862583400065E5F6/$FILE/0001ABC3.pdf; Colorado Did Not Correctly Determine Medicaid Eligibility for Some Newly Enrolled Beneficiaries. https://oig.hhs.gov/oas/reports/region7/71604228.pdf;

HHS Office of the Inspector General. (2019b, August).

California Made Medicaid Payments on Behalf of Newly Eligible Beneficiaries Who Did Not Meet Federal and State Requirements. https://oig.hhs.gov/oas/reports/region9/91602023.pdf;

HHS Office of the Inspector General. (2018, February).

New York Did Not Correctly Determine Medicaid Eligibility for Some Non-Newly Eligible Beneficiaries. https://oig.hhs.gov/oas/reports/region2/21601005.pdf;

HHS Office of the Inspector General. (2019, July).

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Under their buy-in agreements with CMS, some States are required to enroll all Medicaid

beneficiaries in Medicare Part B and to pay the premiums on their behalf (known as “Part B buy-in”). If such a State has not completed the eligibility redetermination for an individual enrolled in the adult group before the first month they qualify for Medicare, the State must enroll the individual in Part B buy-in for all months in which the individual is enrolled in the adult group. CMS Manual for the State Payment of Medicare Premiums, chapter 1, section 1.4,

https://www.cms.gov/files/document/chapter-1-program-overview-and-policy.pdf.

See section II.D.3.e. of this proposed rule for a discussion of buy-in coverage groups available for Part B.

During the ongoing Public Health Emergency in response to the Coronavirus Disease 2019 outbreak (COVID-19 PHE), as a condition of receiving the federal medical assistance percentage (FMAP) increase authorized by the Families First Coronavirus Response Act (FFCRA) (Pub. L. 116-127), States claiming the FMAP increase have been required to maintain Medicaid enrollment for nearly all individuals enrolled in Medicaid as of March 18, 2020, through the end of the month in which the COVID-19 PHE ends. This condition, known as the continuous enrollment requirement or continuous enrollment condition, applies to, among others, individuals who qualified for or were enrolled in Medicaid during this time period in the adult group and subsequently became eligible for Medicare.

As discussed in the proposed rule (87 FR 25099), since the start of the COVID-19 PHE, beneficiary advocacy groups and SHIPs have reported to us that a substantial number of beneficiaries who became eligible for Medicare while enrolled in the Medicaid adult group may have interpreted States' notifications that their Medicaid coverage would remain intact throughout the COVID-19 PHE (and the ensuing months of continuous coverage after they qualified for Medicare) to mean they did not need to take any action during the COVID-19 PHE to secure or maintain health coverage, including enrolling in Medicare. Consequently, we anticipated that some beneficiaries who maintained adult group eligibility are likely to have missed their IEPs as a result of confusion based on the COVID-19 PHE. Based on these reports, we indicated concern that when the COVID-19 PHE ends and states resume routine eligibility and enrollment operations for Medicaid, including taking action on pending redeterminations necessitated by changes in beneficiary circumstances, such individuals would end up being terminated from Medicaid and would experience a gap in coverage and lose access to critical health care as a result. Further, we explained that once they do enroll in Medicare, they could incur late enrollment penalties.

As mentioned previously, under an existing requirement under the Medicaid program designed to maximize continuity of coverage for beneficiaries whom States have determined ineligible for Medicaid, States must determine or assess their potential eligibility for other insurance affordability programs, such as the Children's Health Insurance Program (CHIP) and health insurance coverage available on the Marketplace with financial assistance and transfer their accounts to such programs as appropriate under §§ 435.916(f)(2) and 435.1200(e). As discussed in the proposed rule (87 FR 25099), although insurance affordability programs have not been defined to include Medicare, promoting a seamless transition from Medicaid to Medicare coverage is also very important. The ability to enroll in Medicare can be vital in preventing gaps in health coverage, especially if individuals lack access to other health insurance and may be subject to an LEP when they do enroll in Medicare.

To remove barriers that present an exceptional condition that could prevent individuals from transitioning from coverage under the Medicaid program to coverage under the Medicare program, we proposed an SEP at §§ 406.27(e) and 407.23(e) for individuals who lose Medicaid eligibility entirely after the COVID-19 PHE ends or on or after January 1, 2023 (whichever is earlier) and have missed a Medicare enrollment period. We anticipated our proposals would advance health equity by improving low-income individuals' access to continuous, affordable health coverage and use of needed health care consistent with the

Executive Order on Advancing Racial Equity and Support for Underserved Communities Through the Federal Government

and the

Executive Order on Continuing to Strengthen Americans' Access to Affordable, Quality Health Coverage.

We proposed at §§ 406.27(e)(1) and 407.23(e)(1) that to be eligible for this SEP, an individual must demonstrate they are eligible for Medicare and their Medicaid eligibility is terminated on or after January 1, 2023, or is terminated after the last day of the COVID-19 PHE as determined by the Secretary, whichever is earlier. At §§ 406.27(e)(2)(i) and 407.23(e)(2)(i), we proposed that if the termination of Medicaid eligibility occurs after the last day of the COVID-19 PHE and before January 1, 2023, the SEP starts on January 1, 2023 and ends on June 30, 2023. At §§ 406.27(e)(2)(ii) and 407.23(e)(2)(ii), we proposed that if the termination of Medicaid eligibility occurs on or after January 1, 2023, the SEP starts when the beneficiary receives notice of an upcoming termination of Medicaid eligibility and ends 6 months after the termination of eligibility. We anticipated that this extended duration would allow this at-risk population sufficient opportunity to enroll in Medicare.

We also noted that, unlike the other proposed SEPs for exceptional conditions, this SEP could apply to a circumstance that occurs before January 1, 2023 (that is, if the end of the COVID-19 PHE and the individual's Medicaid termination occur before such time). We maintained that such a deviation was warranted in this limited circumstance given the novel COVID-19 outbreak and unprecedented Federal, State, and local efforts to combat it.

We proposed at §§ 406.27(e)(3) and 407.23(e)(3) that entitlement to Part A and Part B, respectively, would begin the first day of the month following the month of enrollment, so long as it is effective after the end of the COVID-19 PHE or January 1, 2023, whichever is earlier. We noted that individuals whose Medicaid eligibility is terminated after the end of the COVD-19 PHE, but before January 1, 2023 (if applicable), have the option of requesting that entitlement begin back to the first of the month following termination of Medicaid eligibility provided the individual pays the monthly premiums for the period of coverage.

Lastly, we proposed at §§ 406.27(e)(4) and 407.23(e)(4) that individuals who otherwise would be eligible for this SEP, but enrolled in Medicare during the COVID-19 PHE prior to January 1, 2023, if applicable, are eligible to have LEPs collected under §§ 406.32(d) or 408.22 reimbursed and ongoing penalties removed. Given the unique nature of this specific SEP, and the fact that we proposed that individuals could be eligible for the SEP if the COVID-19 PHE ends before January 1, 2023, we concluded that it is appropriate and fair that these individuals not be subject to an LEP that would not have been collected had they known about this remedy at the time of enrollment.

We received the following comments, and our responses follow.

Comment:

Several commenters expressed general support for the SEP to Coordinate with Termination of Medicaid Coverage (Medicaid SEP) as

proposed. Some commenters were particularly appreciative of the reimbursement of the LEPs for individuals who would have been eligible for the Medicaid SEP, but already enrolled in Medicare.

Response:

We appreciate the comments in support of our proposal. We anticipate this proposal will help support continuous coverage for individuals as they transition from Medicaid to Medicare coverage after the COVID-19 PHE ends and beyond.

Comment:

A few comments sought to further address potential gaps in coverage during the transition from Medicaid to Medicare coverage. A commenter recommended that we require States to continue Medicaid enrollment until the individual is actually enrolled in Medicare.

Response:

We lack the statutory authority to require that Medicaid enrollment continue for individuals who are ineligible for Medicaid beyond the end of the COVID-19 PHE and until the individual is actually enrolled in Medicare. Beginning the month following the month in which the COVID-19 PHE has ended, individuals who are ineligible for Medicaid may not remain enrolled in Medicaid after the State makes a redetermination that they are ineligible for such coverage.

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Therefore, we are unable to accept the commenter's recommendation.

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The continuous enrollment provision in the FFCRA provides an exception to this rule, but it is limited to the COVID-19 PHE.

However, we share the commenters' concerns about gaps in health coverage as individuals transition from Medicaid to Medicare health coverage. Under the proposal, the effective date of the Medicare enrollment is the month following the month of the SEP enrollment. Therefore, if individuals do not apply for this SEP upon receipt of the Medicaid termination notice, they would likely have a gap in coverage before Medicare coverage starts. Any delay in applying for this SEP after the loss of Medicaid coverage could be particularly harmful for people who may need to seek medical care in the intervening time. As such, to address the commenters' concerns and reduce gaps in coverage for individuals transitioning between Medicaid and Medicare coverage, we are finalizing revisions to § 406.27(e)(3) to add paragraph (iii) and § 407.27(e)(3) to add paragraph (iii) to allow individuals the option to elect retroactive Medicare entitlement back to the date of Medicaid termination but no earlier than January 1, 2023. If an individual selects this option, they must pay the premiums for the retroactive covered time period.

Comment:

A few commenters requested clarification on whether individuals who are only entitled to Part A if they pay a premium (premium Part A) and live in group payer States can use this SEP to enroll in premium Part A for the purposes of enrolling in the Qualified Medicare Beneficiary (QMB) eligibility group.

Response:

Under proposed § 406.27(e), individuals who are entitled to premium Part A, have missed their initial Medicare enrollment, and lose all Medicaid eligibility have access to this SEP. We do not make a distinction between access to this SEP for individuals who live in States that have elected to extend their buy-in agreement to include Medicare Part A (Part A buy-in States) and those that did not (group payer States).

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As such, individuals who are entitled to Part A and live in a group payer State may also use this SEP to enroll in premium Part A under existing SSA processes.

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For more information about the distinction between a Part A buy-in State and group payer State, please refer to section II.D.1. of this final rule.

Comment:

A few commenters expressed concern regarding the type of notice that would be required before an individual is able to use the SEP. The commenters expressed concern that individuals may not receive timely Medicaid termination notices because of recent relocations, homelessness, and/or mail delivery problems. The commenters suggested these problems may be magnified by the end of the COVID-19 PHE. As such, commenters suggested that CMS use actual knowledge of the Medicaid termination as the standard for when the Medicaid SEP time period should start. A commenter requested that CMS and SSA use existing data resources to automatically apply these SEPs for individuals who are able to provide basic documentation with their enrollment materials.

Response:

We share commenters' concerns about timely receipt of a State Medicaid termination notice and reducing barriers to qualifying for this SEP, but we decline to change the notice standard for the SEP to actual notice of termination. We think such a change would be problematic to operationalize because it would be very difficult to verify when any particular individual had actual knowledge of termination of their Medicaid coverage. This modification could also result in delaying the SEP until many months after the individual lost Medicaid coverage, which would undermine the goal of smooth transitions of coverage between the Medicaid and Medicare programs. However, if the individual lacks the original State termination notice, SSA will use alternative processes to verify the loss of Medicaid with the State Medicaid agency (for example, email and telephone contact).

In addition, to prepare for the unwinding of the COVID-19 PHE, we have urged individuals to update their contact information with States at

https://www.medicaid.gov/resources-for-states/coronavirus-disease-2019-covid-19/unwinding-and-returning-regular-operations-after-covid-19/renew-your-medicaid-or-chip-coverage/index.html.

We have also created a list of best practices for State Medicaid agencies as they prepare to unwind the COVID-19 PHE, which includes strategies to collect and verify updated enrollee contact information at

https://www.medicaid.gov/resources-for-states/downloads/state-unwinding-best-practices.pdf.

These principles and practices have been emphasized throughout CMS materials related to unwinding, which can be found at

https://www.medicaid.gov/unwinding.

We encourage the commenters to partner with us to help ensure State Medicaid agencies have updated contact information for beneficiaries.

We appreciate the suggestion to ease processes for beneficiaries but we are unable to automatically apply the Medicaid SEP for individuals who try to enroll in Medicare at the end of the COVID-19 PHE. While some individuals in Medicaid who are eligible for Medicare will lose eligibility for Medicaid upon the end of the COVID-19 PHE, others will not. Some individuals will transition to an MSP eligibility group or another eligibility group that is part of the State's buy-in group. Therefore, we decline to adopt the commenter's recommendation to automatically apply this SEP to eligible individuals at this time, but may consider options to streamline processes in future rulemaking based on program experience.

Comment:

Some commenters stated that our proposal to require Medicaid termination as the trigger for the SEP would complicate processes for individuals who missed their IEP during the PHE but who remain eligible for Medicaid after the PHE ends and redeterminations resume. The commenters stated, for example, that in a State that requires Medicare application as a condition of Medicaid eligibility, individuals who are otherwise eligible for Medicaid but failed to enroll in Medicare timely would only be able to qualify for the

SEP if the State terminates their Medicaid eligibility for failing to enroll in Medicare. However, once the individual enrolls in Medicare using the SEP, they would then need to re-apply for Medicaid to regain Medicaid coverage. The commenters therefore requested that CMS consider allowing individuals who missed their IEP to qualify for the SEP without being terminated from Medicaid.

Response:

We share the commenters' goal of avoiding administrative complications for individuals and States, but we decline to extend this SEP to individuals who missed their IEP but have not had their Medicaid coverage terminated. At the outset, as noted at 87 FR 25100, individuals who continue to qualify for a Medicaid eligibility group that is included in the State buy-in agreement would not need to use this SEP, as the State would already enroll them in Medicare without regard to Medicare enrollment periods and LEPs.

However, individuals who missed their IEP and remain eligible for a Medicaid group that is

not

in the buy-in agreement could not enroll in Medicare outside of enrollment periods using the proposed SEP. While this group could benefit from the commenters' suggestion, we would need to further explore the policy and operational considerations of broadening the eligibility for this SEP (for example, how to effectively identify the specific affected population) and would benefit from additional public input and program experience. Lastly, we note that individuals who are ineligible for this SEP may still qualify for an SEP on a case-by-case basis for other unanticipated situations that involve exceptional conditions that occur on or after January 1, 2023 at new §§ 406.27(f) and 407.27(f).

Finally, we would like to clarify CMS policy on requiring Medicare as a condition of Medicaid eligibility. As described in the buy-in provisions in the proposed rule at 87 FR 25120, States can require Medicaid applicants and beneficiaries to apply for Medicare as a condition of eligibility, only provided that the State pays their Medicare premiums under the State buy-in agreement. If the State does not pay the Medicare premiums for a Medicaid beneficiary under State buy-in and they do not enroll in Medicare, the State cannot terminate the individual for failing to apply for Medicare.

Comment:

Another commenter sought clarification on how the SEP would apply to individuals who failed to timely enroll in Medicare because they remained enrolled in adult group coverage during the PHE and are then enrolled in Medicaid with a spenddown amount after normal operations resume. These individuals have countable income over the eligibility limit for Medicaid and must deduct their incurred medical expenses to reduce their income down to the medically needy income level (“spenddown amount”) in order to be eligible for Medicaid in a given period. The commenter inquired whether individuals with a spenddown amount are eligible for this SEP, particularly if they do not meet their spenddown amount during a given period either because their medical expenses have dipped or they did not submit the necessary paperwork to prove they have met their spenddown amount.

Response:

We acknowledge the difficulties and variability of Medicaid eligibility for individuals who must meet a spenddown to qualify for Medicaid. We clarify that the proposed SEP would not apply to individuals who apply for Medicare when they have already met their spenddown amount because they are still eligible for Medicaid. On the other hand, the SEP would apply to individuals if they fail to meet their spenddown amount in a given period and apply using the SEP while their Medicaid coverage is not in effect. We will welcome feedback on experiences with this SEP among individuals who must meet a spenddown to qualify for Medicaid to inform future rulemaking.

Comment:

A commenter sought clarification on whether certain individuals would qualify for the proposed SEP. In particular, the commenter questioned whether the SEP applies to individuals who missed a Medicare enrollment period before the COVID-19 PHE began. The commenter also inquired whether individuals can qualify for the SEP if they voluntarily withdraw from Medicaid before the end of the COVID-19 PHE. Finally, the commenter requested we explain if States or an individual can request exceptions to the parameters of the proposed SEP.

Response:

We appreciate the commenter's questions. Under §§ 406.27(e)(1)(ii) and 407.27(e)(i)(ii), the SEP is available to individuals who have missed a Medicare enrollment period and whose Medicaid eligibility is terminated on or after January 1, 2023 or is terminated after the last day of the COVID-19 PHE, whichever is earlier. We did not specify when an individual must have missed a Medicare enrollment period. Therefore, in the commenter's first example, an individual who missed a Medicare enrollment period prior to start of the COVID-19 PHE (for example, January 31, 2020) and meets other applicable requirements under §§ 406.27(e) and 407.27(e) would qualify for the SEP.

In response to the commenter's question about voluntary withdrawals, we note at the outset that voluntary terminations from Medicaid are exceedingly rare and, as such, we do not expect the issue the commenter raised to occur with any frequency. Nonetheless, we clarify that this SEP would not apply to individuals who were determined ineligible for Medicaid but kept enrolled due to the continuous coverage enrollment provision in the FFCRA and who voluntarily withdraw from Medicaid before the PHE ended (or individuals who give up Medicaid coverage on or after January 1, 2023). The rationale for this SEP was predicated on ensuring smooth transitions between the Medicaid and Medicare programs, trying to remedy the gaps in coverage that are created through involuntary delayed terminations of Medicaid and the challenges of navigating different States' processes with regard to redeterminations. It is our understanding that individuals who voluntarily terminate their Medicaid coverage would not experience the same gaps in health coverage that individuals facing involuntary terminations experience. Based on program experience, individuals who give up Medicaid coverage tend to have other available sources of health coverage. Additionally, individuals who voluntarily terminate Medicaid coverage do not have the same challenges with States' processes that individuals who are involuntarily terminated from Medicaid experience.

Finally, we did not propose an option for individuals or States to request an exception to the parameters of this proposed SEP. However, as noted previously, individuals who are ineligible for this SEP may still qualify for an SEP on a case-by-case basis for other unanticipated situations that involve exceptional conditions that occur on or after January 1, 2023 at new §§ 406.27(f) and 407.27(f). After considering the comments we received and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing our proposal with a modification to our proposed SEP at §§ 406.27(e) and 407.27(e) to allow retroactive entitlement to the date of termination of Medicaid coverage but no earlier than January 1, 2023.

f. SEP for Other Exceptional Conditions

We also proposed to retain the ability to provide SEPs on a case-by-case basis for other unanticipated situations that involve exceptional conditions and warrant an SEP. This SEP would allow us to grant SEPs on a case-by-case basis for circumstances we do not have enough experience to consider or anticipate that could create a barrier to enrollment. We acknowledge that there is no way to predict the full range of circumstances that would warrant an SEP—they are “exceptional”—so we need this SEP for exceptional conditions to be timely in our response to beneficiaries with unique cases, given the time it takes to establish a more targeted SEP via rulemaking.

The proposed parameters of this SEP were as follows:

• At §§ 406.27(f) and 407.23(f), we proposed to create an SEP that would provide an enrollment opportunity for individuals where conditions beyond their control caused them to miss an enrollment period and prevented them from timely enrolling in premium Part A or Part B or both during the IEP, GEP or other prescribed SEPs.

• At §§ 406.27(f)(1) and 407.23(f)(1), we proposed that such SEPs would be granted on or after January 1, 2023, if the individual demonstrates that conditions outside of their control caused them to miss an enrollment period and the condition was determined exceptional in nature.

• At §§ 406.27(f)(2) and 407.23(f)(2), we proposed that the SEP duration would be determined on a case-by-case basis

• At §§ 406.27(f)(3) and 407.23(f)(3), we proposed that entitlement would begin the first day of the month following the month of enrollment, and only for exceptional conditions that arise on or after January 1, 2023.

We received the following comments on the SEP for Other Exceptional Conditions:

Comment:

Commenters expressed incredible support for the case-by-case SEP, and many commenters included suggestions to establish new, separate SEPs along with those discussed in the proposed regulation. For example, some commenters urged us to expand this SEP to include certain socio-demographic groups. Notably, a few commenters expressed support and suggested a separate SEP for immigrants who have passed the 5-year requirement, but are under the impression that they need to wait until citizenship before they can enroll in Medicare. This misinterpretation inadvertently causes them to miss their IEP. The commenter detailed that the underlying issue is a misunderstanding of eligibility for Medicare for immigrants and a lack of notice, hence the need for a new SEP instead of individual equitable relief.

Similarly, another commenter urged CMS to grant a new SEP, or waive the LEP, to eligible American Indian and Alaska Native individuals if they inadvertently miss their IEP due to the complicated nature of the Indian health care delivery system. They cited that such an opportunity would fall in line with the agency's commitment to improving the health of this population and eliminate barriers to enrollment and coverage.

Response:

We acknowledge and appreciate all comments received. Under §§ 406.20(b)(2)(ii) and §§ 407.10(a)(2)(iii), immigrants over age 65 can qualify for, and enroll in, premium Medicare Part A and Part B after 5 continuous years of legal residency in the United States. Individuals who identify as American Indian and Alaska Native are able to seek and receive care through the Indian Health Service (IHS). Because the IHS works closely, and often in tandem with CMS, Medicare coverage information is readily provided to entitled beneficiaries who interact with the system.

With this understanding, we believe there are avenues through which individuals within these populations can receive adequate and accurate information about Medicare eligibility and enrollment. While we are sensitive to the conditions presented, we do not see a need to revise our regulations or establish a new, separate specific SEP for these groups as it is not clear to CMS that they meet the definition as exceptional conditions and we do not have evidence that the potential exceptional conditions impact a broad enough group of individuals to necessitate the establishment of a specific SEP. An individual who can present documentation to SSA that an exceptional condition that was outside their control prevented that individual from enrolling in Medicare may qualify for the Other Exceptional Conditions SEP on a case-by-case basis. CMS will work with SSA to monitor the use of the Other Exceptional Conditions SEP, and if a particular exceptional condition that impacts a broad number of individuals becomes apparent in that data analysis, we will consider adding additional specific SEPs in the future.

Ultimately, we remain committed to improving education and outreach efforts for these populations to remedy current misunderstandings, bridge knowledge gaps, and eliminate enrollment barriers. We will continue to partner with existing stakeholders to ensure that clear and comprehensive information is provided to beneficiaries so they are able to make an informed coverage choice in a timely manner. We will also continue to evaluate the data collected on the case-by-case exceptional conditions SEP to determine whether any issues arise that warrant the creation of a unique exceptional conditions SEP for these populations.

Comment:

A few commenters mentioned the existing SEP for individuals serving as volunteers outside the U.S. at the time they first become eligible for Medicare who are participating in a program sponsored by a 501(c)(3) covering at least a year, and who demonstrate health insurance coverage while serving in the program. Consequently, they urged CMS to expand the existing SEP for those living abroad who have been covered by private or national insurance, in that country and wish to return to the U.S. and enroll in Medicare.

Response:

We acknowledge and thank the commenters for their input. Under SSA publication No. EN-05-10137,

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for an individual living abroad who may be eligible for Medicare, there are generally no restrictions from collecting Social Security benefits and enrolling in Medicare. This applies regardless of if they return to reside in the United States or not. Additionally, individuals who live abroad are able to still pay their premium, if required, and be enrolled in Medicare Part A or Part B during their IEP. Given that there are not any exceptional conditions that prevent these individuals from enrolling in Medicare, we do not believe that an expansion on the current SEP, or creation of a new, separate SEP is warranted under this circumstance. (We note that Medicare generally does not pay for services that are not furnished within the United States. See 42 CFR 411.9.)

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https://www.ssa.gov/pubs/EN-05-10137.pdf.

Comment:

Another commenter urged CMS to consider establishing an additional SEP for individuals who have relied on coverage from the Veterans Administration (VA). Specifically, they cited that after these individuals missed their IEP for Medicare and realized that the VA coverage no longer meets all of their needs, they want a new opportunity to enroll in Part B.

Response:

Veterans, like all other Medicare beneficiaries, who receive Social Security benefits at the time they reach age 65 receive a notice about

Medicare coverage, regardless of VA coverage. In addition, for those not collecting Social Security benefits at age 65, there are a number of resources available to those receiving VA health benefits that advise them to enroll in Medicare on their own, or if applicable, their spouse's record as described on pages 19 and 90 of the 2022

Medicare and You Handbook

for additional information. The guidance also explains the resulting consequence for not filing, especially in situations where he or she is not eligible for premium-free Part A based on their own work record.

For these reasons, we do not concur with the need for a specific SEP for this population. We will continue to refine awareness and education efforts on eligibility and enrollment for this target population to help to eliminate barriers to timely enrollment.

Comment:

Another commenter suggested that CMS create a permanent, separate SEP for individuals who were given erroneous information by an SSA or other federal employee. They note that, while equitable relief is typically available for such situations, SSA is not required to reply to these requests within a specific timeframe, therefore, causing beneficiaries to wait for months or initiate contact for a reply. The commenter also noted that there is no formal appeal process for a denied request.

Response:

We thank the commenter for this insight, however, the SEP is not intended to replace equitable relief available under section 1837(h) of the Social Security Act and codified at 42 CFR 407.32. There are specific parameters for the exceptional conditions SEP, as outlined in the proposed rule, including that the reason for the SEP must be exceptional in nature, should not create incentive to delay enrollment in Medicare, and is the most appropriate resolution. The equitable relief process offers additional flexibility that goes beyond the parameters of the exceptional conditions SEP. By providing equitable relief, SSA has the ability to offer additional relief to enrollees such as retroactive coverage, waived premiums, or creation of an enrollment opportunity to essentially eliminate the effects of the government error and meet their coverage needs. Although SSA is not required to process equitable relief requests in a specific timeframe, they aim to process these requests within 30 days from the time it is assigned to a technician. Once the case is processed, the technician notifies the enrollee, in writing, to explain the type of relief granted or if the request for relief is denied. This timeline may be altered due to the need for SSA to solicit additional documentation or verify submitted documentation.

Finally, in response to the commenter's concern about the appeals process for equitable relief. We will continue to collaborate closely with SSA to be as transparent as possible with the equitable relief process, and that options to enroll in Medicare remain accessible.

Comment:

A commenter recommended that CMS should consider implementing an SEP for individuals who lose Medicare coverage for failure to pay premiums such that it can only be used twice per beneficiary. They cited that this kind of SEP would avoid the cyclical re-enrollment process for individuals who are unable to pay their premiums.

Response:

As discussed in the proposed rule, the scope of the exceptional conditions SEP is intended to provide a new enrollment opportunity and remove any penalties for late enrollment, not to provide premium relief. CMS does not consider non-payment of premiums for economic reasons as a primary justification for an exceptional condition, therefore, this would not fall under the new SEP umbrella. Non-payment of premiums could qualify though as a secondary outcome of a major event that could qualify as an exceptional condition. Further, when individuals do not enroll in Medicare in a timely manner, it puts them at risk for experiencing gaps in coverage and delays in needed health care treatment. Also, as stated in the proposed rule, if an individual is experiencing financial constraints, there are mechanisms in place (including State buy-in, MSP and premium payment plans) that would more appropriately provide support for affected individuals while ensuring continuity in their health care coverage. For these reasons, we will not be establishing a new, separate SEP for this condition.

Comment:

A commenter recommended that SEPs be established in Medicare Parts C and D to coordinate with the enrollment period and effective date changes in this rule. They added that we also consider creating a new SEP for MA-only plans for those who enroll in Part B (and premium Part A) during the GEP.

Response:

We appreciate the thought supporting this comment. The establishment of new SEPs for Medicare Parts C and D is outside the scope of this rule making.

Comment:

Several commenters applauded our desire to use the information and experience gained from the flexibility of this newly established SEP to inform the creation of future SEPs. In their support, they also suggested that we and, to the extent relevant, the SSA track and report any trends or patterns in the use (and limitations) of these new SEPs.

Response:

We appreciate the support and recommendation. We expect that the flexibility of this SEP will inform any changes that may be desirable in the future. In order to provide for additional flexibility, and reduce confusion, we are revising the duration of the SEP to establish a minimum time period. Specifically, we are revising §§ 406.27(f)(2) and 407.23(f)(2) to state that the SEP duration is determined on a case by case basis, but will be no less than 6 months.

We do plan to track trends and utilize the data from any frequently occurring situations to help guide discussions regarding the creation of new SEPs, which would be subject to further notice and comment rulemaking. In regards to publicly reporting these trends, we will consider in the future whether sharing data is appropriate and feasible given potential beneficiary privacy concerns.

Comment:

A commenter from a health plan supported our proposals, but had some questions with regard to the logistical technicalities. Specifically, they wanted to know how we will designate the SEP reason codes and if they will be released as part of new CY 2023 guidance. Another commenter also questioned if we will be making the determinations around the exceptional conditions and how the process will work overall.

Response:

We thank the commenters for their recommendations to clarify several factors of this new SEP. For Part C/D SEPs, health plans are required to submit reason codes to CMS, however, as the SEPs in this regulation are Medicare Part A/B SEPs, they will be submitted to, and determined by, SSA and SSA will code which SEP is used for enrollment. Health plans would have no role in this determination process. We will continue to work alongside SSA to clarify guidelines regarding the exceptional conditions.

We acknowledge and appreciate all of the feedback and supportive comments we received on the proposed SEP for other exceptional conditions. As discussed above, we will be finalizing this SEP with modifications at §§ 406.27(f)(2) and 407.23(f)(2) to state that the SEP duration is determined on a case-by-case-basis, but will be no less than 6 months.

3. Technical Correction to the Calculation of the Late Enrollment Penalty for Individuals Enrolling on or After January 1, 2023

Currently, section 1839(b) of the Act specifies that the LEP is based on the number of months that have elapsed between the close of the individual's IEP and the close of the enrollment period during which they enroll, plus certain additional months for individuals who reenroll. However, section 120(a)(3) of the CAA amended section 1839(b) of the Act to specify that, for enrollments on or after January 1, 2023, the months that will be taken into account for purposes of determining any LEP include months which elapse between the close of the individual's IEP and the close of the month in which they enroll, plus, for individuals who reenroll, the months that elapse between the date of termination of previous coverage and the close of the month in which the individual enrolls. We expect that these changes will decrease the number of months individuals are subject to the LEP. To implement these changes, we proposed the following changes to our regulations:

• At § 406.33, we proposed to revise paragraph (a) to reflect the requirement that, for individuals enrolling for the first time, the existing Part A LEP calculation requirements continue to apply to enrollments before January 1, 2023.

• At § 406.33, we specified that the months to be counted for calculating the Part A LEP begin with the end of the individual's IEP, and extend through the end of the month in which the individual enrolls.

• At § 406.33(c)(1), we proposed to continue to exclude certain months from the calculation of the LEP, based on the requirements currently in effect under § 406.33(a)(1) through (6).

• At § 406.33(c)(2), we proposed to exclude additional months from the calculation of the LEP for enrollments on or after January 1, 2023.

• At § 408.24, we proposed to revise paragraph (a) to apply the existing Part B LEP calculation months and exceptions to individuals who satisfy the requirements of § 408.24 before January 1, 2023.

• At § 408.24, we proposed to require that for individuals who satisfy the requirements of § 408.24 after January 1, 2023, the months to be counted for calculating the Part B LEP begin with the end of the individual's IEP, and extends through the end of the month in which the individual enrolls.

• At § 408.24(b)(1), we proposed to continue to exclude certain months from the calculation of the LEP, consistent with the requirements currently in effect under § 408.24 (a)(1) through (10).

• At § 408.24(b)(2), we proposed to exclude additional months from the calculation of the LEP for enrollments on or after January 1, 2023.

• At § 406.34, we proposed to revise paragraph (a) to reflect the requirement that, for individuals reenrolling in premium Part A, the existing Part A LEP calculation requirements continue to apply to enrollments before January 1, 2023.

• At 406.34, we proposed to redesignate paragraph (e) as paragraph (f) and add new paragraph (e) to require that the months to be counted for calculating the Part A LEP begin with the end of the individual's IEP and extend through the end of the month in which the individual reenrolls, and we would continue to include the months currently specified in paragraphs (b) and (d) of this section, as applicable, and the months from the end of the first period of entitlement through the end of the month during the GEP in which the individual reenrolled.

• At § 406.34(e)(2), we proposed to exclude the months of non-coverage in accordance with an individual's use of an exceptional condition SEP under § 406.27.

• At § 408.24, we proposed to amend § 408.24, to revise newly redesignated paragraph (c) to apply the existing Part B LEP calculation months and exceptions for reenrollments to individuals who satisfy the requirements of § 408.24 before January 1, 2023.

• At § 408.24(d), we proposed to require that for individuals who satisfy the requirements of § 408.24 after January 1, 2023, the months to be counted for calculating the Part B LEP include the number of months elapsed between the close of the individual's IEP and the close of the month in which he or she first enrolled and the number of months elapsed between the individual's initial period of coverage and the close of the month in which he or she reenrolled (as well as the number of months elapsed between each subsequent period of coverage and the close of the month in which he or she reenrolled).

• At § 408.24(d)(2)(i), we proposed to continue to exclude certain months from the calculation of the LEP, consistent with the requirements currently in effect under § 408.24(a)(1) through (10) and also excluding months before April 1981 during which the individual was precluded from reenrolling by the two-enrollment limitation in effect before that date.

• At § 408.24(d)(2)(ii), we proposed that if an individual uses an exceptional condition SEP under § 407.23 any months of non-coverage would not be counted towards the calculation of the SEP, provided the individual enrolls within the duration of the SEP.

We received a couple of comments related to the proposed technical corrections for the LEP.

Comment:

A few commenters expressed support specifically for the proposed changes to the LEP; however, the majority of that support was expressed in regards to how it related to the SEP proposals. Commenters stated that the proposed changes would ease the financial burden that Medicare premiums with added penalties can present for Medicare beneficiaries. To further reduce financial burdens, a commenter recommended that the LEP should reset once an individual reaches age 65.

Response:

We appreciate the comments and support. We note that under 1837(g)(1) of the Act an individual will have a new IEP for each continuous period of Medicare eligibility as defined by section 1839(d) of the Act and upon attainment of age 65. Therefore, if an individual was subject to an LEP prior to attainment of age 65, the premium amount is reset without the LEP effective with the month of attainment of age 65. In addition, no months prior to age 65 should be counted in the calculation of a premium increase.

Based on analysis of the public comments, we will be finalizing these technical proposals related to LEP as proposed.

B. Proposals for Extended Coverage of Immunosuppressive Drugs for Certain Kidney Transplant Patients (§§ 406.13, 407.1, 407.55, 407.57, 407.59, 407.62, 408.20, and 423.30)

1. History and Definition of Benefit

In 1972, Congress enacted section 299I of the Social Security Amendments of 1972 (Pub. L. 92-603), which amended section 226 of the Act to allow qualified individuals with ESRD

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under the age of 65, to enroll in the federal Medicare health care program, beginning in 1973. These requirements are now codified in section 226A of the Act and implemented in our regulations at 42 CFR 406.13. As mentioned earlier, section 226A(a) of the Act provides that

certain individuals who are medically determined to have ESRD and apply for Medicare coverage are entitled to benefits under Medicare Part A and eligible to enroll in Part B. However, section 226A(b)(2) of the Act currently requires that an individual's entitlement under Part A and eligibility under Part B based on ESRD status ends with the 36th month after the month in which the individual receives a kidney transplant.

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Under 42 CFR 406.13(b), ESRD means that stage of kidney impairment that appears irreversible and permanent and requires a regular course of dialysis or kidney transplantation to maintain life.

The termination of Medicare entitlement has led to some beneficiaries losing coverage of immunosuppressive drugs that transplant patients would still need. Per the 2018 US Renal Data System (USRDS) Annual Report, 32 percent of kidney transplant recipients ages 45-64 years old have no known or other creditable prescription drug coverage.

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Section 402(a) of the CAA established an exception that permits certain beneficiaries who were kidney transplant patients to receive a limited Part B benefit effective January 1, 2023—covering only those immunosuppressive drugs described in section 1861(s)(2)(J) of the Act. Section 402(a) of the CAA also added section 1836(b) of the Act to support limited eligibility under Part B for beneficiaries whose entitlement to insurance benefits under Part A ends by reason of section 226A(b)(2). These individuals are eligible to enroll (or to be deemed enrolled) for the new Part B immunosuppressive drug benefit (herein referred to as the Part B-ID benefit).

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United States Renal Data System:

2018 USRDS Annual Data Report: Epidemiology of Kidney Disease in the United States,

Bethesda, MD, National Institutes of Health, National Institute of Diabetes and Digestive and Kidney Diseases, 2018, from

https://cjasn.asnjournals.org/content/14/3/327.

Not all Medicare kidney transplant patients who lose entitlement to Part A coverage based on section 226A(b)(2), however, are eligible to enroll in the new Part B-ID benefit. The CAA provided that certain individuals are not eligible to enroll in the new program. In general, if the individuals are enrolled in certain specific forms of health insurance or other programs that cover immunosuppressive drugs, the individuals would not be eligible to enroll in the Part B-ID benefit. We discuss the excepted individuals and the specific forms of insurance and programs in greater detail in section II.B.2.b. of this final rule entitled “Determination of Eligibility” and in this final rule at § 407.55(b). Individuals who are seeking entitlement under the new Part B-ID benefit would also need to meet additional statutory criteria, as discussed in section II.B.2.b. of this final rule, and in this final rule at § 407.57.

Individuals enrolled in the new Part B-ID benefit would not receive Medicare coverage for any other items or services, other than coverage of immunosuppressive drugs. Section 402 of the CAA made conforming amendments to sections 1836, 1837, 1838, 1839, 1844, 1860D-1, 1902, and 1905 of the Act. We proposed to revise §§ 407.1, 408.20, 410.30, 423.30 and establish a new subpart D (§§ 407.55 through 407.62) in 42 CFR part 407, entitled

Part B Immunosuppressive Drug Benefit

to implement the new Part B-ID benefit. (We note that in discussing these changes in the proposed rule at 87 FR 25102 we erroneously referred to § 407.65 instead of § 407.62 and are now correcting that error.)

Specifically, we proposed the following:

• At § 407.1(a)(6) we proposed that, sections 1836(b) and 1837(n) of the Act will provide for coverage of immunosuppressive drugs as described in section 1861(s)(2)(J) of the Act under Part B beginning on or after January 1, 2023.

• At § 407.1(b) we proposed to retain the language that states that part 407 sets forth the eligibility, enrollment, and entitlement requirements and procedures for supplementary medical insurance at § 407.1(b)(1), including the reference to the rules governing premiums in part 408 of this chapter.

• At § 407.1(b)(2), we proposed to add language stating that this part also sets forth the eligibility, enrollment, and entitlement requirements and procedures for the immunosuppressive drug benefit provided for under sections 1836(b) and 1837(n) of the Act, including the short title for the Part B-immunosuppressive drug benefit (Part B-ID benefit).

We received comments from patient advocates, associations, States, health plans, and individuals offering broad support on our proposal to extend coverage of immunosuppressive drugs under Medicare Part B for eligible individuals whose benefits under Medicare based on ESRD would otherwise end the 36th month after the month an individual receives a kidney transplant. The comments on those proposals and our responses follow.

Comment:

Many commenters expressed that this benefit was long-awaited and overdue, and they pointed out that the extended coverage of these drugs would help to prevent organ rejection in the post-transplant patient, and thus, will save lives and conserve Medicare resources. Other commenters stated that extending coverage of immunosuppressive drugs is clinically and economically advantageous given the evidence of significant improvement in quality of life, health outcomes, and cost savings on dialysis and hospitalization after a kidney transplant. A commenter pointed out that their State currently covers similar groups with State-only funds, but supports the creation of the Part B-ID benefit under Medicare. The commenter stated that this limited expansion of Medicare Part B is very worthwhile, and even though it is quite limited in scope, it has the potential to be lifesaving for ESRD patients.

Response:

We appreciate the overwhelming support for our proposal and thank the commenters for their feedback. We agree with commenters that these changes are advantageous and will have a positive impact on this population.

Several commenters supported, but had concerns or requested clarifications about, the Part B-ID benefit, particularly about the scope of the Part B-ID benefit. Those comments and our responses are as follows.

Comment:

A commenter stated that Congress adopted a narrowly crafted provision that will leave some patients still facing high, and possibly prohibitive, out-of-pocket costs, including co-insurance costs, as well as physician and lab services, since the patient is not allowed to have other insurance. Another commenter noted that, due to a potential lack of insurance coverage 36 months post-transplant, some patients have chosen not to seek a transplant due to the cost concerns after Medicare eligibility expires. The commenter stated that while the new benefit does not entirely address cost considerations that can inhibit transplant, it is important that transplant professionals are fully trained about the new benefit and that it is factored into assessments of patients' potential stewardship of a transplanted organ. A commenter suggested that this patient population would benefit from continuing to receive coverage for physical therapy under Medicare, as side effects from immunosuppressive drugs could have untoward effects on health, including weight gain, that could result in limitation of movement.

Response:

We thank the commenters for their feedback. Section 402(a) of the CAA ensures that individuals without certain other types of coverage whose benefits under Medicare based on ESRD would otherwise end with the 36th month after the month in which the individual received a kidney transplant,

can maintain coverage for their immunosuppressive drugs essential to prevent rejection of their transplanted kidney. The benefit parameters of the statute are specific, and they do not allow coverage of other items and services. We refer the reader to section II.B.5 of this final rule for further information on education and outreach efforts for the implementation of the Part B-ID benefit.

We received numerous comments requesting clarification on, and recommendations for, coverage of various dosage forms of these drugs and other ancillary items that may be used in the post-transplant clinical setting. Those comments and our responses follow.

Comment:

Several commenters questioned if the new benefit included coverage for compounded formulations of immunosuppressants (for example, a liquid formulation of an immunosuppressive medication not commercially available from the manufacturer that is prepared by a pharmacist), and a couple of commenters added that these formulations were frequently used in the treatment of pediatric kidney patients. Some commenters suggested that CMS consider coverage for mineral or electrolyte supplements, like magnesium, phosphorus, and bicarbonate related to post-transplant care that are particularly necessary in the care of pediatric patients. A commenter stated that transplant physicians must have uninterrupted access to all brand name drugs when he or she deems it necessary for a particular patient. A commenter questioned if drugs that are not categorized as immunosuppressive drugs, per se, such as anti-hypertensives, or drugs used for a patient's co-morbid conditions would be covered. A couple commenters inquired about the coverage of intramuscular (IM) and intravenous (IV) formulations, and asked if an administration fee is included in the Part B-ID benefit. A commenter stated that oral immunosuppressive drugs are clinically appropriate for the great majority of transplant recipients, but excluding coverage of the administration costs for those recipients who do require IV or IM drugs has the potential to impact access to an effective immunosuppressive drug regimen for patients who have no clinically appropriate alternative.

Response:

Payment may be made for prescription drugs used in immunosuppressive therapy as described in federal regulations at 42 CFR 410.30(a). Further, § 410.30(c) states that drugs are covered under this provision irrespective of whether they can be self-administered. The lists of formulations in the proposed rule were examples only. Other types of formulations of immunosuppressive drugs defined in section 1861(s)(2)(J) of the Act as described above in the Summary section, including those that are not self-administered, would be covered and paid under this benefit. As set forth at 42 CFR 410.30(a) and described in § 50.5.1, Chapter 15 of the

Medicare Benefit Policy Manual,

covered drugs include those immunosuppressive drugs that have been specifically labeled as such and approved for marketing by the FDA. Drugs with indications for other conditions not described in 42 CFR 410.30(a), such as mineral deficiencies or hypertension, would not be covered under the Part B-ID benefit. CMS does not maintain a list of drugs covered under this benefit; rather, the Medicare Administrative Contractors (MACs) are expected to maintain, a list of these drugs as set out in § 80.3, Chapter 17 of the

Medicare Claims Processing Manual.

The MACs are expected to keep informed of U.S. Food and Drug Administration (FDA) additions to the list of the immunosuppressive drugs and update guidance as applicable. For inquiries regarding specific drugs with regards to coverage under section 1861(s)(2)(J) of the Act, individuals may contact the DME MAC that processes the claim.

With regard to compounded formulations of immunosuppressants, such drugs are not approved for marketing by the FDA

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and, therefore, are not covered under the Part B-ID benefit. With regard to the commenters' question if a fee is included for the administration of IM and IV formulations under the Part B-ID benefit, as we stated above, section 402(a) of the CAA provides that the benefits are solely for purposes of coverage of immunosuppressant drugs described in section 1861(s)(2)(J). We do not have flexibility to include payment for the administration of the product based on the statutory language of this benefit, as it only includes the actual drug products.

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https://www.fda.gov/drugs/human-drug-compounding/compounding-and-fda-questions-and-answers

.

Comment:

A couple commenters expressed concern about whether a beneficiary would have uninterrupted access to these drugs in the case of a beneficiary having issues arise at the pharmacy counter. A commenter stated that the reimbursement system must be fully in place by the January 1, 2023 effective date, otherwise, patients will be presented a bill or denied their prescription altogether. The commenter also expressed concerns in the case where a pharmacy cannot verify an individual patient's eligibility for the new benefit. A commenter questioned how the beneficiary will be assured uninterrupted access to their drugs in the case of data errors at the pharmacy counter. A commenter urged CMS to make guidance and any related resources available to stakeholders including plans, providers, and beneficiary advocates as soon as possible given the January 1, 2023 effective date for key provisions in the rule. The commenter stated that technical guidance is needed to understand if and how entitlement for the Part B-ID benefit would be reflected in the Medicare Advantage Prescription Drug (MARx) system, and also requested that technical assistance be provided on the transaction reply codes that will be used in the MARx system. A commenter urged CMS to consider having a dedicated pharmacy hotline during the first few months so that questions and concerns by pharmacists can be resolved in real time. Commenters requested that CMS take steps to ensure that there is a safety net, and they recommended that CMS put in place a system that ensures access to medications while back-end determinations of payment responsibility are sorted out.

Response:

We thank the commenters for their feedback and concern. In anticipation of the January 1, 2023 effective date for the Part B-ID benefit, Medicare payment systems, including the Common Working File (CWF), ViPS Medicare System (VMS), the Multi-Carrier System (MCS), and the Federal Intermediary Standard System (FISS) are being modified to properly process claims submitted for immunosuppressive drugs under the Part B-ID benefit. Other entities that will assist with claims processing, including the Medicare Part A and Part B MACs and the Durable Medical Equipment MACs, have also been engaged in the implementation efforts. Additionally, modifications are being made to ensure that eligible beneficiaries are accurately recognized within these systems. All operational and systems changes are slated to be completed prior to the January 1, 2023 effective date. Therefore, we expect beneficiaries' access will be uninterrupted as we implement this new benefit.

With respect to the public comment related to the MARx system, that system is used for beneficiary eligibility and

enrollment for Medicare Part C and Part D plans, and cannot be used by pharmacy providers to verify eligibility for the Part B-ID benefit. We do not expect that there will be a dedicated pharmacy hotline specific to the Part B-ID benefit; however, Medicare providers, including pharmacists and suppliers, can check patient eligibility, (as well as billing and other pertinent information) by either utilizing their MAC online provider portal or Interactive Voice Response (IVR) system, the Health Insurance Portability and Accountability Act Eligibility Transaction System (HETS), or their billing agencies, clearinghouses, or software vendors. For further information, please see the Medicare Learning Network instructions here:

https://www.cms.gov/files/document/checking-medicare-eligibility.pdf.

If a beneficiary has an issue at the pharmacy counter they may call 1-800-MEDICARE, and the 1-800-MEDICARE Call Center will troubleshoot as they currently do with existing provider access concerns. If the issue cannot be resolved, it will be escalated to the CMS Offices of Hearings and Inquiries via the current Ombudsman escalation process.

We note that individuals who enroll in the Part B-ID benefit will be provided with a new Medicare card that will include the specific language that describes the benefit. These beneficiaries will also receive a notice with that card which provides information on the benefit, including use of their prior and current Medicare cards, and contact information for further questions or concerns. We plan to educate pharmacies and other health care providers later this year on changes related to the Part B-ID benefit patient eligibility transaction that will reflect immunosuppressive drug coverage, including the eligibility inquiry transaction reply. Pharmacies should contact their MAC for claims processing technical assistance as they currently do for other claims processing issues. Further information on education and outreach to inform beneficiaries and stakeholders about the Part B-ID benefit is discussed in section II.B.5 of this final rule.

Medicare regulations do not require a pharmacist to provide minimal amounts of immunosuppressive therapy if the beneficiary's coverage cannot be verified; this would be up to the established process at the individual pharmacy.

Comment:

A commenter stated that the proposed rule referred to “successful” kidney transplantation. The commenter recommended striking the term “successful” and simply stating that the new Part B-ID benefit is extended to kidney transplant recipients.

Response:

We thank the commenter for their feedback and have removed successful from the description used in this final rule as official eligibility criteria. The term “successful” in the preamble of the proposed rule was used, generally, to describe a person whose Medicare Part A enrollment terminated 36-months after transplant and whose transplanted kidney functions to the point where the individual does not need a regular course of dialysis to sustain life. If the person's transplant was not successful, the patient would likely require a regular course of dialysis to sustain life, and eligibility for Medicare coverage under Part A and Part B based on ESRD would continue.

2. Part B-ID Benefit Eligibility, Enrollment, Entitlement, and Termination

a. Eligibility for the Part B-ID Benefit

Section 402(a)(2) of the CAA adds section 1836(b) of the Act, which establishes specific eligibility criteria for the Part B-ID benefit. Subject to exceptions, new section 1836(b)(1) of the Act provides that individuals whose entitlement to insurance benefits under Part A ends (whether before, on, or after January 1, 2023) by reason of section 226A(b)(2), and who meet certain additional requirements, would be eligible to enroll (or to be deemed enrolled) in Part B solely for purposes of coverage of immunosuppressive drugs in accordance with section 1837(n) of the Act. The principal limitations on eligibility for the Part B-ID benefit are set out in new section 1836(b)(2) of the Act. Under section 1836(b)(2)(A) of the Act, individuals enrolled in certain other types of health coverage would not be eligible for the Part B-ID benefit.

b. Determination of Eligibility

Section 1836(b)(2)(B)(i) of the Act requires the Secretary, in coordination with the Commissioner of Social Security (Commissioner), to establish a process for determining whether an individual who is to be enrolled, or deemed to be enrolled, in the Part B-ID benefit meets the requirements for such enrollment, including the requirement that the individual not be enrolled in other health coverage that would make them ineligible for the Part B-ID benefit under 1836(b)(2)(A) of the Act.

In order for an individual to be enrolled in the Part B-ID benefit, section 1836(b)(2)(B)(ii)(I) of the Act requires that an individual provide to the Commissioner an attestation that they are not enrolled and do not expect to enroll in the excepted coverage, as described in section II.B.2.a. of this final rule (“Eligibility for the Part B-ID Benefit”), that would make the individual ineligible for the Part B-ID benefit under section 1836(b)(2)(A) of the Act. Section 1836(b)(2)(B)(ii)(II) of the Act requires that the individual notify SSA within 60 days of enrollment in such excepted coverage. Based on these requirements, we proposed at § 407.59(a) and (b), that all prospective enrollees in the Part B-ID benefit must provide to the Commissioner, in either a verbal attestation or signed paper form, an attestation that the individual is not enrolled and does not expect to enroll in other health coverage that would make the individual ineligible for the Part B-ID benefit, and that the individual agrees to notify the Commissioner within 60 days of enrollment in such other coverage as described in § 407.55(b).

We proposed that beneficiaries will be able to primarily use a verbal (telephonic) attestation as part of enrolling in the Part B-ID benefit. Generally, for the verbal attestation, an individual would contact SSA, and an SSA representative, using a standard script, will convey the requirements to the individual that are in the CMS-10798

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attestation form, described in § 407.59 of this final rule. The individual will then attest that the individual does not have coverage under any of the specified health programs or insurance. The individual will also affirm that the statement provided was true and correct and that the individual acknowledged that there may be criminal penalties for making a false statement for purposes of obtaining these Medicare benefits. After the individual provides the oral attestation, the SSA representative will document the content of the call, and the document will be retained as required under SSA processes. We also proposed that individuals would be permitted to provide the attestation in writing with a pen-and-ink signature, if they choose to do so. Under our proposal, individuals could download a PDF-fillable version of an attestation form from SSA or CMS websites to print, sign, and mail to SSA, or to call SSA to request the form in hard copy.

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Medicare.gov/forms-help-other-resources/medicare-forms.

As mentioned previously, we proposed to establish the eligibility criteria for the Part B-ID benefit in new § 407.55, entitled “Eligibility to enroll.” Specifically, in § 407.55(a), we proposed

that an individual would be eligible to enroll in, be deemed enrolled, or re-enroll in the Part B-ID benefit if their Part A entitlement ends at the end of the 36th month after the month in which the individual received a kidney transplant, as set out under revised § 406.13(f)(2), and discussed in section II.B.5 of this final rule.

The types of coverage that would make an individual ineligible for the Part B-ID benefit are specified in section 1836(b)(2)(A)(i) through (v) of the Act. Specifically, the Act requires that individuals shall not be eligible for enrollment in the Part B-ID benefit during any period the individual is:

• Enrolled in a group health plan or group or individual health insurance coverage, as such terms are defined in section 2791 of the Public Health Service Act;

• Enrolled for coverage under the TRICARE for Life program under section 1086(d) of title 10, United States Code;

• Enrolled under a State plan (or waiver of such plan) under title XIX of the Act and is eligible to receive benefits for immunosuppressive drugs described in section 1836(b) of the Act under such plan (or such waiver);

• Enrolled under a State child health plan (or waiver of such plan) under title XXI of the Act and is eligible to receive benefits for such drugs under such plan (or such waiver); or

• Enrolled in the patient enrollment system of the Department of Veterans Affairs established and operated under section 1705 of title 38, United States Code and is either of the following:

++ Is not required to enroll under section 1705 of such title to receive immunosuppressive drugs described in section 1836(b) of the Act; or

++ Is otherwise eligible under a provision of title 38 of the United States Code (other than section 1710), to receive immunosuppressive drugs described in section 1836(b) of the Act.

We proposed regulation text at § 407.55(b) that would mirror those requirements, as set out in sections 1836(b)(2)(A)(i) through (v) of the Act. Section 1836(b)(2) of the Act contains specific exceptions that prevent individuals from enrolling in the Part B-ID benefit. For some of those provisions, section 402 of the CAA includes an additional limitation that the coverage must include coverage of immunosuppressive drugs. For other coverage, the statute does not include this limitation. When specific restrictions are included in one section of a statute but not in another, we presume that the language of the statute is intentional and deliberate with respect to adding the limitations. This is sometimes called the negative implication canon or

expessio unius est exclusion alterius.

c. Enrollment in the Part B-ID Benefit

Section 1837(n)(1) of the Act states that any individual who is eligible for coverage of immunosuppressive drugs under section 1836(b) of the Act, that is, whose entitlement for hospital insurance benefits under part A ends by reason of section 226A(b)(2) may enroll or be deemed to have enrolled in the Part B-ID benefit as established in regulations and during an enrollment period described in statute. We proposed in § 407.57(d) that, to enroll in the Part B-ID benefit, an individual must submit the required attestation as described in § 407.59. We also proposed in § 407.55(c) that, if SSA denies an individual's enrollment in the Part B-ID benefit, the individual will be afforded an initial determination entitlement appeal as described in § 405.904(a)(1). This will ensure that the beneficiary's statutory and due process rights will be adequately protected.

We proposed to establish the provisions relating to enrollment and the entitlement to the Part B-ID benefit in new § 407.57, titled “Part B-ID benefit enrollment.” Specifically, we proposed at § 407.57(a) that an individual whose Part A entitlement ends at the end of the 36th month after the month in which the individual received a kidney transplant, on or after January 1, 2023, is deemed to have enrolled into the Part B-ID benefit effective the first day of the month in which the individual first satisfies the eligibility requirements proposed at § 407.55, and provides the attestation required in proposed § 407.59, prior to the termination of their Part A benefits.

In accordance with new subsections 1837(n)(2) and (3) of the Act, certain individuals have an ongoing opportunity to enroll in the Part B-ID benefit regardless of whether their entitlement under Part A ended before or after January 1, 2023. Therefore, we proposed at § 407.57(b) that an individual whose Part A entitlement ends in accordance with revised § 406.13(f)(2) (as discussed in section II.B.5. of this final rule), and who meets the Part B-ID benefit eligibility requirements at § 407.55 and provides the attestation required in § 407.59, may enroll in the Part B-ID benefit as follows:

• An individual whose entitlement ended prior to January 1, 2023 may enroll in the Part B-ID benefit beginning on October 1, 2022 or later.

• An individual whose entitlement ends on or after January 1, 2023 can enroll at any time after such entitlement ends.

We further proposed at § 407.57(c) that an individual who had previously enrolled in the Part B-ID benefit but whose participation in the benefit was terminated may re-enroll in the Part B-ID benefit at any time if they meet the eligibility requirements at § 407.55 and provides the attestation required in § 407.59. There are no late enrollment penalties assessed, regardless of when an individual enro

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