Part C—Medicare+Choice Program
Editorial Notes
Prior Provisions
A prior part C of this subchapter, consisting of section 1395x et seq., was redesignated part E of this subchapter.
Statutory Notes and Related Subsidiaries
Change of Name
References to Medicare+Choice deemed to refer to Medicare Advantage or MA, subject to an appropriate transition provided by the Secretary of Health and Human Services in the use of those terms, see section 201 of
§1395w–21. Eligibility, election, and enrollment
(a) Choice of medicare benefits through Medicare+Choice plans
(1) In general
Subject to the provisions of this section, each Medicare+Choice eligible individual (as defined in paragraph (3)) is entitled to elect to receive benefits (other than qualified prescription drug benefits) under this subchapter—
(A) through the original medicare fee-for-service program under parts A and B, or
(B) through enrollment in a Medicare+Choice plan under this part,
and may elect qualified prescription drug coverage in accordance with
(2) Types of Medicare+Choice plans that may be available
A Medicare+Choice plan may be any of the following types of plans of health insurance:
(A) Coordinated care plans (including regional plans)
(i) In general
Coordinated care plans which provide health care services, including but not limited to health maintenance organization plans (with or without point of service options), plans offered by provider-sponsored organizations (as defined in
(ii) Specialized MA plans for special needs individuals
Specialized MA plans for special needs individuals (as defined in
(B) Combination of MSA plan and contributions to Medicare+Choice MSA
An MSA plan, as defined in
(C) Private fee-for-service plans
A Medicare+Choice private fee-for-service plan, as defined in
(3) Medicare+Choice eligible individual
In this subchapter, the term "Medicare+Choice eligible individual" means an individual who is entitled to benefits under part A and enrolled under part B.
(b) Special rules
(1) Residence requirement
(A) In general
Except as the Secretary may otherwise provide and except as provided in subparagraph (C), an individual is eligible to elect a Medicare+Choice plan offered by a Medicare+Choice organization only if the plan serves the geographic area in which the individual resides.
(B) Continuation of enrollment permitted
Pursuant to rules specified by the Secretary, the Secretary shall provide that an MA local plan may offer to all individuals residing in a geographic area the option to continue enrollment in the plan, notwithstanding that the individual no longer resides in the service area of the plan, so long as the plan provides that individuals exercising this option have, as part of the benefits under the original medicare fee-for-service program option, reasonable access within that geographic area to the full range of basic benefits, subject to reasonable cost sharing liability in obtaining such benefits.
(C) Continuation of enrollment permitted where service changed
Notwithstanding subparagraph (A) and in addition to subparagraph (B), if a Medicare+Choice organization eliminates from its service area a Medicare+Choice payment area that was previously within its service area, the organization may elect to offer individuals residing in all or portions of the affected area who would otherwise be ineligible to continue enrollment the option to continue enrollment in an MA local plan it offers so long as—
(i) the enrollee agrees to receive the full range of basic benefits (excluding emergency and urgently needed care) exclusively at facilities designated by the organization within the plan service area; and
(ii) there is no other Medicare+Choice plan offered in the area in which the enrollee resides at the time of the organization's election.
(2) Special rule for certain individuals covered under FEHBP or eligible for veterans or military health benefits
(A) FEHBP
An individual who is enrolled in a health benefit plan under
(B) VA and DOD
The Secretary may apply rules similar to the rules described in subparagraph (A) in the case of individuals who are eligible for health care benefits under
(3) Limitation on eligibility of qualified medicare beneficiaries and other medicaid beneficiaries to enroll in an MSA plan
An individual who is a qualified medicare beneficiary (as defined in
(4) Coverage under MSA plans
(A) In general
Under rules established by the Secretary, an individual is not eligible to enroll (or continue enrollment) in an MSA plan for a year unless the individual provides assurances satisfactory to the Secretary that the individual will reside in the United States for at least 183 days during the year.
(B) Evaluation
The Secretary shall regularly evaluate the impact of permitting enrollment in MSA plans under this part on selection (including adverse selection), use of preventive care, access to care, and the financial status of the Trust Funds under this subchapter.
(C) Reports
The Secretary shall submit to Congress periodic reports on the numbers of individuals enrolled in such plans and on the evaluation being conducted under subparagraph (B).
(c) Process for exercising choice
(1) In general
The Secretary shall establish a process through which elections described in subsection (a) are made and changed, including the form and manner in which such elections are made and changed. Subject to paragraph (4), such elections shall be made or changed only during coverage election periods specified under subsection (e) and shall become effective as provided in subsection (f).
(2) Coordination through Medicare+Choice organizations
(A) Enrollment
Such process shall permit an individual who wishes to elect a Medicare+Choice plan offered by a Medicare+Choice organization to make such election through the filing of an appropriate election form with the organization.
(B) Disenrollment
Such process shall permit an individual, who has elected a Medicare+Choice plan offered by a Medicare+Choice organization and who wishes to terminate such election, to terminate such election through the filing of an appropriate election form with the organization.
(3) Default
(A) Initial election
(i) In general
Subject to clause (ii), an individual who fails to make an election during an initial election period under subsection (e)(1) is deemed to have chosen the original medicare fee-for-service program option.
(ii) Seamless continuation of coverage
The Secretary may establish procedures under which an individual who is enrolled in a health plan (other than Medicare+Choice plan) offered by a Medicare+Choice organization at the time of the initial election period and who fails to elect to receive coverage other than through the organization is deemed to have elected the Medicare+Choice plan offered by the organization (or, if the organization offers more than one such plan, such plan or plans as the Secretary identifies under such procedures).
(B) Continuing periods
An individual who has made (or is deemed to have made) an election under this section is considered to have continued to make such election until such time as—
(i) the individual changes the election under this section, or
(ii) the Medicare+Choice plan with respect to which such election is in effect is discontinued or, subject to subsection (b)(1)(B), no longer serves the area in which the individual resides.
(4) Deemed enrollment relating to converted reasonable cost reimbursement contracts
(A) In general
On the first day of the annual, coordinated election period under subsection (e)(3) for plan years beginning on or after January 1, 2017, an MA eligible individual described in clause (i) or (ii) of subparagraph (B) is deemed, unless the individual elects otherwise, to have elected to receive benefits under this subchapter through an applicable MA plan (and shall be enrolled in such plan) beginning with such plan year, if—
(i) the individual is enrolled in a reasonable cost reimbursement contract under
(ii) such reasonable cost reimbursement contract was extended or renewed for the last reasonable cost reimbursement contract year of the contract (as described in subclause (I) of
(iii) the eligible organization that is offering such reasonable cost reimbursement contract provided the notice described in subclause (III) of such section that the contract was to be converted;
(iv) the applicable MA plan—
(I) is the plan that was converted from the reasonable cost reimbursement contract described in clause (iii);
(II) is offered by the same entity (or an organization affiliated with such entity that has a common ownership interest of control) that entered into such contract; and
(III) is offered in the service area where the individual resides;
(v) in the case of reasonable cost reimbursement contracts that provide coverage under parts A and B (and, to the extent the Secretary determines it to be feasible, contracts that provide only part B coverage), the difference between the estimated individual costs (as determined applicable by the Secretary) for the applicable MA plan and such costs for the predecessor cost plan does not exceed a threshold established by the Secretary; and
(vi) the applicable MA plan—
(I) provides coverage for enrollees transitioning from the converted reasonable cost reimbursement contract to such plan to maintain current providers of services and suppliers and course of treatment at the time of enrollment for a period of at least 90 days after enrollment; and
(II) during such period, pays such providers of services and suppliers for items and services furnished to the enrollee an amount that is not less than the amount of payment applicable for such items and services under the original Medicare fee-for-service program under parts A and B.
(B) MA eligible individuals described
(i) Without prescription drug coverage
An MA eligible individual described in this clause, with respect to a plan year, is an MA eligible individual who is enrolled in a reasonable cost reimbursement contract under
(ii) With prescription drug coverage
An MA eligible individual described in this clause, with respect to a plan year, is an MA eligible individual who is enrolled in a reasonable cost reimbursement contract under
(I) through such contract; or
(II) through a prescription drug plan, if the sponsor of such plan is the same entity (or an organization affiliated with such entity) that entered into such contract.
(C) Applicable MA plan defined
In this paragraph, the term "applicable MA plan" means, in the case of an individual described in—
(i) subparagraph (B)(i), an MA plan that is not an MA–PD plan; and
(ii) subparagraph (B)(ii), an MA–PD plan.
(D) Identification and notification of deemed individuals
Not later than 45 days before the first day of the annual, coordinated election period under subsection (e)(3) for plan years beginning on or after January 1, 2017, the Secretary shall identify and notify the individuals who will be subject to deemed elections under subparagraph (A) on the first day of such period.
(d) Providing information to promote informed choice
(1) In general
The Secretary shall provide for activities under this subsection to broadly disseminate information to medicare beneficiaries (and prospective medicare beneficiaries) on the coverage options provided under this section in order to promote an active, informed selection among such options.
(2) Provision of notice
(A) Open season notification
At least 15 days before the beginning of each annual, coordinated election period (as defined in subsection (e)(3)(B)), the Secretary shall mail to each Medicare+Choice eligible individual residing in an area the following:
(i) General information
The general information described in paragraph (3).
(ii) List of plans and comparison of plan options
A list identifying the Medicare+Choice plans that are (or will be) available to residents of the area and information described in paragraph (4) concerning such plans. Such information shall be presented in a comparative form.
(iii) Additional information
Any other information that the Secretary determines will assist the individual in making the election under this section.
The mailing of such information shall be coordinated, to the extent practicable, with the mailing of any annual notice under
(B) Notifications required
(i) Notification to newly eligible Medicare Advantage eligible individuals
To the extent practicable, the Secretary shall, not later than 30 days before the beginning of the initial Medicare+Choice enrollment period for an individual described in subsection (e)(1), mail to the individual the information described in subparagraph (A).
(ii) Notification related to certain deemed elections
The Secretary shall require a Medicare Advantage organization that is offering a Medicare Advantage plan that has been converted from a reasonable cost reimbursement contract pursuant to
(I) a notification that such individual will, on such day, be deemed to have made an election with respect to such plan to receive benefits under this subchapter through an MA plan or MA–PD plan (and shall be enrolled in such plan) for the next plan year under subsection (c)(4)(A), but that the individual may make a different election during the annual, coordinated election period for such year;
(II) the information described in subparagraph (A);
(III) a description of the differences between such MA plan or MA–PD plan and the reasonable cost reimbursement contract in which the individual was most recently enrolled with respect to benefits covered under such plans, including cost-sharing, premiums, drug coverage, and provider networks;
(IV) information about the special period for elections under subsection (e)(2)(F); and
(V) other information the Secretary may specify.
(C) Form
The information disseminated under this paragraph shall be written and formatted using language that is easily understandable by medicare beneficiaries.
(D) Periodic updating
The information described in subparagraph (A) shall be updated on at least an annual basis to reflect changes in the availability of Medicare+Choice plans and the benefits and Medicare+Choice monthly basic and supplemental beneficiary premiums for such plans.
(3) General information
General information under this paragraph, with respect to coverage under this part during a year, shall include the following:
(A) Benefits under original medicare fee-for-service program option
A general description of the benefits covered under the original medicare fee-for-service program under parts A and B, including—
(i) covered items and services,
(ii) beneficiary cost sharing, such as deductibles, coinsurance, and copayment amounts, and
(iii) any beneficiary liability for balance billing.
(B) Election procedures
Information and instructions on how to exercise election options under this section.
(C) Rights
A general description of procedural rights (including grievance and appeals procedures) of beneficiaries under the original medicare fee-for-service program and the Medicare+Choice program and the right to be protected against discrimination based on health status-related factors under
(D) Information on medigap and medicare select
A general description of the benefits, enrollment rights, and other requirements applicable to medicare supplemental policies under
(E) Potential for contract termination
The fact that a Medicare+Choice organization may terminate its contract, refuse to renew its contract, or reduce the service area included in its contract, under this part, and the effect of such a termination, nonrenewal, or service area reduction may have on individuals enrolled with the Medicare+Choice plan under this part.
(F) Catastrophic coverage and single deductible
In the case of an MA regional plan, a description of the catastrophic coverage and single deductible applicable under the plan.
(4) Information comparing plan options
Information under this paragraph, with respect to a Medicare+Choice plan for a year, shall include the following:
(A) Benefits
The benefits covered under the plan, including the following:
(i) Covered items and services beyond those provided under the original medicare fee-for-service program.
(ii) Any beneficiary cost sharing, including information on the single deductible (if applicable) under
(iii) Any maximum limitations on out-of-pocket expenses.
(iv) In the case of an MSA plan, differences in cost sharing, premiums, and balance billing under such a plan compared to under other Medicare+Choice plans.
(v) In the case of a Medicare+Choice private fee-for-service plan, differences in cost sharing, premiums, and balance billing under such a plan compared to under other Medicare+Choice plans.
(vi) The extent to which an enrollee may obtain benefits through out-of-network health care providers.
(vii) The extent to which an enrollee may select among in-network providers and the types of providers participating in the plan's network.
(viii) The organization's coverage of emergency and urgently needed care.
(B) Premiums
(i) In general
The monthly amount of the premium charged to an individual.
(ii) Reductions
The reduction in part B premiums, if any.
(C) Service area
The service area of the plan.
(D) Quality and performance
To the extent available, plan quality and performance indicators for the benefits under the plan (and how they compare to such indicators under the original medicare fee-for-service program under parts A and B in the area involved), including—
(i) disenrollment rates for medicare enrollees electing to receive benefits through the plan for the previous 2 years (excluding disenrollment due to death or moving outside the plan's service area),
(ii) information on medicare enrollee satisfaction,
(iii) information on health outcomes, and
(iv) the recent record regarding compliance of the plan with requirements of this part (as determined by the Secretary).
(E) Supplemental benefits
Supplemental health care benefits, including any reductions in cost-sharing under
(5) Maintaining a toll-free number and Internet site
The Secretary shall maintain a toll-free number for inquiries regarding Medicare+Choice options and the operation of this part in all areas in which Medicare+Choice plans are offered and an Internet site through which individuals may electronically obtain information on such options and Medicare+Choice plans.
(6) Use of non-Federal entities
The Secretary may enter into contracts with non-Federal entities to carry out activities under this subsection.
(7) Provision of information
A Medicare+Choice organization shall provide the Secretary with such information on the organization and each Medicare+Choice plan it offers as may be required for the preparation of the information referred to in paragraph (2)(A).
(e) Coverage election periods
(1) Initial choice upon eligibility to make election if Medicare+Choice plans available to individual
If, at the time an individual first becomes entitled to benefits under part A and enrolled under part B, there is one or more Medicare+Choice plans offered in the area in which the individual resides, the individual shall make the election under this section during a period specified by the Secretary such that if the individual elects a Medicare+Choice plan during the period, coverage under the plan becomes effective as of the first date on which the individual may receive such coverage. If any portion of an individual's initial enrollment period under part B occurs after the end of the annual, coordinated election period described in paragraph (3)(B)(iii), the initial enrollment period under this part shall further extend through the end of the individual's initial enrollment period under part B.
(2) Open enrollment and disenrollment opportunities
Subject to paragraph (5)—
(A) Continuous open enrollment and disenrollment through 2005
At any time during the period beginning January 1, 1998, and ending on December 31, 2005, a Medicare+Choice eligible individual may change the election under subsection (a)(1).
(B) Continuous open enrollment and disenrollment for first 6 months during 2006
(i) In general
Subject to clause (ii), subparagraph (C)(iii),1 and subparagraph (D), at any time during the first 6 months of 2006, or, if the individual first becomes a Medicare+Choice eligible individual during 2006, during the first 6 months during 2006 in which the individual is a Medicare+Choice eligible individual, a Medicare+Choice eligible individual may change the election under subsection (a)(1).
(ii) Limitation of one change
An individual may exercise the right under clause (i) only once. The limitation under this clause shall not apply to changes in elections effected during an annual, coordinated election period under paragraph (3) or during a special enrollment period under the first sentence of paragraph (4).
(C) Annual 45-day period from 2011 through 2018 for disenrollment from MA plans to elect to receive benefits under the original Medicare fee-for-service program
Subject to subparagraph (D), at any time during the first 45 days of a year (beginning with 2011 and ending with 2018), an individual who is enrolled in a Medicare Advantage plan may change the election under subsection (a)(1), but only with respect to coverage under the original medicare fee-for-service program under parts A and B, and may elect qualified prescription drug coverage in accordance with
(D) Continuous open enrollment for institutionalized individuals
At any time after 2005 in the case of a Medicare+Choice eligible individual who is institutionalized (as defined by the Secretary), the individual may elect under subsection (a)(1)—
(i) to enroll in a Medicare+Choice plan; or
(ii) to change the Medicare+Choice plan in which the individual is enrolled.
(E) Limited continuous open enrollment of original fee-for-service enrollees in medicare advantage non-prescription drug plans
(i) In general
On any date during the period beginning on January 1, 2007, and ending on July 31, 2007, on which a Medicare Advantage eligible individual is an unenrolled fee-for-service individual (as defined in clause (ii)), the individual may elect under subsection (a)(1) to enroll in a Medicare Advantage plan that is not an MA–PD plan.
(ii) Unenrolled fee-for-service individual defined
In this subparagraph, the term "unenrolled fee-for-service individual" means, with respect to a date, a Medicare Advantage eligible individual who—
(I) is receiving benefits under this subchapter through enrollment in the original medicare fee-for-service program under parts A and B;
(II) is not enrolled in an MA plan on such date; and
(III) as of such date is not otherwise eligible to elect to enroll in an MA plan.
(iii) Limitation of one change during the applicable period
An individual may exercise the right under clause (i) only once during the period described in such clause.
(iv) No effect on coverage under a prescription drug plan
Nothing in this subparagraph shall be construed as permitting an individual exercising the right under clause (i)—
(I) who is enrolled in a prescription drug plan under part D, to disenroll from such plan or to enroll in a different prescription drug plan; or
(II) who is not enrolled in a prescription drug plan, to enroll in such a plan.
(F) Special period for certain deemed elections
(i) In general
At any time during the period beginning after the last day of the annual, coordinated election period under paragraph (3) in which an individual is deemed to have elected to enroll in an MA plan or MA–PD plan under subsection (c)(4) and ending on the last day of February of the first plan year for which the individual is enrolled in such plan, such individual may change the election under subsection (a)(1) (including changing the MA plan or MA–PD plan in which the individual is enrolled).
(ii) Limitation of one change
An individual may exercise the right under clause (i) only once during the applicable period described in such clause. The limitation under this clause shall not apply to changes in elections effected during an annual, coordinated election period under paragraph (3) or during a special enrollment period under paragraph (4).
(G) Continuous open enrollment and disenrollment for first 3 months in 2016 and subsequent years
(i) In general
Subject to clause (ii) and subparagraph (D)—
(I) in the case of an MA eligible individual who is enrolled in an MA plan, at any time during the first 3 months of a year (beginning with 2019); or
(II) in the case of an individual who first becomes an MA eligible individual during a year (beginning with 2019) and enrolls in an MA plan, during the first 3 months during such year in which the individual is an MA eligible individual;
such MA eligible individual may change the election under subsection (a)(1).
(ii) Limitation of one change during open enrollment period each year
An individual may change the election pursuant to clause (i) only once during the applicable 3-month period described in such clause in each year. The limitation under this clause shall not apply to changes in elections effected during an annual, coordinated election period under paragraph (3) or during a special enrollment period under paragraph (4).
(iii) Limited application to part D
Clauses (i) and (ii) of this subparagraph shall only apply with respect to changes in enrollment in a prescription drug plan under part D in the case of an individual who, previous to such change in enrollment, is enrolled in a Medicare Advantage plan.
(iv) Limitations on marketing
Pursuant to subsection (j), no unsolicited marketing or marketing materials may be sent to an individual described in clause (i) during the continuous open enrollment and disenrollment period established for the individual under such clause, notwithstanding marketing guidelines established by the Centers for Medicare & Medicaid Services.
(3) Annual, coordinated election period
(A) In general
Subject to paragraph (5), each individual who is eligible to make an election under this section may change such election during an annual, coordinated election period.
(B) Annual, coordinated election period
For purposes of this section, the term "annual, coordinated election period" means—
(i) with respect to a year before 2002, the month of November before such year;
(ii) with respect to 2002, 2003, 2004, and 2005, the period beginning on November 15 and ending on December 31 of the year before such year;
(iii) with respect to 2006, the period beginning on November 15, 2005, and ending on May 15, 2006;
(iv) with respect to 2007, 2008, 2009, and 2010, the period beginning on November 15 and ending on December 31 of the year before such year; and
(v) with respect to 2012 and succeeding years, the period beginning on October 15 and ending on December 7 of the year before such year.
(C) Medicare+Choice health information fairs
During the fall season of each year (beginning with 1999) and during the period described in subparagraph (B)(iii), in conjunction with the annual coordinated election period defined in subparagraph (B), the Secretary shall provide for a nationally coordinated educational and publicity campaign to inform Medicare+Choice eligible individuals about Medicare+Choice plans and the election process provided under this section.
(D) Special information campaigns
During November 1998 the Secretary shall provide for an educational and publicity campaign to inform Medicare+Choice eligible individuals about the availability of Medicare+Choice plans, and eligible organizations with risk-sharing contracts under
(4) Special election periods
Effective as of January 1, 2006, an individual may discontinue an election of a Medicare+Choice plan offered by a Medicare+Choice organization other than during an annual, coordinated election period and make a new election under this section if—
(A)(i) the certification of the organization or plan under this part has been terminated, or the organization or plan has notified the individual of an impending termination of such certification; or
(ii) the organization has terminated or otherwise discontinued providing the plan in the area in which the individual resides, or has notified the individual of an impending termination or discontinuation of such plan;
(B) the individual is no longer eligible to elect the plan because of a change in the individual's place of residence or other change in circumstances (specified by the Secretary, but not including termination of the individual's enrollment on the basis described in clause (i) or (ii) of subsection (g)(3)(B));
(C) the individual demonstrates (in accordance with guidelines established by the Secretary) that—
(i) the organization offering the plan substantially violated a material provision of the organization's contract under this part in relation to the individual (including the failure to provide an enrollee on a timely basis medically necessary care for which benefits are available under the plan or the failure to provide such covered care in accordance with applicable quality standards); or
(ii) the organization (or an agent or other entity acting on the organization's behalf) materially misrepresented the plan's provisions in marketing the plan to the individual; or
(D) the individual meets such other exceptional conditions as the Secretary may provide.
Effective as of January 1, 2006, an individual who, upon first becoming eligible for benefits under part A at age 65, enrolls in a Medicare+Choice plan under this part, the individual may discontinue the election of such plan, and elect coverage under the original fee-for-service plan, at any time during the 12-month period beginning on the effective date of such enrollment.
(5) Special rules for MSA plans
Notwithstanding the preceding provisions of this subsection, an individual—
(A) may elect an MSA plan only during—
(i) an initial open enrollment period described in paragraph (1), or
(ii) an annual, coordinated election period described in paragraph (3)(B);
(B) subject to subparagraph (C), may not discontinue an election of an MSA plan except during the periods described in clause (ii) or (iii) of subparagraph (A) and under the first sentence of paragraph (4); and
(C) who elects an MSA plan during an annual, coordinated election period, and who never previously had elected such a plan, may revoke such election, in a manner determined by the Secretary, by not later than December 15 following the date of the election.
(6) Open enrollment periods
Subject to paragraph (5), a Medicare+Choice organization—
(A) shall accept elections or changes to elections during the initial enrollment periods described in paragraph (1), during the period described in paragraph (2)(F), during the month of November 1998 and during the annual, coordinated election period under paragraph (3) for each subsequent year, and during special election periods described in the first sentence of paragraph (4); and
(B) may accept other changes to elections at such other times as the organization provides.
(f) Effectiveness of elections and changes of elections
(1) During initial coverage election period
An election of coverage made during the initial coverage election period under subsection (e)(1) shall take effect upon the date the individual becomes entitled to benefits under part A and enrolled under part B, except as the Secretary may provide (consistent with
(2) During continuous open enrollment periods
An election or change of coverage made under subsection (e)(2) shall take effect with the first day of the first calendar month following the date on which the election or change is made.
(3) Annual, coordinated election period
An election or change of coverage made during an annual, coordinated election period (as defined in subsection (e)(3)(B), other than the period described in clause (iii) of such subsection) in a year shall take effect as of the first day of the following year.
(4) Other periods
An election or change of coverage made during any other period under subsection (e)(4) shall take effect in such manner as the Secretary provides in a manner consistent (to the extent practicable) with protecting continuity of health benefit coverage.
(g) Guaranteed issue and renewal
(1) In general
Except as provided in this subsection, a Medicare+Choice organization shall provide that at any time during which elections are accepted under this section with respect to a Medicare+Choice plan offered by the organization, the organization will accept without restrictions individuals who are eligible to make such election.
(2) Priority
If the Secretary determines that a Medicare+Choice organization, in relation to a Medicare+Choice plan it offers, has a capacity limit and the number of Medicare+Choice eligible individuals who elect the plan under this section exceeds the capacity limit, the organization may limit the election of individuals of the plan under this section but only if priority in election is provided—
(A) first to such individuals as have elected the plan at the time of the determination, and
(B) then to other such individuals in such a manner that does not discriminate, on a basis described in
The preceding sentence shall not apply if it would result in the enrollment of enrollees substantially nonrepresentative, as determined in accordance with regulations of the Secretary, of the medicare population in the service area of the plan.
(3) Limitation on termination of election
(A) In general
Subject to subparagraph (B), a Medicare+Choice organization may not for any reason terminate the election of any individual under this section for a Medicare+Choice plan it offers.
(B) Basis for termination of election
A Medicare+Choice organization may terminate an individual's election under this section with respect to a Medicare+Choice plan it offers if—
(i) any Medicare+Choice monthly basic and supplemental beneficiary premiums required with respect to such plan are not paid on a timely basis (consistent with standards under
(ii) the individual has engaged in disruptive behavior (as specified in such standards), or
(iii) the plan is terminated with respect to all individuals under this part in the area in which the individual resides.
(C) Consequence of termination
(i) Terminations for cause
Any individual whose election is terminated under clause (i) or (ii) of subparagraph (B) is deemed to have elected the original medicare fee-for-service program option described in subsection (a)(1)(A).
(ii) Termination based on plan termination or service area reduction
Any individual whose election is terminated under subparagraph (B)(iii) shall have a special election period under subsection (e)(4)(A) in which to change coverage to coverage under another Medicare+Choice plan. Such an individual who fails to make an election during such period is deemed to have chosen to change coverage to the original medicare fee-for-service program option described in subsection (a)(1)(A).
(D) Organization obligation with respect to election forms
Pursuant to a contract under
(h) Approval of marketing material and application forms
(1) Submission
No marketing material or application form may be distributed by a Medicare+Choice organization to (or for the use of) Medicare+Choice eligible individuals unless—
(A) at least 45 days (or 10 days in the case described in paragraph (5)) before the date of distribution the organization has submitted the material or form to the Secretary for review, and
(B) the Secretary has not disapproved the distribution of such material or form.
(2) Review
The standards established under
(3) Deemed approval (1-stop shopping)
In the case of material or form that is submitted under paragraph (1)(A) to the Secretary or a regional office of the Department of Health and Human Services and the Secretary or the office has not disapproved the distribution of marketing material or form under paragraph (1)(B) with respect to a Medicare+Choice plan in an area, the Secretary is deemed not to have disapproved such distribution in all other areas covered by the plan and organization except with regard to that portion of such material or form that is specific only to an area involved.
(4) Prohibition of certain marketing practices
Each Medicare+Choice organization shall conform to fair marketing standards, in relation to Medicare+Choice plans offered under this part, included in the standards established under
(A) shall not permit a Medicare+Choice organization to provide for, subject to subsection (j)(2)(C), cash, gifts, prizes, or other monetary rebates as an inducement for enrollment or otherwise;
(B) may include a prohibition against a Medicare+Choice organization (or agent of such an organization) completing any portion of any election form used to carry out elections under this section on behalf of any individual;
(C) shall not permit a Medicare Advantage organization (or the agents, brokers, and other third parties representing such organization) to conduct the prohibited activities described in subsection (j)(1); and
(D) shall only permit a Medicare Advantage organization (and the agents, brokers, and other third parties representing such organization) to conduct the activities described in subsection (j)(2) in accordance with the limitations established under such subsection.
(5) Special treatment of marketing material following model marketing language
In the case of marketing material of an organization that uses, without modification, proposed model language specified by the Secretary, the period specified in paragraph (1)(A) shall be reduced from 45 days to 10 days.
(6) Required inclusion of plan type in plan name
For plan years beginning on or after January 1, 2010, a Medicare Advantage organization must ensure that the name of each Medicare Advantage plan offered by the Medicare Advantage organization includes the plan type of the plan (using standard terminology developed by the Secretary).
(7) Strengthening the ability of States to act in collaboration with the Secretary to address fraudulent or inappropriate marketing practices
(A) Appointment of agents and brokers
Each Medicare Advantage organization shall—
(i) only use agents and brokers who have been licensed under State law to sell Medicare Advantage plans offered by the Medicare Advantage organization;
(ii) in the case where a State has a State appointment law, abide by such law; and
(iii) report to the applicable State the termination of any such agent or broker, including the reasons for such termination (as required under applicable State law).
(B) Compliance with State information requests
Each Medicare Advantage organization shall comply in a timely manner with any request by a State for information regarding the performance of a licensed agent, broker, or other third party representing the Medicare Advantage organization as part of an investigation by the State into the conduct of the agent, broker, or other third party.
(i) Effect of election of Medicare+Choice plan option
(1) Payments to organizations
Subject to
(2) Only organization entitled to payment
Subject to
(3) FFS payment for expenses for kidney acquisitions
Paragraphs (1) and (2) shall not apply with respect to expenses for organ acquisitions for kidney transplants described in
(j) Prohibited activities described and limitations on the conduct of certain other activities
(1) Prohibited activities described
The following prohibited activities are described in this paragraph:
(A) Unsolicited means of direct contact
Any unsolicited means of direct contact of prospective enrollees, including soliciting door-to-door or any outbound telemarketing without the prospective enrollee initiating contact.
(B) Cross-selling
The sale of other non-health related products (such as annuities and life insurance) during any sales or marketing activity or presentation conducted with respect to a Medicare Advantage plan.
(C) Meals
The provision of meals of any sort, regardless of value, to prospective enrollees at promotional and sales activities.
(D) Sales and marketing in health care settings and at educational events
Sales and marketing activities for the enrollment of individuals in Medicare Advantage plans that are conducted—
(i) in health care settings in areas where health care is delivered to individuals (such as physician offices and pharmacies), except in the case where such activities are conducted in common areas in health care settings; and
(ii) at educational events.
(2) Limitations
The Secretary shall establish limitations with respect to at least the following:
(A) Scope of marketing appointments
The scope of any appointment with respect to the marketing of a Medicare Advantage plan. Such limitation shall require advance agreement with a prospective enrollee on the scope of the marketing appointment and documentation of such agreement by the Medicare Advantage organization. In the case where the marketing appointment is in person, such documentation shall be in writing.
(B) Co-branding
The use of the name or logo of a co-branded network provider on Medicare Advantage plan membership and marketing materials.
(C) Limitation of gifts to nominal dollar value
The offering of gifts and other promotional items other than those that are of nominal value (as determined by the Secretary) to prospective enrollees at promotional activities.
(D) Compensation
The use of compensation other than as provided under guidelines established by the Secretary. Such guidelines shall ensure that the use of compensation creates incentives for agents and brokers to enroll individuals in the Medicare Advantage plan that is intended to best meet their health care needs.
(E) Required training, annual retraining, and testing of agents, brokers, and other third parties
The use by a Medicare Advantage organization of any individual as an agent, broker, or other third party representing the organization that has not completed an initial training and testing program and does not complete an annual retraining and testing program.
(Aug. 14, 1935, ch. 531, title XVIII, §1851, as added
Editorial Notes
References in Text
Subsec. (e)(2)(C), referred to in subsec. (e)(2)(B)(i), was amended generally by section 3204(a)(1) of
Amendments
2016—Subsec. (a)(3).
Subsec. (e)(2)(C).
Subsec. (e)(2)(G).
Subsec. (i)(3).
2015—Subsec. (a)(3)(B).
Subsec. (c)(1).
Subsec. (c)(4).
Subsec. (d)(2)(B).
Subsec. (e)(2)(F).
Subsec. (e)(6)(A).
2010—Subsec. (b)(1)(C).
Subsec. (e)(2)(C).
Subsec. (e)(3)(B)(iv).
Subsec. (e)(3)(B)(v).
2009—Subsec. (i)(1).
2008—Subsec. (h)(4)(A).
Subsec. (h)(4)(C).
Subsec. (h)(4)(D).
Subsec. (h)(6).
Subsec. (h)(7).
Subsec. (j).
Subsec. (j)(2).
2007—Subsec. (e)(2)(E)(i).
Subsec. (e)(2)(E)(iii).
2006—Subsec. (e)(2)(E).
2003—Subsec. (a)(1).
Subsec. (a)(1)(B).
Subsec. (a)(2)(A).
Subsec. (a)(2)(A)(ii).
Subsec. (a)(3)(B)(ii).
Subsec. (b)(1)(B).
Subsec. (b)(1)(C).
Subsec. (b)(4).
Subsec. (b)(4)(A).
"(i) on or after January 1, 2003, unless the enrollment is the continuation of such an enrollment in effect as of such date; or
"(ii) as of any date if the number of such individuals so enrolled as of such date has reached 390,000."
Subsec. (b)(4)(C).
Subsec. (d)(3)(F).
Subsec. (d)(4)(A)(ii).
Subsec. (d)(4)(B)(i).
Subsec. (d)(4)(E).
Subsec. (e)(1).
Subsec. (e)(2).
Subsec. (e)(2)(B)(i).
Subsec. (e)(2)(C)(i).
Subsec. (e)(2)(C)(iii).
Subsec. (e)(3)(B).
Subsec. (e)(3)(C).
Subsec. (e)(3)(D).
Subsec. (e)(4).
Subsec. (e)(5)(A)(i).
Subsec. (e)(5)(A)(ii).
Subsec. (e)(5)(A)(iii).
Subsec. (f)(1).
Subsec. (f)(3).
Subsec. (i)(1).
Subsec. (i)(2).
2002—Subsec. (e)(2)(A).
Subsec. (e)(2)(B).
Subsec. (e)(2)(B)(i), (C)(i).
Subsec. (e)(2)(D).
Subsec. (e)(3)(B).
Subsec. (e)(4).
Subsec. (e)(6)(A).
2000—Subsec. (a)(3)(B).
Subsec. (d)(4)(B).
Subsec. (f)(2).
Subsec. (h)(1)(A).
Subsec. (h)(5).
1999—Subsec. (b)(1)(A).
Subsec. (b)(1)(C).
Subsec. (e)(2)(B)(i).
Subsec. (e)(2)(C)(i).
Subsec. (e)(2)(D).
Subsec. (e)(3)(C).
Subsec. (e)(4)(A).
Subsec. (f)(2).
Subsec. (i)(2).
Statutory Notes and Related Subsidiaries
Effective Date of 2016 Amendment
Effective Date of 2010 Amendment
Effective Date of 2008 Amendment
Effective Date of 2003 Amendment
Amendment by section 237(b)(2)(A) of
Effective Date of 2002 Amendment
Effective Date of 2000 Amendment
Amendment by section 1(a)(6) [title VI, §606(a)(2)(C)] of
"(1)
"(2)
Effective Date of 1999 Amendment
Amendment by section 1000(a)(6) [title III, §321(k)(6)(A)] of
"(1) The amendments made by subsection (a) [amending this section and
"(2) The amendments made by subsection (c) [amending this section] apply to elections made on or after the date of the enactment of this Act [Nov. 29, 1999] with respect to eliminations of Medicare+Choice payment areas from a service area that occur before, on, or after the date of the enactment of this Act."
Regulations
Construction
No Cuts in Guaranteed Benefits
Implementation of Medicare Advantage Program
"(a)
"(b)
"(c)
Report on Impact of Increased Financial Assistance to Medicare Advantage Plans
MedPAC Study and Report on Clarification of Authority Regarding Disapproval of Unreasonable Beneficiary Cost-Sharing
Moratorium on New Local Preferred Provider Organization Plans
Specialized MA Plans
"(1)
"(2)
MedPAC Study on Consumer Coalitions
Report on Accounting for VA and DOD Expenditures for Medicare Beneficiaries
Report on Medicare MSA (Medical Savings Account) Plans
GAO Audit and Reports on Provision of Medicare+Choice Health Information to Beneficiaries
"(1)
"(3) [(2)]
Enrollment Transition Rule
Secretarial Submission of Legislative Proposal
Report on Integration and Transition
Medicare Enrollment Demonstration Project
"(a)
"(1)
"(2)
"(A) the design of the project;
"(B) the selection criteria for the third-party contractor; and
"(C) the establishment of performance standards, as described in paragraph (3).
"(3)
"(A)
"(B)
"(b)
"(c)
"(d)
"(e)
1 See References in Text note below.
§1395w–22. Benefits and beneficiary protections
(a) Basic benefits
(1) Requirement
(A) In general
Except as provided in
(B) Benefits under the original medicare fee-for-service program option defined
(i) In general
For purposes of this part, the term "benefits under the original medicare fee-for-service program option" means, subject to subsection (m), those items and services (other than hospice care or coverage for organ acquisitions for kidney transplants, including as covered under
(ii) Special rule for regional plans
In the case of an MA regional plan in determining an actuarially equivalent level of cost-sharing with respect to benefits under the original medicare fee-for-service program option, there shall only be taken into account, with respect to the application of
(iii) Limitation on variation of cost sharing for certain benefits
Subject to clause (v), cost-sharing for services described in clause (iv) shall not exceed the cost-sharing required for those services under parts A and B.
(iv) Services described
The following services are described in this clause:
(I) Chemotherapy administration services.
(II) Renal dialysis services (as defined in
(III) Skilled nursing care.
(IV) Clinical diagnostic laboratory test administered during any portion of the emergency period defined in paragraph (1)(B) of
(V) Specified COVID–19 testing-related services (as described in
(VI) A COVID–19 vaccine and its administration described in
(VII) A drug or biological product that is a selected drug (as referred to in
(VIII) Such other services that the Secretary determines appropriate (including services that the Secretary determines require a high level of predictability and transparency for beneficiaries).
(v) Exception
In the case of services described in clause (iv), other than subclauses (IV), (V), and (VI) of such clause, for which there is no cost-sharing required under parts A and B, cost-sharing may be required for those services in accordance with clause (i).
(vi) Prohibition of application of certain requirements for COVID–19 testing
In the case of a product or service described in subclause (IV) or (V), respectively, of clause (iv) that is administered or furnished during any portion of the emergency period described in such subclause beginning on or after March 18, 2020, an MA plan may not impose any prior authorization or other utilization management requirements with respect to the coverage of such a product or service under such plan.
(2) Satisfaction of requirement
(A) In general
A Medicare+Choice plan (other than an MSA plan) offered by a Medicare+Choice organization satisfies paragraph (1)(A), with respect to benefits for items and services furnished other than through a provider or other person that has a contract with the organization offering the plan, if the plan provides payment in an amount so that—
(i) the sum of such payment amount and any cost sharing provided for under the plan, is equal to at least
(ii) the total dollar amount of payment for such items and services as would otherwise be authorized under parts A and B (including any balance billing permitted under such parts).
(B) Reference to related provisions
For provision relating to—
(i) limitations on balance billing against Medicare+Choice organizations for non-contract providers, see subsection (k) and
(ii) limiting actuarial value of enrollee liability for covered benefits, see
(C) Election of uniform coverage determination
In the case of a Medicare+Choice organization that offers a Medicare+Choice plan in an area in which more than one local coverage determination is applied with respect to different parts of the area, the organization may elect to have the local coverage determination for the part of the area that is most beneficial to Medicare+Choice enrollees (as identified by the Secretary) apply with respect to all Medicare+Choice enrollees enrolled in the plan.
(3) Supplemental benefits
(A) Benefits included subject to Secretary's approval
Subject to subparagraph (D), each Medicare+Choice organization may provide to individuals enrolled under this part, other than under an MSA plan (without affording those individuals an option to decline the coverage), supplemental health care benefits that the Secretary may approve. The Secretary shall approve any such supplemental benefits unless the Secretary determines that including such supplemental benefits would substantially discourage enrollment by Medicare+Choice eligible individuals with the organization.
(B) At enrollees' option
(i) In general
Subject to clause (ii), a Medicare+Choice organization may provide to individuals enrolled under this part supplemental health care benefits that the individuals may elect, at their option, to have covered.
(ii) Special rule for MSA plans
A Medicare+Choice organization may not provide, under an MSA plan, supplemental health care benefits that cover the deductible described in
(C) Application to Medicare+Choice private fee-for-service plans
Nothing in this paragraph shall be construed as preventing a Medicare+Choice private fee-for-service plan from offering supplemental benefits that include payment for some or all of the balance billing amounts permitted consistent with subsection (k) and coverage of additional services that the plan finds to be medically necessary. Such benefits may include reductions in cost-sharing below the actuarial value specified in
(D) Expanding supplemental benefits to meet the needs of chronically ill enrollees
(i) In general
For plan year 2020 and subsequent plan years, in addition to any supplemental health care benefits otherwise provided under this paragraph, an MA plan, including a specialized MA plan for special needs individuals (as defined in
(ii) Supplemental benefits described
(I) In general
Supplemental benefits described in this clause are supplemental benefits that, with respect to a chronically ill enrollee, have a reasonable expectation of improving or maintaining the health or overall function of the chronically ill enrollee and may not be limited to being primarily health related benefits.
(II) Authority to waive uniformity requirements
The Secretary may, only with respect to supplemental benefits provided to a chronically ill enrollee under this subparagraph, waive the uniformity requirements under this part, as determined appropriate by the Secretary.
(iii) Chronically ill enrollee defined
In this subparagraph, the term "chronically ill enrollee" means an enrollee in an MA plan that the Secretary determines—
(I) has one or more comorbid and medically complex chronic conditions that is life threatening or significantly limits the overall health or function of the enrollee;
(II) has a high risk of hospitalization or other adverse health outcomes; and
(III) requires intensive care coordination.
(4) Organization as secondary payer
Notwithstanding any other provision of law, a Medicare+Choice organization may (in the case of the provision of items and services to an individual under a Medicare+Choice plan under circumstances in which payment under this subchapter is made secondary pursuant to
(A) the insurance carrier, employer, or other entity which under such law, plan, or policy is to pay for the provision of such services, or
(B) such individual to the extent that the individual has been paid under such law, plan, or policy for such services.
(5) National coverage determinations and legislative changes in benefits
If there is a national coverage determination or legislative change in benefits required to be provided under this part made in the period beginning on the date of an announcement under
(A) such determination or legislative change in benefits shall not apply to contracts under this part until the first contract year that begins after the end of such period, and
(B) if such coverage determination or legislative change provides for coverage of additional benefits or coverage under additional circumstances,
The projection under the previous sentence shall be based on an analysis by the Chief Actuary of the Centers for Medicare & Medicaid Services of the actuarial costs associated with the coverage determination or legislative change in benefits.
(6) Special benefit rules for regional plans
In the case of an MA plan that is an MA regional plan, benefits under the plan shall include the benefits described in paragraphs (1) and (2) of
(7) Limitation on cost-sharing for dual eligibles and qualified medicare beneficiaries
In the case of an individual who is a full-benefit dual eligible individual (as defined in
(b) Antidiscrimination
(1) Beneficiaries
A Medicare Advantage organization may not deny, limit, or condition the coverage or provision of benefits under this part, for individuals permitted to be enrolled with the organization under this part, based on any health status-related factor described in section 2702(a)(1) of the Public Health Service Act.1 The Secretary shall not approve a plan of an organization if the Secretary determines that the design of the plan and its benefits are likely to substantially discourage enrollment by certain MA eligible individuals with the organization.
(2) Providers
A Medicare+Choice organization shall not discriminate with respect to participation, reimbursement, or indemnification as to any provider who is acting within the scope of the provider's license or certification under applicable State law, solely on the basis of such license or certification. This paragraph shall not be construed to prohibit a plan from including providers only to the extent necessary to meet the needs of the plan's enrollees or from establishing any measure designed to maintain quality and control costs consistent with the responsibilities of the plan.
(c) Disclosure requirements
(1) Detailed description of plan provisions
A Medicare+Choice organization shall disclose, in clear, accurate, and standardized form to each enrollee with a Medicare+Choice plan offered by the organization under this part at the time of enrollment and at least annually thereafter, the following information regarding such plan:
(A) Service area
The plan's service area.
(B) Benefits
Benefits offered under the plan, including information described in
(C) Access
The number, mix, and distribution of plan providers, out-of-network coverage (if any) provided by the plan, and any point-of-service option (including the supplemental premium for such option).
(D) Out-of-area coverage
Out-of-area coverage provided by the plan.
(E) Emergency coverage
Coverage of emergency services, including—
(i) the appropriate use of emergency services, including use of the 911 telephone system or its local equivalent in emergency situations and an explanation of what constitutes an emergency situation;
(ii) the process and procedures of the plan for obtaining emergency services; and
(iii) the locations of (I) emergency departments, and (II) other settings, in which plan physicians and hospitals provide emergency services and post-stabilization care.
(F) Supplemental benefits
Supplemental benefits available from the organization offering the plan, including—
(i) whether the supplemental benefits are optional,
(ii) the supplemental benefits covered, and
(iii) the Medicare+Choice monthly supplemental beneficiary premium for the supplemental benefits.
(G) Prior authorization rules
Rules regarding prior authorization or other review requirements that could result in nonpayment.
(H) Plan grievance and appeals procedures
All plan appeal or grievance rights and procedures.
(I) Quality improvement program
A description of the organization's quality improvement program under subsection (e).
(2) Disclosure upon request
Upon request of a Medicare+Choice eligible individual, a Medicare+Choice organization must provide the following information to such individual:
(A) The general coverage information and general comparative plan information made available under clauses (i) and (ii) of
(B) Information on procedures used by the organization to control utilization of services and expenditures.
(C) Information on the number of grievances, redeterminations, and appeals and on the disposition in the aggregate of such matters.
(D) An overall summary description as to the method of compensation of participating physicians.
(d) Access to services
(1) In general
A Medicare+Choice organization offering a Medicare+Choice plan may select the providers from whom the benefits under the plan are provided so long as—
(A) the organization makes such benefits available and accessible to each individual electing the plan within the plan service area with reasonable promptness and in a manner which assures continuity in the provision of benefits;
(B) when medically necessary the organization makes such benefits available and accessible 24 hours a day and 7 days a week;
(C) the plan provides for reimbursement with respect to services which are covered under subparagraphs (A) and (B) and which are provided to such an individual other than through the organization, if—
(i) the services were not emergency services (as defined in paragraph (3)), but (I) the services were medically necessary and immediately required because of an unforeseen illness, injury, or condition, and (II) it was not reasonable given the circumstances to obtain the services through the organization,
(ii) the services were renal dialysis services and were provided other than through the organization because the individual was temporarily out of the plan's service area, or
(iii) the services are maintenance care or post-stabilization care covered under the guidelines established under paragraph (2);
(D) the organization provides access to appropriate providers, including credentialed specialists, for medically necessary treatment and services; and
(E) coverage is provided for emergency services (as defined in paragraph (3)) without regard to prior authorization or the emergency care provider's contractual relationship with the organization.
(2) Guidelines respecting coordination of post-stabilization care
A Medicare+Choice plan shall comply with such guidelines as the Secretary may prescribe relating to promoting efficient and timely coordination of appropriate maintenance and post-stabilization care of an enrollee after the enrollee has been determined to be stable under
(3) "Emergency services" defined
In this subsection—
(A) In general
The term "emergency services" means, with respect to an individual enrolled with an organization, covered inpatient and outpatient services that—
(i) are furnished by a provider that is qualified to furnish such services under this subchapter, and
(ii) are needed to evaluate or stabilize an emergency medical condition (as defined in subparagraph (B)).
(B) Emergency medical condition based on prudent layperson
The term "emergency medical condition" means a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in—
(i) placing the health of the individual (or, with respect to a pregnant woman, the health of the woman or her unborn child) in serious jeopardy,
(ii) serious impairment to bodily functions, or
(iii) serious dysfunction of any bodily organ or part.
(4) Assuring access to services in Medicare+Choice private fee-for-service plans
In addition to any other requirements under this part, in the case of a Medicare+Choice private fee-for-service plan, the organization offering the plan must demonstrate to the Secretary that the organization has sufficient number and range of health care professionals and providers willing to provide services under the terms of the plan. Subject to paragraphs (5) and (6), the Secretary shall find that an organization has met such requirement with respect to any category of health care professional or provider if, with respect to that category of provider—
(A) the plan has established payment rates for covered services furnished by that category of provider that are not less than the payment rates provided for under part A, part B, or both, for such services, or
(B) the plan has contracts or agreements (other than deemed contracts or agreements under subsection (j)(6)) with a sufficient number and range of providers within such category to meet the access standards in subparagraphs (A) through (E) of paragraph (1),
or a combination of both. The previous sentence shall not be construed as restricting the persons from whom enrollees under such a plan may obtain covered benefits, except that, if a plan entirely meets such requirement with respect to a category of health care professional or provider on the basis of subparagraph (B), it may provide for a higher beneficiary copayment in the case of health care professionals and providers of that category who do not have contracts or agreements (other than deemed contracts or agreements under subsection (j)(6)) to provide covered services under the terms of the plan.
(5) Requirement of certain nonemployer Medicare Advantage private fee-for-service plans to use contracts with providers
(A) In general
For plan year 2011 and subsequent plan years, in the case of a Medicare Advantage private fee-for-service plan not described in paragraph (1) or (2) of
(B) Network area defined
For purposes of subparagraph (A), the term "network area" means, for a plan year, an area which the Secretary identifies (in the Secretary's announcement of the proposed payment rates for the previous plan year under
(C) Network-based plan defined
(i) In general
For purposes of subparagraph (B), the term "network-based plan" means—
(I) except as provided in clause (ii), a Medicare Advantage plan that is a coordinated care plan described in
(II) a network-based MSA plan; and
(III) a reasonable cost reimbursement plan under
(ii) Exclusion of non-network regional PPOS
The term "network-based plan" shall not include an MA regional plan that, with respect to the area, meets access adequacy standards under this part substantially through the authority of section 422.112(a)(1)(ii) of title 42, Code of Federal Regulations, rather than through written contracts.
(6) Requirement of all employer Medicare Advantage private fee-for-service plans to use contracts with providers
For plan year 2011 and subsequent plan years, in the case of a Medicare Advantage private fee-for-service plan that is described in paragraph (1) or (2) of
(e) Quality improvement program
(1) In general
Each MA organization shall have an ongoing quality improvement program for the purpose of improving the quality of care provided to enrollees in each MA plan offered by such organization.
(2) Chronic care improvement programs
As part of the quality improvement program under paragraph (1), each MA organization shall have a chronic care improvement program. Each chronic care improvement program shall have a method for monitoring and identifying enrollees with multiple or sufficiently severe chronic conditions that meet criteria established by the organization for participation under the program.
(3) Data
(A) Collection, analysis, and reporting
(i) In general
Except as provided in clauses (ii) and (iii) with respect to plans described in such clauses and subject to subparagraph (B), as part of the quality improvement program under paragraph (1), each MA organization shall provide for the collection, analysis, and reporting of data that permits the measurement of health outcomes and other indices of quality. With respect to MA private fee-for-service plans and MSA plans, the requirements under the preceding sentence may not exceed the requirements under this subparagraph with respect to MA local plans that are preferred provider organization plans, except that, for plan year 2010, the limitation under clause (iii) shall not apply and such requirements shall apply only with respect to administrative claims data.
(ii) Special requirements for specialized MA plans for special needs individuals
In addition to the data required to be collected, analyzed, and reported under clause (i) and notwithstanding the limitations under subparagraph (B), as part of the quality improvement program under paragraph (1), each MA organization offering a specialized Medicare Advantage plan for special needs individuals shall provide for the collection, analysis, and reporting of data that permits the measurement of health outcomes and other indices of quality with respect to the requirements described in paragraphs (2) through (5) of subsection (f). Such data may be based on claims data and shall be at the plan level.
(iii) Application to local preferred provider organizations and MA regional plans
Clause (i) shall apply to MA organizations with respect to MA local plans that are preferred provider organization plans and to MA regional plans only insofar as services are furnished by providers or services, physicians, and other health care practitioners and suppliers that have contracts with such organization to furnish services under such plans.
(iv) Definition of preferred provider organization plan
In this subparagraph, the term "preferred provider organization plan" means an MA plan that—
(I) has a network of providers that have agreed to a contractually specified reimbursement for covered benefits with the organization offering the plan;
(II) provides for reimbursement for all covered benefits regardless of whether such benefits are provided within such network of providers; and
(III) is offered by an organization that is not licensed or organized under State law as a health maintenance organization.
(B) Limitations
(i) Types of data
The Secretary shall not collect under subparagraph (A) data on quality, outcomes, and beneficiary satisfaction to facilitate consumer choice and program administration other than the types of data that were collected by the Secretary as of November 1, 2003.
(ii) Changes in types of data
Subject to subclause (iii), the Secretary may only change the types of data that are required to be submitted under subparagraph (A) after submitting to Congress a report on the reasons for such changes that was prepared in consultation with MA organizations and private accrediting bodies.
(iii) Construction
Nothing in the 2 subsection shall be construed as restricting the ability of the Secretary to carry out the duties under
(4) Treatment of accreditation
(A) In general
The Secretary shall provide that a Medicare+Choice organization is deemed to meet all the requirements described in any specific clause of subparagraph (B) if the organization is accredited (and periodically reaccredited) by a private accrediting organization under a process that the Secretary has determined assures that the accrediting organization applies and enforces standards that meet or exceed the standards established under
(B) Requirements described
The provisions described in this subparagraph are the following:
(i) Paragraphs (1) through (3) of this subsection (relating to quality improvement programs).
(ii) Subsection (b) (relating to antidiscrimination).
(iii) Subsection (d) (relating to access to services).
(iv) Subsection (h) (relating to confidentiality and accuracy of enrollee records).
(v) Subsection (i) (relating to information on advance directives).
(vi) Subsection (j) (relating to provider participation rules).
(vii) The requirements described in
(C) Timely action on applications
The Secretary shall determine, within 210 days after the date the Secretary receives an application by a private accrediting organization and using the criteria specified in
(D) Construction
Nothing in this paragraph shall be construed as limiting the authority of the Secretary under
(f) Grievance mechanism
Each Medicare+Choice organization must provide meaningful procedures for hearing and resolving grievances between the organization (including any entity or individual through which the organization provides health care services) and enrollees with Medicare+Choice plans of the organization under this part.
(g) Coverage determinations, reconsiderations, and appeals
(1) Determinations by organization
(A) In general
A Medicare+Choice organization shall have a procedure for making determinations regarding whether an individual enrolled with the plan of the organization under this part is entitled to receive a health service under this section and the amount (if any) that the individual is required to pay with respect to such service. Subject to paragraph (3), such procedures shall provide for such determination to be made on a timely basis.
(B) Explanation of determination
Such a determination that denies coverage, in whole or in part, shall be in writing and shall include a statement in understandable language of the reasons for the denial and a description of the reconsideration and appeals processes.
(2) Reconsiderations
(A) In general
The organization shall provide for reconsideration of a determination described in paragraph (1)(B) upon request by the enrollee involved. The reconsideration shall be within a time period specified by the Secretary, but shall be made, subject to paragraph (3), not later than 60 days after the date of the receipt of the request for reconsideration.
(B) Physician decision on certain reconsiderations
A reconsideration relating to a determination to deny coverage based on a lack of medical necessity shall be made only by a physician with appropriate expertise in the field of medicine which necessitates treatment who is other than a physician involved in the initial determination.
(3) Expedited determinations and reconsiderations
(A) Receipt of requests
(i) Enrollee requests
An enrollee in a Medicare+Choice plan may request, either in writing or orally, an expedited determination under paragraph (1) or an expedited reconsideration under paragraph (2) by the Medicare+Choice organization.
(ii) Physician requests
A physician, regardless whether the physician is affiliated with the organization or not, may request, either in writing or orally, such an expedited determination or reconsideration.
(B) Organization procedures
(i) In general
The Medicare+Choice organization shall maintain procedures for expediting organization determinations and reconsiderations when, upon request of an enrollee, the organization determines that the application of the normal time frame for making a determination (or a reconsideration involving a determination) could seriously jeopardize the life or health of the enrollee or the enrollee's ability to regain maximum function.
(ii) Expedition required for physician requests
In the case of a request for an expedited determination or reconsideration made under subparagraph (A)(ii), the organization shall expedite the determination or reconsideration if the request indicates that the application of the normal time frame for making a determination (or a reconsideration involving a determination) could seriously jeopardize the life or health of the enrollee or the enrollee's ability to regain maximum function.
(iii) Timely response
In cases described in clauses (i) and (ii), the organization shall notify the enrollee (and the physician involved, as appropriate) of the determination or reconsideration under time limitations established by the Secretary, but not later than 72 hours of the time of receipt of the request for the determination or reconsideration (or receipt of the information necessary to make the determination or reconsideration), or such longer period as the Secretary may permit in specified cases.
(4) Independent review of certain coverage denials
The Secretary shall contract with an independent, outside entity to review and resolve in a timely manner reconsiderations that affirm denial of coverage, in whole or in part. The provisions of
(5) Appeals
An enrollee with a Medicare+Choice plan of a Medicare+Choice organization under this part who is dissatisfied by reason of the enrollee's failure to receive any health service to which the enrollee believes the enrollee is entitled and at no greater charge than the enrollee believes the enrollee is required to pay is entitled, if the amount in controversy is $100 or more, to a hearing before the Secretary to the same extent as is provided in
(h) Confidentiality and accuracy of enrollee records
Insofar as a Medicare+Choice organization maintains medical records or other health information regarding enrollees under this part, the Medicare+Choice organization shall establish procedures—
(1) to safeguard the privacy of any individually identifiable enrollee information;
(2) to maintain such records and information in a manner that is accurate and timely; and
(3) to assure timely access of enrollees to such records and information.
(i) Information on advance directives
Each Medicare+Choice organization shall meet the requirement of
(j) Rules regarding provider participation
(1) Procedures
Insofar as a Medicare+Choice organization offers benefits under a Medicare+Choice plan through agreements with physicians, the organization shall establish reasonable procedures relating to the participation (under an agreement between a physician and the organization) of physicians under such a plan. Such procedures shall include—
(A) providing notice of the rules regarding participation,
(B) providing written notice of participation decisions that are adverse to physicians, and
(C) providing a process within the organization for appealing such adverse decisions, including the presentation of information and views of the physician regarding such decision.
(2) Consultation in medical policies
A Medicare+Choice organization shall consult with physicians who have entered into participation agreements with the organization regarding the organization's medical policy, quality, and medical management procedures.
(3) Prohibiting interference with provider advice to enrollees
(A) In general
Subject to subparagraphs (B) and (C), a Medicare+Choice organization (in relation to an individual enrolled under a Medicare+Choice plan offered by the organization under this part) shall not prohibit or otherwise restrict a covered health care professional (as defined in subparagraph (D)) from advising such an individual who is a patient of the professional about the health status of the individual or medical care or treatment for the individual's condition or disease, regardless of whether benefits for such care or treatment are provided under the plan, if the professional is acting within the lawful scope of practice.
(B) Conscience protection
Subparagraph (A) shall not be construed as requiring a Medicare+Choice plan to provide, reimburse for, or provide coverage of a counseling or referral service if the Medicare+Choice organization offering the plan—
(i) objects to the provision of such service on moral or religious grounds; and
(ii) in the manner and through the written instrumentalities such Medicare+Choice organization deems appropriate, makes available information on its policies regarding such service to prospective enrollees before or during enrollment and to enrollees within 90 days after the date that the organization or plan adopts a change in policy regarding such a counseling or referral service.
(C) Construction
Nothing in subparagraph (B) shall be construed to affect disclosure requirements under State law or under the Employee Retirement Income Security Act of 1974 [
(D) "Health care professional" defined
For purposes of this paragraph, the term "health care professional" means a physician (as defined in
(4) Limitations on physician incentive plans
(A) In general
No Medicare+Choice organization may operate any physician incentive plan (as defined in subparagraph (B)) unless the organization provides assurances satisfactory to the Secretary that the following requirements are met:
(i) No specific payment is made directly or indirectly under the plan to a physician or physician group as an inducement to reduce or limit medically necessary services provided with respect to a specific individual enrolled with the organization.
(ii) If the plan places a physician or physician group at substantial financial risk (as determined by the Secretary) for services not provided by the physician or physician group, the organization provides stop-loss protection for the physician or group that is adequate and appropriate, based on standards developed by the Secretary that take into account the number of physicians placed at such substantial financial risk in the group or under the plan and the number of individuals enrolled with the organization who receive services from the physician or group.
(B) "Physician incentive plan" defined
In this paragraph, the term "physician incentive plan" means any compensation arrangement between a Medicare+Choice organization and a physician or physician group that may directly or indirectly have the effect of reducing or limiting services provided with respect to individuals enrolled with the organization under this part.
(5) Limitation on provider indemnification
A Medicare+Choice organization may not provide (directly or indirectly) for a health care professional, provider of services, or other entity providing health care services (or group of such professionals, providers, or entities) to indemnify the organization against any liability resulting from a civil action brought for any damage caused to an enrollee with a Medicare+Choice plan of the organization under this part by the organization's denial of medically necessary care.
(6) Special rules for Medicare+Choice private fee-for-service plans
For purposes of applying this part (including subsection (k)(1)) and
(A) the provider, professional, or other entity furnishes services that are covered under the plan to such an enrollee; and
(B) before providing such services, the provider, professional, or other entity—
(i) has been informed of the individual's enrollment under the plan, and
(ii) either—
(I) has been informed of the terms and conditions of payment for such services under the plan, or
(II) is given a reasonable opportunity to obtain information concerning such terms and conditions,
in a manner reasonably designed to effect informed agreement by a provider.
The previous sentence shall only apply in the absence of an explicit agreement between such a provider, professional, or other entity and the Medicare+Choice organization.
(7) Promotion of e-prescribing by MA plans
(A) In general
An MA–PD plan may provide for a separate payment or otherwise provide for a differential payment for a participating physician that prescribes covered part D drugs in accordance with an electronic prescription drug program that meets standards established under
(B) Considerations
Such payment may take into consideration the costs of the physician in implementing such a program and may also be increased for those participating physicians who significantly increase—
(i) formulary compliance;
(ii) lower cost, therapeutically equivalent alternatives;
(iii) reductions in adverse drug interactions; and
(iv) efficiencies in filing prescriptions through reduced administrative costs.
(C) Structure
Additional or increased payments under this subsection may be structured in the same manner as medication therapy management fees are structured under section 1395w–104(c)(2)(E) 1 of this title.
(k) Treatment of services furnished by certain providers
(1) In general
Except as provided in paragraph (2), a physician or other entity (other than a provider of services) that does not have a contract establishing payment amounts for services furnished to an individual enrolled under this part with a Medicare+Choice organization described in
(2) Application to Medicare+Choice private fee-for-service plans
(A) Balance billing limits under Medicare+Choice private fee-for-service plans in case of contract providers
(i) In general
In the case of an individual enrolled in a Medicare+Choice private fee-for-service plan under this part, a physician, provider of services, or other entity that has a contract (including through the operation of subsection (j)(6)) establishing a payment rate for services furnished to the enrollee shall accept as payment in full for covered services under this subchapter that are furnished to such an individual an amount not to exceed (including any deductibles, coinsurance, copayments, or balance billing otherwise permitted under the plan) an amount equal to 115 percent of such payment rate.
(ii) Procedures to enforce limits
The Medicare+Choice organization that offers such a plan shall establish procedures, similar to the procedures described in
(iii) Assuring enforcement
If the Medicare+Choice organization fails to establish and enforce procedures required under clause (ii), the organization is subject to intermediate sanctions under
(B) Enrollee liability for noncontract providers
For provision—
(i) establishing minimum payment rate in the case of noncontract providers under a Medicare+Choice private fee-for-service plan, see subsection (a)(2); or
(ii) limiting enrollee liability in the case of covered services furnished by such providers, see paragraph (1) and
(C) Information on beneficiary liability
(i) In general
Each Medicare+Choice organization that offers a Medicare+Choice private fee-for-service plan shall provide that enrollees under the plan who are furnished services for which payment is sought under the plan are provided an appropriate explanation of benefits (consistent with that provided under parts A and B and, if applicable, under medicare supplemental policies) that includes a clear statement of the amount of the enrollee's liability (including any liability for balance billing consistent with this subsection) with respect to payments for such services.
(ii) Advance notice before receipt of inpatient hospital services and certain other services
In addition, such organization shall, in its terms and conditions of payments to hospitals for inpatient hospital services and for other services identified by the Secretary for which the amount of the balance billing under subparagraph (A) could be substantial, require the hospital to provide to the enrollee, before furnishing such services and if the hospital imposes balance billing under subparagraph (A)—
(I) notice of the fact that balance billing is permitted under such subparagraph for such services, and
(II) a good faith estimate of the likely amount of such balance billing (if any), with respect to such services, based upon the presenting condition of the enrollee.
(l) Return to home skilled nursing facilities for covered post-hospital extended care services
(1) Ensuring return to home SNF
(A) In general
In providing coverage of post-hospital extended care services, a Medicare+Choice plan shall provide for such coverage through a home skilled nursing facility if the following conditions are met:
(i) Enrollee election
The enrollee elects to receive such coverage through such facility.
(ii) SNF agreement
The facility has a contract with the Medicare+Choice organization for the provision of such services, or the facility agrees to accept substantially similar payment under the same terms and conditions that apply to similarly situated skilled nursing facilities that are under contract with the Medicare+Choice organization for the provision of such services and through which the enrollee would otherwise receive such services.
(B) Manner of payment to home SNF
The organization shall provide payment to the home skilled nursing facility consistent with the contract or the agreement described in subparagraph (A)(ii), as the case may be.
(2) No less favorable coverage
The coverage provided under paragraph (1) (including scope of services, cost-sharing, and other criteria of coverage) shall be no less favorable to the enrollee than the coverage that would be provided to the enrollee with respect to a skilled nursing facility the post-hospital extended care services of which are otherwise covered under the Medicare+Choice plan.
(3) Rule of construction
Nothing in this subsection shall be construed to do the following:
(A) To require coverage through a skilled nursing facility that is not otherwise qualified to provide benefits under part A for medicare beneficiaries not enrolled in a Medicare+Choice plan.
(B) To prevent a skilled nursing facility from refusing to accept, or imposing conditions upon the acceptance of, an enrollee for the receipt of post-hospital extended care services.
(4) Definitions
In this subsection:
(A) Home skilled nursing facility
The term "home skilled nursing facility" means, with respect to an enrollee who is entitled to receive post-hospital extended care services under a Medicare+Choice plan, any of the following skilled nursing facilities:
(i) SNF residence at time of admission
The skilled nursing facility in which the enrollee resided at the time of admission to the hospital preceding the receipt of such post-hospital extended care services.
(ii) SNF in continuing care retirement community
A skilled nursing facility that is providing such services through a continuing care retirement community (as defined in subparagraph (B)) which provided residence to the enrollee at the time of such admission.
(iii) SNF residence of spouse at time of discharge
The skilled nursing facility in which the spouse of the enrollee is residing at the time of discharge from such hospital.
(B) Continuing care retirement community
The term "continuing care retirement community" means, with respect to an enrollee in a Medicare+Choice plan, an arrangement under which housing and health-related services are provided (or arranged) through an organization for the enrollee under an agreement that is effective for the life of the enrollee or for a specified period.
(m) Provision of additional telehealth benefits
(1) MA plan option
For plan year 2020 and subsequent plan years, subject to the requirements of paragraph (3), an MA plan may provide additional telehealth benefits (as defined in paragraph (2)) to individuals enrolled under this part.
(2) Additional telehealth benefits defined
(A) In general
For purposes of this subsection and
(i) Definition
The term "additional telehealth benefits" means services—
(I) for which benefits are available under part B, including services for which payment is not made under
(II) that are identified for such year as clinically appropriate to furnish using electronic information and telecommunications technology when a physician (as defined in
(ii) Exclusion of capital and infrastructure costs and investments
The term "additional telehealth benefits" does not include capital and infrastructure costs and investments relating to such benefits.
(B) Public comment
Not later than November 30, 2018, the Secretary shall solicit comments on—
(i) what types of items and services (including those provided through supplemental health care benefits, such as remote patient monitoring, secure messaging, store and forward technologies, and other non-face-to-face communication) should be considered to be additional telehealth benefits; and
(ii) the requirements for the provision or furnishing of such benefits (such as training and coordination requirements).
(3) Requirements for additional telehealth benefits
The Secretary shall specify requirements for the provision or furnishing of additional telehealth benefits, including with respect to the following:
(A) Physician or practitioner qualifications (other than licensure) and other requirements such as specific training.
(B) Factors necessary for the coordination of such benefits with other items and services including those furnished in-person.
(C) Such other areas as determined by the Secretary.
(4) Enrollee choice
If an MA plan provides a service as an additional telehealth benefit (as defined in paragraph (2))—
(A) the MA plan shall also provide access to such benefit through an in-person visit (and not only as an additional telehealth benefit); and
(B) an individual enrollee shall have discretion as to whether to receive such service through the in-person visit or as an additional telehealth benefit.
(5) Treatment under MA
For purposes of this subsection and
(6) Construction
Nothing in this subsection shall be construed as affecting the requirement under subsection (a)(1) that MA plans provide enrollees with items and services (other than hospice care) for which benefits are available under parts A and B, including benefits available under
(n) Provision of information relating to the safe disposal of certain prescription drugs
(1) In general
In the case of an individual enrolled under an MA or MA–PD plan who is furnished an in-home health risk assessment on or after January 1, 2021, such plan shall ensure that such assessment includes information on the safe disposal of prescription drugs that are controlled substances that meets the criteria established under paragraph (2). Such information shall include information on drug takeback programs that meet such requirements determined appropriate by the Secretary and information on in-home disposal.
(2) Criteria
The Secretary shall, through rulemaking, establish criteria the Secretary determines appropriate with respect to information provided to an individual to ensure that such information sufficiently educates such individual on the safe disposal of prescription drugs that are controlled substances.
(Aug. 14, 1935, ch. 531, title XVIII, §1852, as added
Editorial Notes
References in Text
Section 2702 of the Public Health Service Act, referred to in subsec. (b)(1), is section 2702 of act July 1, 1944, which was classified to
The Employee Retirement Income Security Act of 1974, referred to in subsec. (j)(3)(C), is
Amendments
2022—Subsec. (a)(1)(B)(iv)(VII), (VIII).
2020—Subsec. (a)(1)(B)(iv)(IV), (V).
Subsec. (a)(1)(B)(iv)(VI).
Subsec. (a)(1)(B)(iv)(VII).
Subsec. (a)(1)(B)(v).
Subsec. (a)(1)(B)(vi).
2018—Subsec. (a)(1)(B)(i).
Subsec. (a)(3)(A).
Subsec. (a)(3)(D).
Subsec. (m).
Subsec. (n).
2016—Subsec. (a)(1)(B)(i).
Subsec. (b)(1).
2010—Subsec. (a)(1)(B)(i).
Subsec. (a)(1)(B)(iii) to (v).
2008—Subsec. (a)(7).
Subsec. (d)(4).
Subsec. (d)(4)(B).
Subsec. (d)(5).
Subsec. (d)(6).
Subsec. (e)(1).
Subsec. (e)(3)(A)(i).
Subsec. (e)(3)(A)(ii).
Subsec. (e)(3)(A)(iii).
Subsec. (e)(4)(C).
2003—Subsec. (a)(1).
"(A) those items and services (other than hospice care) for which benefits are available under parts A and B of this subchapter to individuals residing in the area served by the plan, and
"(B) additional benefits required under
Subsec. (a)(2)(C).
Subsec. (a)(3)(C).
Subsec. (a)(5).
Subsec. (a)(6).
Subsec. (b)(1)(A).
Subsec. (c)(1)(I).
Subsec. (d)(4).
Subsec. (d)(4)(B).
Subsec. (e).
Subsec. (e)(1).
Subsec. (e)(2).
Subsec. (e)(2)(A).
Subsec. (e)(2)(B).
Subsec. (e)(3).
Subsec. (e)(4)(B)(i).
Subsec. (e)(4)(B)(vii).
Subsec. (e)(5).
Subsec. (g)(5).
Subsec. (j)(4)(A).
Subsec. (j)(4)(A)(ii).
Subsec. (j)(4)(A)(iii).
Subsec. (j)(7).
Subsec. (k)(1).
2000—Subsec. (a)(2)(C).
Subsec. (a)(5).
Subsec. (a)(5)(A).
Subsec. (a)(5)(B).
Subsec. (e)(2)(A), (B).
Subsec. (e)(5).
Subsec. (g)(4).
Subsec. (l).
1999—Subsec. (a)(3)(A).
Subsec. (e)(2)(A).
Subsec. (e)(2)(B).
Subsec. (e)(2)(D).
Subsec. (e)(4).
Subsec. (g)(1)(B).
Subsec. (g)(3)(B)(ii).
Subsec. (h)(2).
Subsec. (k)(2)(C)(ii).
Statutory Notes and Related Subsidiaries
Change of Name
References to Medicare+Choice deemed to refer to Medicare Advantage or MA, subject to an appropriate transition provided by the Secretary of Health and Human Services in the use of those terms, see section 201 of
Effective Date of 2020 Amendment
Amendment by section 3713(c) of
Effective Date of 2016 Amendment
Amendment by section 17006(a)(2)(A) of
Amendment by section 17006(c)(1) of
Effective Date of 2010 Amendment
Effective Date of 2008 Amendment
Amendment by section 125(b)(6) of
Effective and Termination Dates of 2003 Amendment
Amendment by sections 221(d)(3) and 222(a)(2), (3), (h), (l)(1) of
Amendment by section 948(b)(2) of
Effective Date of 2000 Amendment
Amendment by section 1(a)(6) [title V, §521(b)] of
Effective Date of 1999 Amendment
Amendment by section 1000(a)(6) [title III, §321(k)(6)(B)] of
Implementation of 2020 Amendment
MedPAC Study
"(1)
"(A) on the scope of additional benefits provided under the Medicare+Choice program;
"(B) on the administrative and other costs incurred by Medicare+Choice organizations; and
"(C) on the contractual relationships between such organizations and skilled nursing facilities.
"(2)
Transitional Pass-Through of Additional Costs Under Medicare+Choice Program for 2000
1 See References in Text note below.
2 So in original. Probably should be "this".
§1395w–23. Payments to Medicare+Choice organizations
(a) Payments to organizations
(1) Monthly payments
(A) In general
Under a contract under
(i) Payment before 2006
For years before 2006, the payment amount shall be equal to 1/12 of the annual MA capitation rate (as calculated under subsection (c)(1)) with respect to that individual for that area, adjusted under subparagraph (C) and reduced by the amount of any reduction elected under
(ii) Payment for original fee-for-service benefits beginning with 2006
For years beginning with 2006, the amount specified in subparagraph (B).
(B) Payment amount for original fee-for-service benefits beginning with 2006
(i) Payment of bid for plans with bids below benchmark
In the case of a plan for which there are average per capita monthly savings described in
(ii) Payment of benchmark for plans with bids at or above benchmark
In the case of a plan for which there are no average per capita monthly savings described in
(iii) Payment of benchmark for MSA plans
Notwithstanding clauses (i) and (ii), in the case of an MSA plan, the amount specified in this subparagraph is equal to the MA area-specific non-drug monthly benchmark amount, adjusted under subparagraph (C).
(iv) Authority to apply frailty adjustment under PACE payment rules for certain specialized MA plans for special needs individuals
(I) In general
Notwithstanding the preceding provisions of this paragraph, for plan year 2011 and subsequent plan years, in the case of a plan described in subclause (II), the Secretary may apply the payment rules under
(II) Plan described
A plan described in this subclause is a specialized MA plan for special needs individuals described in
(C) Demographic adjustment, including adjustment for health status
(i) In general
Subject to subparagraph (I), the Secretary shall adjust the payment amount under subparagraph (A)(i) and the amount specified under subparagraph (B)(i), (B)(ii), and (B)(iii) for such risk factors as age, disability status, gender, institutional status, and such other factors as the Secretary determines to be appropriate, including adjustment for health status under paragraph (3), so as to ensure actuarial equivalence. The Secretary may add to, modify, or substitute for such adjustment factors if such changes will improve the determination of actuarial equivalence.
(ii) Application of coding adjustment
For 2006 and each subsequent year:
(I) In applying the adjustment under clause (i) for health status to payment amounts, the Secretary shall ensure that such adjustment reflects changes in treatment and coding practices in the fee-for-service sector and reflects differences in coding patterns between Medicare Advantage plans and providers under part 1 A and B to the extent that the Secretary has identified such differences.
(II) In order to ensure payment accuracy, the Secretary shall annually conduct an analysis of the differences described in subclause (I). The Secretary shall complete such analysis by a date necessary to ensure that the results of such analysis are incorporated on a timely basis into the risk scores for 2008 and subsequent years. In conducting such analysis, the Secretary shall use data submitted with respect to 2004 and subsequent years, as available and updated as appropriate.
(III) In calculating each year's adjustment, the adjustment factor shall be for 2014, not less than the adjustment factor applied for 2010, plus 1.5 percentage points; for each of years 2015 through 2018, not less than the adjustment factor applied for the previous year, plus 0.25 percentage point; and for 2019 and each subsequent year, not less than 5.9 percent.
(IV) Such adjustment shall be applied to risk scores until the Secretary implements risk adjustment using Medicare Advantage diagnostic, cost, and use data.
(iii) Improvements to risk adjustment for special needs individuals with chronic health conditions
(I) In general
For 2011 and subsequent years, for purposes of the adjustment under clause (i) with respect to individuals described in subclause (II), the Secretary shall use a risk score that reflects the known underlying risk profile and chronic health status of similar individuals. Such risk score shall be used instead of the default risk score for new enrollees in Medicare Advantage plans that are not specialized MA plans for special needs individuals (as defined in
(II) Individuals described
An individual described in this subclause is a special needs individual described in subsection (b)(6)(B)(iii) 2 who enrolls in a specialized MA plan for special needs individuals on or after January 1, 2011.
(III) Evaluation
For 2011 and periodically thereafter, the Secretary shall evaluate and revise the risk adjustment system under this subparagraph in order to, as accurately as possible, account for higher medical and care coordination costs associated with frailty, individuals with multiple, comorbid chronic conditions, and individuals with a diagnosis of mental illness, and also to account for costs that may be associated with higher concentrations of beneficiaries with those conditions.
(IV) Publication of evaluation and revisions
The Secretary shall publish, as part of an announcement under subsection (b), a description of any evaluation conducted under subclause (III) during the preceding year and any revisions made under such subclause as a result of such evaluation.
(D) Separate payment for Federal drug subsidies
In the case of an enrollee in an MA–PD plan, the MA organization offering such plan also receives—
(i) subsidies under
(ii) reimbursement for premium and cost-sharing reductions for low-income individuals under
(E) Payment of rebate for plans with bids below benchmark
In the case of a plan for which there are average per capita monthly savings described in
(F) Adjustment for intra-area variations
(i) Intra-regional variations
In the case of payment with respect to an MA regional plan for an MA region, the Secretary shall also adjust the amounts specified under subparagraphs (B)(i) and (B)(ii) in a manner to take into account variations in MA local payment rates under this part among the different MA local areas included in such region.
(ii) Intra-service area variations
In the case of payment with respect to an MA local plan for a service area that covers more than one MA local area, the Secretary shall also adjust the amounts specified under subparagraphs (B)(i) and (B)(ii) in a manner to take into account variations in MA local payment rates under this part among the different MA local areas included in such service area.
(G) Adjustment relating to risk adjustment
The Secretary shall adjust payments with respect to MA plans as necessary to ensure that—
(i) the sum of—
(I) the monthly payment made under subparagraph (A)(ii); and
(II) the MA monthly basic beneficiary premium under
(ii) the unadjusted MA statutory non-drug monthly bid amount, adjusted in the manner described in subparagraph (C) and, for an MA regional plan, subparagraph (F).
(H) Special rule for end-stage renal disease
The Secretary shall establish separate rates of payment to a Medicare+Choice organization with respect to classes of individuals determined to have end-stage renal disease and enrolled in a Medicare+Choice plan of the organization. Such rates of payment shall be actuarially equivalent to rates that would have been paid with respect to other enrollees in the MA payment area (or such other area as specified by the Secretary) under the provisions of this section as in effect before December 8, 2003. In accordance with regulations, the Secretary shall provide for the application of the seventh sentence of
(I) Improvements to risk adjustment for 2019 and subsequent years
(i) In general
In order to determine the appropriate adjustment for health status under subparagraph (C)(i), the following shall apply:
(I) Taking into account total number of diseases or conditions
The Secretary shall take into account the total number of diseases or conditions of an individual enrolled in an MA plan. The Secretary shall make an additional adjustment under such subparagraph as the number of diseases or conditions of an individual increases.
(II) Using at least 2 years of diagnostic data
The Secretary may use at least 2 years of diagnosis data.
(III) Providing separate adjustments for dual eligible individuals
With respect to individuals who are dually eligible for benefits under this subchapter and subchapter XIX, the Secretary shall make separate adjustments for each of the following:
(aa) Full-benefit dual eligible individuals (as defined in
(bb) Such individuals not described in item (aa).
(IV) Evaluation of mental health and substance use disorders
The Secretary shall evaluate the impact of including additional diagnosis codes related to mental health and substance use disorders in the risk adjustment model.
(V) Evaluation of chronic kidney disease
The Secretary shall evaluate the impact of including the severity of chronic kidney disease in the risk adjustment model.
(VI) Evaluation of payment rates for end-stage renal disease
The Secretary shall evaluate whether other factors (in addition to those described in subparagraph (H)) should be taken into consideration when computing payment rates under such subparagraph.
(ii) Phased-in implementation
The Secretary shall phase-in any changes to risk adjustment payment amounts under subparagraph (C)(i) under this subparagraph over a 3-year period, beginning with 2019, with such changes being fully implemented for 2022 and subsequent years.
(iii) Opportunity for review and public comment
The Secretary shall provide an opportunity for review of the proposed changes to such risk adjustment payment amounts under this subparagraph and a public comment period of not less than 60 days before implementing such changes.
(2) Adjustment to reflect number of enrollees
(A) In general
The amount of payment under this subsection may be retroactively adjusted to take into account any difference between the actual number of individuals enrolled with an organization under this part and the number of such individuals estimated to be so enrolled in determining the amount of the advance payment.
(B) Special rule for certain enrollees
(i) In general
Subject to clause (ii), the Secretary may make retroactive adjustments under subparagraph (A) to take into account individuals enrolled during the period beginning on the date on which the individual enrolls with a Medicare+Choice organization under a plan operated, sponsored, or contributed to by the individual's employer or former employer (or the employer or former employer of the individual's spouse) and ending on the date on which the individual is enrolled in the organization under this part, except that for purposes of making such retroactive adjustments under this subparagraph, such period may not exceed 90 days.
(ii) Exception
No adjustment may be made under clause (i) with respect to any individual who does not certify that the organization provided the individual with the disclosure statement described in
(3) Establishment of risk adjustment factors
(A) Report
The Secretary shall develop, and submit to Congress by not later than March 1, 1999, a report on the method of risk adjustment of payment rates under this section, to be implemented under subparagraph (C), that accounts for variations in per capita costs based on health status. Such report shall include an evaluation of such method by an outside, independent actuary of the actuarial soundness of the proposal.
(B) Data collection
In order to carry out this paragraph, the Secretary shall require Medicare+Choice organizations (and eligible organizations with risk-sharing contracts under
(C) Initial implementation
(i) In general
The Secretary shall first provide for implementation of a risk adjustment methodology that accounts for variations in per capita costs based on health status and other demographic factors for payments by no later than January 1, 2000.
(ii) Phase-in
Except as provided in clause (iv), such risk adjustment methodology shall be implemented in a phased-in manner so that the methodology insofar as it makes adjustments to capitation rates for health status applies to—
(I) 10 percent of 1/12 of the annual Medicare+Choice capitation rate in 2000 and each succeeding year through 2003;
(II) 30 percent of such capitation rate in 2004;
(III) 50 percent of such capitation rate in 2005;
(IV) 75 percent of such capitation rate in 2006; and
(V) 100 percent of such capitation rate in 2007 and succeeding years.
(iii) Data for risk adjustment methodology
Such risk adjustment methodology for 2004 and each succeeding year, shall be based on data from inpatient hospital and ambulatory settings.
(iv) Full implementation of risk adjustment for congestive heart failure enrollees for 2001
(I) Exemption from phase-in
Subject to subclause (II), the Secretary shall fully implement the risk adjustment methodology described in clause (i) with respect to each individual who has had a qualifying congestive heart failure inpatient diagnosis (as determined by the Secretary under such risk adjustment methodology) during the period beginning on July 1, 1999, and ending on June 30, 2000, and who is enrolled in a coordinated care plan that is the only coordinated care plan offered on January 1, 2001, in the service area of the individual.
(II) Period of application
Subclause (I) shall only apply during the 1-year period beginning on January 1, 2001.
(D) Uniform application to all types of plans
Subject to
(4) Payment rule for federally qualified health center services
If an individual who is enrolled with an MA plan under this part receives a service from a federally qualified health center that has a written agreement with the MA organization that offers such plan for providing such a service (including any agreement required under
(A) the Secretary shall pay the amount determined under
(B) the Secretary shall not reduce the amount of the monthly payments under this subsection as a result of the application of subparagraph (A).
(b) Annual announcement of payment rates
(1) Annual announcements
(A) For 2005
The Secretary shall determine, and shall announce (in a manner intended to provide notice to interested parties), not later than the second Monday in May of 2004, with respect to each MA payment area, the following:
(i) MA capitation rates
The annual MA capitation rate for each MA payment area for 2005.
(ii) Adjustment factors
The risk and other factors to be used in adjusting such rates under subsection (a)(1)(C) for payments for months in 2005.
(B) For 2006 and subsequent years
For a year after 2005—
(i) Initial announcement
The Secretary shall determine, and shall announce (in a manner intended to provide notice to interested parties), not later than the first Monday in April before the calendar year concerned, with respect to each MA payment area, the following:
(I) MA capitation rates; MA local area benchmark
The annual MA capitation rate for each MA payment area for the year.
(II) Adjustment factors
The risk and other factors to be used in adjusting such rates under subsection (a)(1)(C) for payments for months in such year.
(ii) Regional benchmark announcement
The Secretary shall determine, and shall announce (in a manner intended to provide notice to interested parties), on a timely basis before the calendar year concerned, with respect to each MA region and each MA regional plan for which a bid was submitted under
(iii) Benchmark announcement for CCA local areas
The Secretary shall determine, and shall announce (in a manner intended to provide notice to interested parties), on a timely basis before the calendar year concerned, with respect to each CCA area (as defined in section 1395w–29(b)(1)(A) 2 of this title), the CCA non-drug monthly benchmark amount under section 1395w–29(e)(1) 2 of this title for that area for the year involved.
(2) Advance notice of methodological changes
At least 45 days (or, in 2017 and each subsequent year, at least 60 days) before making the announcement under paragraph (1) for a year, the Secretary shall provide for notice to Medicare+Choice organizations of proposed changes to be made in the methodology from the methodology and assumptions used in the previous announcement and shall provide such organizations an opportunity (in 2017 and each subsequent year, of no less than 30 days) to comment on such proposed changes.
(3) Explanation of assumptions
In each announcement made under paragraph (1), the Secretary shall include an explanation of the assumptions and changes in methodology used in such announcement.
(4) Continued computation and publication of county-specific per capita fee-for-service expenditure information
The Secretary, through the Chief Actuary of the Centers for Medicare & Medicaid Services, shall provide for the computation and publication, on an annual basis beginning with 2001 at the time of publication of the annual Medicare+Choice capitation rates under paragraph (1), of the following information for the original medicare fee-for-service program under parts A and B (exclusive of individuals eligible for coverage under
(A) Total expenditures per capita per month, computed separately for part A and for part B.
(B) The expenditures described in subparagraph (A) reduced by the best estimate of the expenditures (such as graduate medical education and disproportionate share hospital payments) not related to the payment of claims.
(C) The average risk factor for the covered population based on diagnoses reported for medicare inpatient services, using the same methodology as is expected to be applied in making payments under subsection (a).
(D) Such average risk factor based on diagnoses for inpatient and other sites of service, using the same methodology as is expected to be applied in making payments under subsection (a).
(c) Calculation of annual Medicare+Choice capitation rates
(1) In general
For purposes of this part, subject to paragraphs (6)(C) and (7), each annual Medicare+Choice capitation rate, for a Medicare+Choice payment area that is an MA local area for a contract year consisting of a calendar year, is equal to the largest of the amounts specified in the following subparagraph (A), (B), (C), or (D):
(A) Blended capitation rate
For a year before 2005, the sum of—
(i) the area-specific percentage (as specified under paragraph (2) for the year) of the annual area-specific Medicare+Choice capitation rate for the Medicare+Choice payment area, as determined under paragraph (3) for the year, and
(ii) the national percentage (as specified under paragraph (2) for the year) of the input-price-adjusted annual national Medicare+Choice capitation rate, as determined under paragraph (4) for the year,
multiplied (for a year other than 2004) by the budget neutrality adjustment factor determined under paragraph (5).
(B) Minimum amount
12 multiplied by the following amount:
(i) For 1998, $367 (but not to exceed, in the case of an area outside the 50 States and the District of Columbia, 150 percent of the annual per capita rate of payment for 1997 determined under
(ii) For 1999 and 2000, the minimum amount determined under clause (i) or this clause, respectively, for the preceding year, increased by the national per capita Medicare+Choice growth percentage described in paragraph (6)(A) applicable to 1999 or 2000, respectively.
(iii)(I) Subject to subclause (II), for 2001, for any area in a Metropolitan Statistical Area with a population of more than 250,000, $525, and for any other area $475.
(II) In the case of an area outside the 50 States and the District of Columbia, the amount specified in this clause shall not exceed 120 percent of the amount determined under clause (ii) for such area for 2000.
(iv) For 2002, 2003, and 2004, the minimum amount specified in this clause (or clause (iii)) for the preceding year increased by the national per capita Medicare+Choice growth percentage, described in paragraph (6)(A) for that succeeding year.
(C) Minimum percentage increase
(i) For 1998, 102 percent of the annual per capita rate of payment for 1997 determined under
(ii) For 1999 and 2000, 102 percent of the annual Medicare+Choice capitation rate under this paragraph for the area for the previous year.
(iii) For 2001, 103 percent of the annual Medicare+Choice capitation rate under this paragraph for the area for 2000.
(iv) For 2002 and 2003, 102 percent of the annual Medicare+Choice capitation rate under this paragraph for the area for the previous year.
(v) For 2004 and each succeeding year, the greater of—
(I) 102 percent of the annual MA capitation rate under this paragraph for the area for the previous year; or
(II) the annual MA capitation rate under this paragraph for the area for the previous year increased by the national per capita MA growth percentage, described in paragraph (6) for that succeeding year, but not taking into account any adjustment under paragraph (6)(C) for a year before 2004.
(D) 100 percent of fee-for-service costs
(i) In general
For each year specified in clause (ii), the adjusted average per capita cost for the year involved, determined under
(ii) Periodic rebasing
The provisions of clause (i) shall apply for 2004 and for subsequent years as the Secretary shall specify (but not less than once every 3 years).
(iii) Inclusion of costs of VA and DOD military facility services to medicare-eligible beneficiaries
In determining the adjusted average per capita cost under clause (i) for a year, such cost shall be adjusted to include the Secretary's estimate, on a per capita basis, of the amount of additional payments that would have been made in the area involved under this subchapter if individuals entitled to benefits under this subchapter had not received services from facilities of the Department of Defense or the Department of Veterans Affairs.
(2) Area-specific and national percentages
For purposes of paragraph (1)(A)—
(A) for 1998, the "area-specific percentage" is 90 percent and the "national percentage" is 10 percent,
(B) for 1999, the "area-specific percentage" is 82 percent and the "national percentage" is 18 percent,
(C) for 2000, the "area-specific percentage" is 74 percent and the "national percentage" is 26 percent,
(D) for 2001, the "area-specific percentage" is 66 percent and the "national percentage" is 34 percent,
(E) for 2002, the "area-specific percentage" is 58 percent and the "national percentage" is 42 percent, and
(F) for a year after 2002, the "area-specific percentage" is 50 percent and the "national percentage" is 50 percent.
(3) Annual area-specific Medicare+Choice capitation rate
(A) In general
For purposes of paragraph (1)(A), subject to subparagraphs (B) and (E), the annual area-specific Medicare+Choice capitation rate for a Medicare+Choice payment area—
(i) for 1998 is, subject to subparagraph (D), the annual per capita rate of payment for 1997 determined under
(ii) for a subsequent year is the annual area-specific Medicare+Choice capitation rate for the previous year determined under this paragraph for the area, increased by the national per capita Medicare+Choice growth percentage for such subsequent year.
(B) Removal of medical education from calculation of adjusted average per capita cost
(i) In general
In determining the area-specific Medicare+Choice capitation rate under subparagraph (A) for a year (beginning with 1998), the annual per capita rate of payment for 1997 determined under
(ii) Applicable percent
For purposes of clause (i), the applicable percent for—
(I) 1998 is 20 percent,
(II) 1999 is 40 percent,
(III) 2000 is 60 percent,
(IV) 2001 is 80 percent, and
(V) a succeeding year is 100 percent.
(C) Payment adjustment
(i) In general
Subject to clause (ii), the payment adjustments described in this subparagraph are payment adjustments which the Secretary estimates were payable during 1997—
(I) for the indirect costs of medical education under
(II) for direct graduate medical education costs under
(ii) Treatment of payments covered under State hospital reimbursement system
To the extent that the Secretary estimates that an annual per capita rate of payment for 1997 described in clause (i) reflects payments to hospitals reimbursed under
(D) Treatment of areas with highly variable payment rates
In the case of a Medicare+Choice payment area for which the annual per capita rate of payment determined under
(E) Inclusion of costs of DOD and VA military facility services to Medicare-eligible beneficiaries
In determining the area-specific MA capitation rate under subparagraph (A) for a year (beginning with 2004), the annual per capita rate of payment for 1997 determined under
(4) Input-price-adjusted annual national Medicare+Choice capitation rate
(A) In general
For purposes of paragraph (1)(A), the input-price-adjusted annual national Medicare+Choice capitation rate for a Medicare+Choice payment area for a year is equal to the sum, for all the types of medicare services (as classified by the Secretary), of the product (for each such type of service) of—
(i) the national standardized annual Medicare+Choice capitation rate (determined under subparagraph (B)) for the year,
(ii) the proportion of such rate for the year which is attributable to such type of services, and
(iii) an index that reflects (for that year and that type of services) the relative input price of such services in the area compared to the national average input price of such services.
In applying clause (iii), the Secretary may, subject to subparagraph (C), apply those indices under this subchapter that are used in applying (or updating) national payment rates for specific areas and localities.
(B) National standardized annual Medicare+Choice capitation rate
In subparagraph (A)(i), the "national standardized annual Medicare+Choice capitation rate" for a year is equal to—
(i) the sum (for all Medicare+Choice payment areas) of the product of—
(I) the annual area-specific Medicare+Choice capitation rate for that year for the area under paragraph (3), and
(II) the average number of medicare beneficiaries residing in that area in the year, multiplied by the average of the risk factor weights used to adjust payments under subsection (a)(1)(A) for such beneficiaries in such area; divided by
(ii) the sum of the products described in clause (i)(II) for all areas for that year.
(C) Special rules for 1998
In applying this paragraph for 1998—
(i) medicare services shall be divided into 2 types of services: part A services and part B services;
(ii) the proportions described in subparagraph (A)(ii)—
(I) for part A services shall be the ratio (expressed as a percentage) of the national average annual per capita rate of payment for part A for 1997 to the total national average annual per capita rate of payment for parts A and B for 1997, and
(II) for part B services shall be 100 percent minus the ratio described in subclause (I);
(iii) for part A services, 70 percent of payments attributable to such services shall be adjusted by the index used under
(iv) for part B services—
(I) 66 percent of payments attributable to such services shall be adjusted by the index of the geographic area factors under
(II) of the remaining 34 percent of the amount of such payments, 40 percent shall be adjusted by the index described in clause (iii); and
(v) the index values shall be computed based only on the beneficiary population who are 65 years of age or older and who are not determined to have end stage renal disease.
The Secretary may continue to apply the rules described in this subparagraph (or similar rules) for 1999.
(5) Payment adjustment budget neutrality factor
For purposes of paragraph (1)(A), for each year (other than 2004), the Secretary shall determine a budget neutrality adjustment factor so that the aggregate of the payments under this part (other than those attributable to subsections (a)(3)(C)(iv), (a)(4), and (i)) shall equal the aggregate payments that would have been made under this part if payment were based entirely on area-specific capitation rates.
(6) "National per capita Medicare+Choice growth percentage" defined
(A) In general
In this part, the "national per capita Medicare+Choice growth percentage" for a year is the percentage determined by the Secretary, by March 1st before the beginning of the year involved, to reflect the Secretary's estimate of the projected per capita rate of growth in expenditures under this subchapter for an individual entitled to benefits under part A and enrolled under part B, excluding expenditures attributable to subsections (a)(7) and (o) of
(B) Adjustment
The number of percentage points specified in this subparagraph is—
(i) for 1998, 0.8 percentage points,
(ii) for 1999, 0.5 percentage points,
(iii) for 2000, 0.5 percentage points,
(iv) for 2001, 0.5 percentage points,
(v) for 2002, 0.3 percentage points, and
(vi) for a year after 2002, 0 percentage points.
(C) Adjustment for over or under projection of national per capita Medicare+Choice growth percentage
Beginning with rates calculated for 1999, before computing rates for a year as described in paragraph (1), the Secretary shall adjust all area-specific and national Medicare+Choice capitation rates (and beginning in 2000, the minimum amount) for the previous year for the differences between the projections of the national per capita Medicare+Choice growth percentage for that year and previous years and the current estimate of such percentage for such years, except that for purposes of paragraph (1)(C)(v)(II), no such adjustment shall be made for a year before 2004.
(7) Adjustment for national coverage determinations and legislative changes in benefits
If the Secretary makes a determination with respect to coverage under this subchapter or there is a change in benefits required to be provided under this part that the Secretary projects will result in a significant increase in the costs to Medicare+Choice of providing benefits under contracts under this part (for periods after any period described in
(d) MA payment area; MA local area; MA region defined
(1) MA payment area
In this part, except as provided in this subsection, the term "MA payment area" means—
(A) with respect to an MA local plan, an MA local area (as defined in paragraph (2)); and
(B) with respect to an MA regional plan, an MA region (as established under
(2) MA local area
The term "MA local area" means a county or equivalent area specified by the Secretary.
(3) Rule for ESRD beneficiaries
In the case of individuals who are determined to have end stage renal disease, the Medicare+Choice payment area shall be a State or such other payment area as the Secretary specifies.
(4) Geographic adjustment
(A) In general
Upon written request of the chief executive officer of a State for a contract year (beginning after 1998) made by not later than February 1 of the previous year, the Secretary shall make a geographic adjustment to a Medicare+Choice payment area in the State otherwise determined under paragraph (1) for MA local plans—
(i) to a single statewide Medicare+Choice payment area,
(ii) to the metropolitan based system described in subparagraph (C), or
(iii) to consolidating into a single Medicare+Choice payment area noncontiguous counties (or equivalent areas described in paragraph (1)(A)) within a State.
Such adjustment shall be effective for payments for months beginning with January of the year following the year in which the request is received.
(B) Budget neutrality adjustment
In the case of a State requesting an adjustment under this paragraph, the Secretary shall initially (and annually thereafter) adjust the payment rates otherwise established under this section with respect to MA local plans for Medicare+Choice payment areas in the State in a manner so that the aggregate of the payments under this section for such plans in the State shall not exceed the aggregate payments that would have been made under this section for such plans for Medicare+Choice payment areas in the State in the absence of the adjustment under this paragraph.
(C) Metropolitan based system
The metropolitan based system described in this subparagraph is one in which—
(i) all the portions of each metropolitan statistical area in the State or in the case of a consolidated metropolitan statistical area, all of the portions of each primary metropolitan statistical area within the consolidated area within the State, are treated as a single Medicare+Choice payment area, and
(ii) all areas in the State that do not fall within a metropolitan statistical area are treated as a single Medicare+Choice payment area.
(D) Areas
In subparagraph (C), the terms "metropolitan statistical area", "consolidated metropolitan statistical area", and "primary metropolitan statistical area" mean any area designated as such by the Secretary of Commerce.
(e) Special rules for individuals electing MSA plans
(1) In general
If the amount of the Medicare+Choice monthly MSA premium (as defined in
(2) Establishment and designation of Medicare+Choice medical savings account as requirement for payment of contribution
In the case of an individual who has elected coverage under an MSA plan, no payment shall be made under paragraph (1) on behalf of an individual for a month unless the individual—
(A) has established before the beginning of the month (or by such other deadline as the Secretary may specify) a Medicare+Choice MSA (as defined in section 138(b)(2) of the Internal Revenue Code of 1986), and
(B) if the individual has established more than one such Medicare+Choice MSA, has designated one of such accounts as the individual's Medicare+Choice MSA for purposes of this part.
Under rules under this section, such an individual may change the designation of such account under subparagraph (B) for purposes of this part.
(3) Lump-sum deposit of medical savings account contribution
In the case of an individual electing an MSA plan effective beginning with a month in a year, the amount of the contribution to the Medicare+Choice MSA on behalf of the individual for that month and all successive months in the year shall be deposited during that first month. In the case of a termination of such an election as of a month before the end of a year, the Secretary shall provide for a procedure for the recovery of deposits attributable to the remaining months in the year.
(f) Payments from Trust Funds
The payment to a Medicare+Choice organization under this section for individuals enrolled under this part with the organization and for payments under subsection (l) and subsection (m) and payments to a Medicare+Choice MSA under subsection (e)(1) shall be made from the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund in such proportion as the Secretary determines reflects the relative weight that benefits under part A and under part B represents of the actuarial value of the total benefits under this subchapter. Payments to MA organizations for statutory drug benefits provided under this subchapter are made from the Medicare Prescription Drug Account in the Federal Supplementary Medical Insurance Trust Fund. Monthly payments otherwise payable under this section for October 2000 shall be paid on the first business day of such month. Monthly payments otherwise payable under this section for October 2001 shall be paid on the last business day of September 2001. Monthly payments otherwise payable under this section for October 2006 shall be paid on the first business day of October 2006.
(g) Special rule for certain inpatient hospital stays
In the case of an individual who is receiving inpatient hospital services from a subsection (d) hospital (as defined in
(1) election under this part of a Medicare+Choice plan offered by a Medicare+Choice organization—
(A) payment for such services until the date of the individual's discharge shall be made under this subchapter through the Medicare+Choice plan or the original medicare fee-for-service program option described in
(B) the elected organization shall not be financially responsible for payment for such services until the date after the date of the individual's discharge, and
(C) the organization shall nonetheless be paid the full amount otherwise payable to the organization under this part; or
(2) termination of election with respect to a Medicare+Choice organization under this part—
(A) the organization shall be financially responsible for payment for such services after such date and until the date of the individual's discharge,
(B) payment for such services during the stay shall not be made under
(C) the terminated organization shall not receive any payment with respect to the individual under this part during the period the individual is not enrolled.
(h) Special rule for hospice care
(1) Information
A contract under this part shall require the Medicare+Choice organization to inform each individual enrolled under this part with a Medicare+Choice plan offered by the organization about the availability of hospice care if—
(A) a hospice program participating under this subchapter is located within the organization's service area; or
(B) it is common practice to refer patients to hospice programs outside such service area.
(2) Payment
If an individual who is enrolled with a Medicare+Choice organization under this part makes an election under
(A) payment for the hospice care furnished to the individual shall be made to the hospice program elected by the individual by the Secretary;
(B) payment for other services for which the individual is eligible notwithstanding the individual's election of hospice care under
(C) the Secretary shall continue to make monthly payments to the Medicare+Choice organization in an amount equal to the value of the additional benefits required under
(i) New entry bonus
(1) In general
Subject to paragraphs (2) and (3), in the case of Medicare+Choice payment area in which a Medicare+Choice plan has not been offered since 1997 (or in which all organizations that offered a plan since such date have filed notice with the Secretary, as of October 13, 1999, that they will not be offering such a plan as of January 1, 2000, or filed notice with the Secretary as of October 3, 2000, that they will not be offering such a plan as of January 1, 2001), the amount of the monthly payment otherwise made under this section shall be increased—
(A) only for the first 12 months in which any Medicare+Choice plan is offered in the area, by 5 percent of the total monthly payment otherwise computed for such payment area; and
(B) only for the subsequent 12 months, by 3 percent of the total monthly payment otherwise computed for such payment area.
(2) Period of application
Paragraph (1) shall only apply to payment for Medicare+Choice plans which are first offered in a Medicare+Choice payment area during the 2-year period beginning on January 1, 2000.
(3) Limitation to organization offering first plan in an area
Paragraph (1) shall only apply to payment to the first Medicare+Choice organization that offers a Medicare+Choice plan in each Medicare+Choice payment area, except that if more than one such organization first offers such a plan in an area on the same date, paragraph (1) shall apply to payment for such organizations.
(4) Construction
Nothing in paragraph (1) shall be construed as affecting the calculation of the annual Medicare+Choice capitation rate under subsection (c) for any payment area or as applying to payment for any period not described in such paragraph and paragraph (2).
(5) Offered defined
In this subsection, the term "offered" means, with respect to a Medicare+Choice plan as of a date, that a Medicare+Choice eligible individual may enroll with the plan on that date, regardless of when the enrollment takes effect or when the individual obtains benefits under the plan.
(j) Computation of benchmark amounts
For purposes of this part, subject to subsection (o), the term "MA area-specific non-drug monthly benchmark amount" means for a month in a year—
(1) with respect to—
(A) a service area that is entirely within an MA local area, subject to section 1395w–29(d)(2)(A) 2 of this title, an amount equal to 1/12 of the annual MA capitation rate under subsection (c)(1) for the area for the year (or, for 2007, 2008, 2009, and 2010, 1/12 of the applicable amount determined under subsection (k)(1) for the area for the year; for 2011, 1/12 of the applicable amount determined under subsection (k)(1) for the area for 2010; and, beginning with 2012, 1/12 of the blended benchmark amount determined under subsection (n)(1) for the area for the year), adjusted as appropriate (for years before 2007) for the purpose of risk adjustment; or
(B) a service area that includes more than one MA local area, an amount equal to the average of the amounts described in subparagraph (A) for each such local MA area, weighted by the projected number of enrollees in the plan residing in the respective local MA areas (as used by the plan for purposes of the bid and disclosed to the Secretary under
(2) with respect to an MA region for a month in a year, the MA region-specific non-drug monthly benchmark amount, as defined in
(k) Determination of applicable amount for purposes of calculating the benchmark amounts
(1) Applicable amount defined
For purposes of subsection (j), subject to paragraphs (2), (4), and (5), the term "applicable amount" means for an area—
(A) for 2007—
(i) if such year is not specified under subsection (c)(1)(D)(ii), an amount equal to the amount specified in subsection (c)(1)(C) for the area for 2006—
(I) first adjusted by the rescaling factor for 2006 for the area (as made available by the Secretary in the announcement of the rates on April 4, 2005, under subsection (b)(1), but excluding any national adjustment factors for coding intensity and risk adjustment budget neutrality that were included in such factor); and
(II) then increased by the national per capita MA growth percentage, described in subsection (c)(6) for 2007, but not taking into account any adjustment under subparagraph (C) of such subsection for a year before 2004;
(ii) if such year is specified under subsection (c)(1)(D)(ii), an amount equal to the greater of—
(I) the amount determined under clause (i) for the area for the year; or
(II) the amount specified in subsection (c)(1)(D) for the area for the year; and
(B) for a subsequent year—
(i) if such year is not specified under subsection (c)(1)(D)(ii), an amount equal to the amount determined under this paragraph for the area for the previous year (determined without regard to paragraphs (2), (4), and (5)), increased by the national per capita MA growth percentage, described in subsection (c)(6) for that succeeding year, but not taking into account any adjustment under subparagraph (C) of such subsection for a year before 2004; and
(ii) if such year is specified under subsection (c)(1)(D)(ii), an amount equal to the greater of—
(I) the amount determined under clause (i) for the area for the year; or
(II) the amount specified in subsection (c)(1)(D) for the area for the year.
(2) Phase-out of budget neutrality factor
(A) In general
Except as provided in subparagraph (D), in the case of 2007 through 2010, the applicable amount determined under paragraph (1) shall be multiplied by a factor equal to 1 plus the product of—
(i) the percent determined under subparagraph (B) for the year; and
(ii) the applicable phase-out factor for the year under subparagraph (C).
(B) Percent determined
(i) In general
For purposes of subparagraph (A)(i), subject to clause (iv), the percent determined under this subparagraph for a year is a percent equal to a fraction the numerator of which is described in clause (ii) and the denominator of which is described in clause (iii).
(ii) Numerator based on difference between demographic rate and risk rate
(I) In general
The numerator described in this clause is an amount equal to the amount by which the demographic rate described in subclause (II) exceeds the risk rate described in subclause (III).
(II) Demographic rate
The demographic rate described in this subclause is the Secretary's estimate of the total payments that would have been made under this part in the year if all the monthly payment amounts for all MA plans were equal to 1/12 of the annual MA capitation rate under subsection (c)(1) for the area and year, adjusted pursuant to subsection (a)(1)(C).
(III) Risk rate
The risk rate described in this subclause is the Secretary's estimate of the total payments that would have been made under this part in the year if all the monthly payment amounts for all MA plans were equal to the amount described in subsection (j)(1)(A) (determined as if this paragraph had not applied) under subsection (j) for the area and year, adjusted pursuant to subsection (a)(1)(C).
(iii) Denominator based on risk rate
The denominator described in this clause is equal to the total amount estimated for the year under clause (ii)(III).
(iv) Requirements
In estimating the amounts under the previous clauses, the Secretary shall—
(I) use a complete set of the most recent and representative Medicare Advantage risk scores under subsection (a)(3) that are available from the risk adjustment model announced for the year;
(II) adjust the risk scores to reflect changes in treatment and coding practices in the fee-for-service sector;
(III) adjust the risk scores for differences in coding patterns between Medicare Advantage plans and providers under the original Medicare fee-for-service program under parts A and B to the extent that the Secretary has identified such differences, as required in subsection (a)(1)(C);
(IV) as necessary, adjust the risk scores for late data submitted by Medicare Advantage organizations;
(V) as necessary, adjust the risk scores for lagged cohorts; and
(VI) as necessary, adjust the risk scores for changes in enrollment in Medicare Advantage plans during the year.
(v) Authority
In computing such amounts the Secretary may take into account the estimated health risk of enrollees in preferred provider organization plans (including MA regional plans) for the year.
(C) Applicable phase-out factor
For purposes of subparagraph (A)(ii), the term "applicable phase-out factor" means—
(i) for 2007, 0.55;
(ii) for 2008, 0.40;
(iii) for 2009, 0.25; and
(iv) for 2010, 0.05.
(D) Termination of application
Subparagraph (A) shall not apply in a year if the amount estimated under subparagraph (B)(ii)(III) for the year is equal to or greater than the amount estimated under subparagraph (B)(ii)(II) for the year.
(3) No revision in percent
(A) In general
The Secretary may not make any adjustment to the percent determined under paragraph (2)(B) for any year.
(B) Rule of construction
Nothing in this subsection shall be construed to limit the authority of the Secretary to make adjustments to the applicable amounts determined under paragraph (1) as appropriate for purposes of updating data or for purposes of adopting an improved risk adjustment methodology.
(4) Phase-out of the indirect costs of medical education from capitation rates
(A) In general
After determining the applicable amount for an area for a year under paragraph (1) (beginning with 2010), the Secretary shall adjust such applicable amount to exclude from such applicable amount the phase-in percentage (as defined in subparagraph (B)(i)) for the year of the Secretary's estimate of the standardized costs for payments under
(B) Percentages defined
For purposes of this paragraph:
(i) Phase-in percentage
The term "phase-in percentage" means, for an area for a year, the ratio (expressed as a percentage, but in no case greater than 100 percent) of—
(I) the maximum cumulative adjustment percentage for the year (as defined in clause (ii)); to
(II) the standardized IME cost percentage (as defined in clause (iii)) for the area and year.
(ii) Maximum cumulative adjustment percentage
The term "maximum cumulative adjustment percentage" means, for—
(I) 2010, 0.60 percent; and
(II) a subsequent year, the maximum cumulative adjustment percentage for the previous year increased by 0.60 percentage points.
(iii) Standardized IME cost percentage
The term "standardized IME cost percentage" means, for an area for a year, the per capita costs for payments under
(C) Fee-for-service amount
The fee-for-service amount specified in this subparagraph for an area for a year is the amount specified under subsection (c)(1)(D) for the area and the year.
(5) Exclusion of costs for kidney acquisitions from capitation rates
After determining the applicable amount for an area for a year under paragraph (1) (beginning with 2021), the Secretary shall adjust such applicable amount to exclude from such applicable amount the Secretary's estimate of the standardized costs for payments for organ acquisitions for kidney transplants covered under this subchapter (including expenses covered under
(l) Application of eligible professional incentives for certain MA organizations for adoption and meaningful use of certified EHR technology
(1) In general
Subject to paragraphs (3) and (4), in the case of a qualifying MA organization, the provisions of
(2) Eligible professional described
With respect to a qualifying MA organization, an eligible professional described in this paragraph is an eligible professional (as defined for purposes of
(A)(i) is employed by the organization; or
(ii)(I) is employed by, or is a partner of, an entity that through contract with the organization furnishes at least 80 percent of the entity's Medicare patient care services to enrollees of such organization; and
(II) furnishes at least 80 percent of the professional services of the eligible professional covered under this subchapter to enrollees of the organization; and
(B) furnishes, on average, at least 20 hours per week of patient care services.
(3) Eligible professional incentive payments
(A) In general
In applying
(B) Avoiding duplication of payments
(i) In general
In the case of an eligible professional described in paragraph (2)—
(I) that is eligible for the maximum incentive payment under
(II) that is eligible for less than such maximum incentive payment for the same payment period, the payment incentive shall be made only under this subsection and not under
(ii) Methods
In the case of an eligible professional described in paragraph (2) who is eligible for an incentive payment under
(I) to ensure that duplicate payments are not made with respect to an eligible professional both under this subsection and under
(II) to collect data from Medicare Advantage organizations to ensure against such duplicate payments.
(C) Fixed schedule for application of limitation on incentive payments for all eligible professionals
In applying
(4) Payment adjustment
(A) In general
In applying
(B) Specified percent
The percent specified under this subparagraph for a year is 100 percent minus a number of percentage points equal to the product of—
(i) the number of percentage points by which the applicable percent (under
(ii) the Medicare physician expenditure proportion specified in subparagraph (C) for the year.
(C) Medicare physician expenditure proportion
The Medicare physician expenditure proportion under this subparagraph for a year is the Secretary's estimate of the proportion, of the expenditures under parts A and B that are not attributable to this part, that are attributable to expenditures for physicians' services.
(D) Application of payment adjustment
In the case that a qualifying MA organization attests that not all eligible professionals of the organization are meaningful EHR users with respect to a year, the Secretary shall apply the payment adjustment under this paragraph based on the proportion of all such eligible professionals of the organization that are not meaningful EHR users for such year.
(5) Qualifying MA organization defined
In this subsection and subsection (m), the term "qualifying MA organization" means a Medicare Advantage organization that is organized as a health maintenance organization (as defined in
(6) Meaningful EHR user attestation
For purposes of this subsection and subsection (m), a qualifying MA organization shall submit an attestation, in a form and manner specified by the Secretary which may include the submission of such attestation as part of submission of the initial bid under section 1395w–24(a)(1)(A)(iv) 4 of this title, identifying—
(A) whether each eligible professional described in paragraph (2), with respect to such organization is a meaningful EHR user (as defined in
(B) whether each eligible hospital described in subsection (m)(1),5 with respect to such organization, is a meaningful EHR user (as defined in
(7) Posting on website
The Secretary shall post on the Internet website of the Centers for Medicare & Medicaid Services, in an easily understandable format, a list of the names, business addresses, and business phone numbers of—
(A) each qualifying MA organization receiving an incentive payment under this subsection for eligible professionals of the organization; and
(B) the eligible professionals of such organization for which such incentive payment is based.
(8) Limitation on review
There shall be no administrative or judicial review under
(A) the methodology and standards for determining payment amounts and payment adjustments under this subsection, including avoiding duplication of payments under paragraph (3)(B) and the specification of rules for the fixed schedule for application of limitation on incentive payments for all eligible professionals under paragraph (3)(C);
(B) the methodology and standards for determining eligible professionals under paragraph (2); and
(C) the methodology and standards for determining a meaningful EHR user under
(m) Application of eligible hospital incentives for certain MA organizations for adoption and meaningful use of certified EHR technology
(1) Application
Subject to paragraphs (3) and (4), in the case of a qualifying MA organization, the provisions of
(2) Eligible hospital described
With respect to a qualifying MA organization, an eligible hospital described in this paragraph is an eligible hospital (as defined in
(3) Eligible hospital incentive payments
(A) In general
In applying
(i) shall, insofar as data to determine the discharge related amount under
(ii) shall, insofar as data to determine the medicare share described in
(B) Avoiding duplication of payments
(i) In general
In the case of a hospital that for a payment year is an eligible hospital described in paragraph (2) and for which at least one-third of their discharges (or bed-days) of Medicare patients for the year are covered under part A, payment for the payment year shall be made only under
(ii) Methods
In the case of a hospital that is an eligible hospital described in paragraph (2) and also is eligible for an incentive payment under
(I) to ensure that duplicate payments are not made with respect to an eligible hospital both under this subsection and under
(II) to collect data from Medicare Advantage organizations to ensure against such duplicate payments.
(4) Payment adjustment
(A) Subject to paragraph (3), in the case of a qualifying MA organization (as defined in subsection (l)(5)), if, according to the attestation of the organization submitted under subsection (l)(6) for an applicable period, one or more eligible hospitals (as defined in
(B)
(i) the number of the percentage point reduction effected under
(ii) the Medicare hospital expenditure proportion specified in subparagraph (C) for the year.
(C)
(D)
(5) Posting on website
The Secretary shall post on the Internet website of the Centers for Medicare & Medicaid Services, in an easily understandable format—
(A) a list of the names, business addresses, and business phone numbers of each qualifying MA organization receiving an incentive payment under this subsection for eligible hospitals described in paragraph (2); and
(B) a list of the names of the eligible hospitals for which such incentive payment is based.
(6) Limitations on review
There shall be no administrative or judicial review under
(A) the methodology and standards for determining payment amounts and payment adjustments under this subsection, including avoiding duplication of payments under paragraph (3)(B);
(B) the methodology and standards for determining eligible hospitals under paragraph (2); and
(C) the methodology and standards for determining a meaningful EHR user under
(n) Determination of blended benchmark amount
(1) In general
For purposes of subsection (j), subject to paragraphs (3), (4), and (5), the term "blended benchmark amount" means for an area—
(A) for 2012 the sum of—
(i) ½ of the applicable amount for the area and year; and
(ii) ½ of the amount specified in paragraph (2)(A) for the area and year; and
(B) for a subsequent year the amount specified in paragraph (2)(A) for the area and year.
(2) Specified amount
(A) In general
The amount specified in this subparagraph for an area and year is the product of—
(i) the base payment amount specified in subparagraph (E) for the area and year adjusted to take into account the phase-out in the indirect costs of medical education from capitation rates described in subsection (k)(4) and, for 2021 and subsequent years, the exclusion of payments for organ acquisitions for kidney transplants from the capitation rate as described in subsection (k)(5); and
(ii) the applicable percentage for the area for the year specified under subparagraph (B).
(B) Applicable percentage
Subject to subparagraph (D), the applicable percentage specified in this subparagraph for an area for a year in the case of an area that is ranked—
(i) in the highest quartile under subparagraph (C) for the previous year is 95 percent;
(ii) in the second highest quartile under such subparagraph for the previous year is 100 percent;
(iii) in the third highest quartile under such subparagraph for the previous year is 107.5 percent; or
(iv) in the lowest quartile under such subparagraph for the previous year is 115 percent.
(C) Periodic ranking
For purposes of this paragraph in the case of an area located—
(i) in 1 of the 50 States or the District of Columbia, the Secretary shall rank such area in each year specified under subsection (c)(1)(D)(ii) based upon the level of the amount specified in subparagraph (A)(i) for such areas; or
(ii) in a territory, the Secretary shall rank such areas in each such year based upon the level of the amount specified in subparagraph (A)(i) for such area relative to quartile rankings computed under clause (i).
(D) 1-year transition for changes in applicable percentage
If, for a year after 2012, there is a change in the quartile in which an area is ranked compared to the previous year, the applicable percentage for the area in the year shall be the average of—
(i) the applicable percentage for the area for the previous year; and
(ii) the applicable percentage that would otherwise apply for the area for the year.
(E) Base payment amount
Subject to subparagraphs (F) and (G), the base payment amount specified in this subparagraph—
(i) for 2012 is the amount specified in subsection (c)(1)(D) for the area for the year; or
(ii) for a subsequent year that—
(I) is not specified under subsection (c)(1)(D)(ii), is the base amount specified in this subparagraph for the area for the previous year, increased by the national per capita MA growth percentage, described in subsection (c)(6) for that succeeding year, but not taking into account any adjustment under subparagraph (C) of such subsection for a year before 2004; and
(II) is specified under subsection (c)(1)(D)(ii), is the amount specified in subsection (c)(1)(D) for the area for the year.
(F) Application of indirect medical education phase-out
The base payment amount specified in subparagraph (E) for a year shall be adjusted in the same manner under paragraph (4) of subsection (k) as the applicable amount is adjusted under such subsection.
(G) Application of kidney acquisitions adjustment
The base payment amount specified in subparagraph (E) for a year (beginning with 2021) shall be adjusted in the same manner under paragraph (5) of subsection (k) as the applicable amount is adjusted under such subsection.
(3) Alternative phase-ins
(A) 4-year phase-in for certain areas
If the difference between the applicable amount (as defined in subsection (k)) for an area for 2010 and the projected 2010 benchmark amount (as defined in subparagraph (C)) for the area is at least $30 but less than $50, the blended benchmark amount for the area is—
(i) for 2012 the sum of—
(I) ¾ of the applicable amount for the area and year; and
(II) ¼ of the amount specified in paragraph (2)(A) for the area and year;
(ii) for 2013 the sum of—
(I) ½ of the applicable amount for the area and year; and
(II) ½ of the amount specified in paragraph (2)(A) for the area and year;
(iii) for 2014 the sum of—
(I) ¼ of the applicable amount for the area and year; and
(II) ¾ of the amount specified in paragraph (2)(A) for the area and year; and
(iv) for a subsequent year the amount specified in paragraph (2)(A) for the area and year.
(B) 6-year phase-in for certain areas
If the difference between the applicable amount (as defined in subsection (k)) for an area for 2010 and the projected 2010 benchmark amount (as defined in subparagraph (C)) for the area is at least $50, the blended benchmark amount for the area is—
(i) for 2012 the sum of—
(I) 5/6 of the applicable amount for the area and year; and
(II) 1/6 of the amount specified in paragraph (2)(A) for the area and year;
(ii) for 2013 the sum of—
(I) 2/3 of the applicable amount for the area and year; and
(II) 1/3 of the amount specified in paragraph (2)(A) for the area and year;
(iii) for 2014 the sum of—
(I) ½ of the applicable amount for the area and year; and
(II) ½ of the amount specified in paragraph (2)(A) for the area and year;
(iv) for 2015 the sum of—
(I) 1/3 of the applicable amount for the area and year; and
(II) 2/3 of the amount specified in paragraph (2)(A) for the area and year; and
(v) for 2016 the sum of—
(I) 1/6 of the applicable amount for the area and year; and
(II) 5/6 of the amount specified in paragraph (2)(A) for the area and year; and
(vi) for a subsequent year the amount specified in paragraph (2)(A) for the area and year.
(C) Projected 2010 benchmark amount
The projected 2010 benchmark amount described in this subparagraph for an area is equal to the sum of—
(i) ½ of the applicable amount (as defined in subsection (k)) for the area for 2010; and
(ii) ½ of the amount specified in paragraph (2)(A) for the area for 2010 but determined as if there were substituted for the applicable percentage specified in clause (ii) of such paragraph the sum of—
(I) the applicable percent that would be specified under subparagraph (B) of paragraph (2) (determined without regard to subparagraph (D) of such paragraph) for the area for 2010 if any reference in such paragraph to "the previous year" were deemed a reference to 2010; and
(II) the applicable percentage increase that would apply to a qualifying plan in the area under subsection (o) as if any reference in such subsection to 2012 were deemed a reference to 2010 and as if the determination of a qualifying county under paragraph (3)(B) of such subsection were made for 2010.
(4) Cap on benchmark amount
In no case shall the blended benchmark amount for an area for a year (determined taking into account subsection (o)) be greater than the applicable amount that would (but for the application of this subsection) be determined under subsection (k)(1) for the area for the year.
(5) Non-application to PACE plans
This subsection shall not apply to payments to a PACE program under
(o) Applicable percentage quality increases
(1) In general
Subject to the succeeding paragraphs, in the case of a qualifying plan with respect to a year beginning with 2012, the applicable percentage under subsection (n)(2)(B) shall be increased on a plan or contract level, as determined by the Secretary—
(A) for 2012, by 1.5 percentage points;
(B) for 2013, by 3.0 percentage points; and
(C) for 2014 or a subsequent year, by 5.0 percentage points.
(2) Increase for qualifying plans in qualifying counties
The increase applied under paragraph (1) for a qualifying plan located in a qualifying county for a year shall be doubled.
(3) Qualifying plans and qualifying county defined; application of increases to low enrollment and new plans
For purposes of this subsection:
(A) Qualifying plan
(i) In general
The term "qualifying plan" means, for a year and subject to paragraph (4), a plan that had a quality rating under paragraph (4) of 4 stars or higher based on the most recent data available for such year.
(ii) Application of increases to low enrollment plans
(I) 2012
For 2012, the term "qualifying plan" includes an MA plan that the Secretary determines is not able to have a quality rating under paragraph (4) because of low enrollment.
(II) 2013 and subsequent years
For 2013 and subsequent years, for purposes of determining whether an MA plan with low enrollment (as defined by the Secretary) is included as a qualifying plan, the Secretary shall establish a method to apply to MA plans with low enrollment (as defined by the Secretary) the computation of quality rating and the rating system under paragraph (4).
(iii) Application of increases to new plans
(I) In general
A new MA plan that meets criteria specified by the Secretary shall be treated as a qualifying plan, except that in applying paragraph (1), the applicable percentage under subsection (n)(2)(B) shall be increased—
(aa) for 2012, by 1.5 percentage points;
(bb) for 2013, by 2.5 percentage points; and
(cc) for 2014 or a subsequent year, by 3.5 percentage points.
(II) New MA plan defined
The term "new MA plan" means, with respect to a year, a plan offered by an organization or sponsor that has not had a contract as a Medicare Advantage organization in the preceding 3-year period.
(B) Qualifying county
The term "qualifying county" means, for a year, a county—
(i) that has an MA capitation rate that, in 2004, was based on the amount specified in subsection (c)(1)(B) for a Metropolitan Statistical Area with a population of more than 250,000;
(ii) for which, as of December 2009, of the Medicare Advantage eligible individuals residing in the county at least 25 percent of such individuals were enrolled in Medicare Advantage plans; and
(iii) that has per capita fee-for-service spending that is lower than the national monthly per capita cost for expenditures for individuals enrolled under the original medicare fee-for-service program for the year.
(4) Quality determinations for application of increase
(A) Quality determination
The quality rating for a plan shall be determined according to a 5-star rating system (based on the data collected under
(B) Plans that failed to report
An MA plan which does not report data that enables the Secretary to rate the plan for purposes of this paragraph shall be counted as having a rating of fewer than 3.5 stars.
(C) Special rule for first 3 plan years for plans that were converted from a reasonable cost reimbursement contract
For purposes of applying paragraph (1) and
(i) such plan shall not be treated as a new MA plan (as defined in paragraph (3)(A)(iii)(II)); and
(ii) in determining the star rating of the plan under subparagraph (A), to the extent that Medicare Advantage data for such plan is not available for a measure used to determine such star rating, the Secretary shall use data from the period in which such plan was a reasonable cost reimbursement contract.
(D) Special rule to prevent the artificial inflation of star ratings after the consolidation of Medicare Advantage plans offered by a single organization
(i) In general
If—
(I) a Medicare Advantage organization has entered into more than one contract with the Secretary with respect to the offering of Medicare Advantage plans; and
(II) on or after January 1, 2019, the Secretary approves a request from the organization to consolidate the plans under one or more contract 8 (in this subparagraph referred to as a "closed contract") with the plans offered under a separate contract (in this subparagraph referred to as the "continuing contract");
with respect to the continuing contract, the Secretary shall adjust the quality rating under the 5-star rating system and any quality increase under this subsection and rebate amounts under
(ii) Application
An adjustment under clause (i) shall apply for any year for which the quality rating of the continuing contract is based primarily on a measurement period that is prior to the first year in which a closed contract is no longer offered.
(5) Exception for PACE plans
This subsection shall not apply to payments to a PACE program under
(6) Quality measurement at the plan level for SNPs
(A) In general
Subject to subparagraph (B), the Secretary may require reporting of data under
(B) Considerations
Prior to applying quality measurement at the plan level under this paragraph, the Secretary shall—
(i) take into consideration the minimum number of enrollees in a specialized MA plan for special needs individuals in order to determine if a statistically significant or valid measurement of quality at the plan level is possible under this paragraph;
(ii) take into consideration the impact of such application on plans that serve a disproportionate number of individuals dually eligible for benefits under this subchapter and under subchapter XIX;
(iii) if quality measures are reported at the plan level, ensure that MA plans are not required to provide duplicative information; and
(iv) ensure that such reporting does not interfere with the collection of encounter data submitted by MA organizations or the administration of any changes to the program under this part as a result of the collection of such data.
(C) Application
If the Secretary applies quality measurement at the plan level under this paragraph—
(i) such quality measurement may include Medicare Health Outcomes Survey (HOS), Healthcare Effectiveness Data and Information Set (HEDIS), Consumer Assessment of Healthcare Providers and Systems (CAHPS) measures and quality measures under part D; and
(ii) the Secretary shall consider applying administrative actions, such as remedies described in
(7) Determination of feasibility of quality measurement at the plan level for all MA plans
(A) Determination of feasibility
The Secretary shall determine the feasibility of requiring reporting of data under
(B) Consideration of change
After making a determination under subparagraph (A), the Secretary shall consider requiring such reporting and applying such quality measures at the plan level as described in such subparagraph 3
(Aug. 14, 1935, ch. 531, title XVIII, §1853, as added
Editorial Notes
References in Text
Subsection (b)(6)(B)(iii), referred to in subsec. (a)(1)(C)(iii)(II), probably means
Section 2355 of the Deficit Reduction Act of 1984, as amended by section 13567(b) of the Omnibus Budget Reconciliation Act of 1993, referred to in subsec. (a)(1)(H), is section 2355 of
The Internal Revenue Code of 1986, referred to in subsec. (e)(2)(A), is classified generally to Title 26, Internal Revenue Code.
The matter following clause (v) of
Amendments
2018—Subsec. (o)(4)(D).
Subsec. (o)(6), (7).
2016—Subsec. (a)(1)(C)(i).
Subsec. (a)(1)(I).
Subsec. (k)(1).
Subsec. (k)(1)(B)(i).
Subsec. (k)(5).
Subsec. (n)(2)(A)(i).
Subsec. (n)(2)(E).
Subsec. (n)(2)(G).
2015—Subsec. (b)(2).
Subsec. (m)(2), (4)(A).
Subsec. (o)(4)(C).
2013—Subsec. (a)(1)(C)(ii)(III).
2010—Subsec. (a)(1)(B)(i), (ii).
Subsec. (a)(1)(B)(iv).
Subsec. (a)(1)(C)(ii).
Subsec. (a)(1)(C)(ii)(II).
Subsec. (a)(1)(C)(ii)(III), (IV).
Subsec. (a)(1)(C)(iii).
"(I)
"(II)
See Effective Date of 2010 Amendment note below.
Subsec. (b)(1)(B)(i).
Subsec. (b)(4).
Subsec. (c)(1).
Subsec. (c)(6).
Subsec. (d).
Subsec. (d)(1)(A).
"(i) for years before 2012, an MA local area (as defined in paragraph (2)); and
"(ii) for 2012 and succeeding years, a service area that is an entire urban or rural area, as applicable (as described in paragraph (5)); and"
for "with respect to an MA local plan, an MA local area (as defined in paragraph (2)); and", was repealed by
Subsec. (d)(5).
"(A)
"(i)
"(ii)
"(B)
"(C)
"(D)
"(i) agreements with another MA organization or MA plan that preclude the offering of benefits throughout an entire service area; or
"(ii) limitations in their structural capacity to support adequate networks throughout an entire service area as a result of the delivery system model of the MA local plan."
See Effective Date of 2010 Amendment note below.
Subsec. (d)(6).
Subsec. (j).
Subsec. (j)(1)(A).
"(I) for years before 2007, 1/12 of the annual MA capitation rate under subsection (c)(1) for the area for the year, adjusted as appropriate for the purpose of risk adjustment;
"(II) for 2007 through 2011, 1/12 of the applicable amount determined under subsection (k)(1) for the area for the year;
"(III) for 2012, the sum of—
"(aa) 2/3 of the quotient of—
"(AA) the applicable amount determined under subsection (k)(1) for the area for the year; and
"(BB) 12; and
"(bb) 1/3 of the MA competitive benchmark amount (determined under paragraph (2)) for the area for the month;
"(IV) for 2013, the sum of—
"(aa) 1/3 of the quotient of—
"(AA) the applicable amount determined under subsection (k)(1) for the area for the year; and
"(BB) 12; and
"(bb) 2/3 of the MA competitive benchmark amount (as so determined) for the area for the month;
"(V) for 2014, the MA competitive benchmark amount for the area for a month in 2013 (as so determined), increased by the national per capita MA growth percentage, described in subsection (c)(6) for 2014, but not taking into account any adjustment under subparagraph (C) of such subsection for a year before 2004; and
"(VI) for 2015 and each subsequent year, the MA competitive benchmark amount (as so determined) for the area for the month; or".
See Effective Date of 2010 Amendment note below.
Subsec. (j)(2), (3).
"(2)
"(A)
"(B)
"(i)
"(ii)
"(3)
See Effective Date of 2010 Amendment note below.
Subsec. (k)(2).
Subsec. (n).
"(1)
"(A)
"(i) 0.5 percent of the national monthly per capita cost for expenditures for individuals enrolled under the original medicare fee-for-service program for the year; and
"(ii) the total number of programs described in clauses (i) through (ix) of subparagraph (C) that the Secretary determines the plan is conducting for the year under such subparagraph.
"(B)
"(C)
"(i) Care management programs that—
"(I) target individuals with 1 or more chronic conditions;
"(II) identify gaps in care; and
"(III) facilitate improved care by using additional resources like nurses, nurse practitioners, and physician assistants.
"(ii) Programs that focus on patient education and self-management of health conditions, including interventions that—
"(I) help manage chronic conditions;
"(II) reduce declines in health status; and
"(III) foster patient and provider collaboration.
"(iii) Transitional care interventions that focus on care provided around a hospital inpatient episode, including programs that target post-discharge patient care in order to reduce unnecessary health complications and readmissions.
"(iv) Patient safety programs, including provisions for hospital-based patient safety programs in contracts that the Medicare Advantage organization offering the MA plan has with hospitals.
"(v) Financial policies that promote systematic coordination of care by primary care physicians across the full spectrum of specialties and sites of care, such as medical homes, capitation arrangements, or pay-for-performance programs.
"(vi) Programs that address, identify, and ameliorate health care disparities among principal at-risk subpopulations.
"(vii) Medication therapy management programs that are more extensive than is required under
"(viii) Health information technology programs, including clinical decision support and other tools to facilitate data collection and ensure patient-centered, appropriate care.
"(ix) Such other care management and coordination programs as the Secretary determines appropriate.
"(D)
"(E)
"(F)
"(2)
"(A)
"(i) in the case of a plan that achieves a 3 star rating (or comparable rating) on such system 2 percent of the national monthly per capita cost for expenditures for individuals enrolled under the original medicare fee-for-service program for the year; and
"(ii) in the case of a plan that achieves a 4 or 5 star rating (or comparable rating[)] on such system, 4 percent of such national monthly per capita cost for the year.
"(B)
"(C)
"(i) a rating system that uses up to 5 stars to rate clinical quality and enrollee satisfaction and performance at the Medicare Advantage contract or MA plan level; or
"(ii) such other system established by the Secretary that provides for the determination of a comparable quality performance rating to the rating system described in clause (i).
"(D)
"(i)
"(ii)
"(3)
"(A)
"(B)
"(4)
"(5)
See Effective Date of 2010 Amendment note below.
Subsec. (n)(2)(B).
Subsec. (n)(6).
Subsec. (o).
"(1)
"(2)
"(A)
"(B)
"(i) for 2012, the monthly per capita dollar amount of such rebates provided to enrollees under the MA local plan with respect to 2011; and
"(ii) for a subsequent year, 95 percent of the amount determined under this subparagraph for the preceding year.
"(3)
"(A)
"(i) for 2012 and 2013, the sum of—
"(I) the bid amount under
"(II) the applicable amount (as defined in paragraph (2)(B)) for the MA local plan for the year.
"(ii) for 2014 and subsequent years, the sum of—
"(I) the MA competitive benchmark amount under subsection (j)(1)(A)(i) for the area for the month, adjusted, only to the extent the Secretary determines necessary, to account for induced utilization as a result of rebates provided to grandfathered enrollees (except that such adjustment shall not exceed 0.5 percent of such MA competitive benchmark amount); and
"(II) the applicable amount (as so defined) for the MA local plan for the year.
"(B)
"(C)
"(D)
"(E)
"(F)
"(4)
See Effective Date of 2010 Amendment note below.
Subsec. (p).
"(1)
"(2)
"(A) enrolls in an MA local plan in an applicable area; and
"(B) experiences a significant reduction in extra benefits described in clause (ii) of
"(3)
"(A) The 2 largest metropolitan statistical areas, if the Secretary determines that the total amount of such extra benefits for each enrollee for the month in those areas is greater than $100.
"(B) A county where—
"(i) the MA area-specific non-drug monthly benchmark amount for a month in 2011 is equal to the legacy urban floor amount (as described in subsection (c)(1)(B)(iii)), as determined by the Secretary for the area for 2011;
"(ii) the percentage of Medicare Advantage eligible beneficiaries in the county who are enrolled in an MA plan for 2009 is greater than 30 percent (as determined by the Secretary); and
"(iii) average bids submitted by an MA organization under
"(C) If the Secretary determines appropriate, a county contiguous to an area or county described in subparagraph (A) or (B), respectively.
"(4)
"(5)
See Effective Date of 2010 Amendment note below.
Subsec. (p)(3)(A).
2009—Subsec. (a)(1)(A).
Subsec. (c)(1)(D)(i).
Subsec. (c)(6)(A).
Subsec. (f).
Subsec. (l).
Subsec. (m).
2008—Subsec. (k)(1).
Subsec. (k)(4).
2006—Subsec. (a)(1)(C).
Subsec. (j)(1)(A).
Subsec. (j)(1)(B).
Subsec. (k).
2003—Subsec. (a)(1)(A).
Subsec. (a)(1)(B) to (G).
Subsec. (a)(1)(H).
Subsec. (a)(3)(C)(ii).
Subsec. (a)(3)(C)(iii), (iv).
Subsec. (a)(4).
Subsec. (b)(1).
Subsec. (b)(1)(B)(iii).
Subsec. (b)(3).
Subsec. (b)(4).
Subsec. (c)(1).
Subsec. (c)(1)(A).
Subsec. (c)(1)(B)(iv).
Subsec. (c)(1)(C)(iv).
Subsec. (c)(1)(C)(v).
Subsec. (c)(1)(D).
Subsec. (c)(3)(A).
Subsec. (c)(3)(E).
Subsec. (c)(5).
Subsec. (c)(6)(C).
Subsec. (c)(7).
Subsec. (d).
Subsec. (d)(1).
Subsec. (d)(2), (3).
Subsec. (d)(4).
Subsec. (d)(4)(A).
Subsec. (d)(4)(A)(iii).
Subsec. (d)(4)(B).
Subsec. (f).
Subsec. (g).
Subsec. (g)(2)(B).
Subsec. (j).
Subsec. (j)(1)(A).
2002—Subsec. (b)(1).
2000—Subsec. (a)(1)(A).
Subsec. (a)(1)(B).
Subsec. (a)(3)(C)(ii).
Subsec. (a)(3)(C)(ii)(I).
Subsec. (a)(3)(C)(ii)(II) to (V).
Subsec. (a)(3)(C)(iii).
Subsec. (c)(1)(B)(ii), (iii).
Subsec. (c)(1)(B)(iv).
Subsec. (c)(1)(C)(ii), (iii).
Subsec. (c)(1)(C)(iv).
Subsec. (c)(5).
Subsec. (c)(7).
Subsec. (i)(1).
1999—Subsec. (a)(1)(A).
Subsec. (a)(3)(C).
Subsec. (b)(4).
Subsec. (c)(5).
Subsec. (c)(6)(B)(v).
Subsec. (i).
Statutory Notes and Related Subsidiaries
Change of Name
References to Medicare+Choice deemed to refer to Medicare Advantage or MA, subject to an appropriate transition provided by the Secretary of Health and Human Services in the use of those terms, see section 201 of
Effective Date of 2015 Amendment
Amendment by
Effective Date of 2010 Amendment
Repeal of sections 3201 and 3203 of
Effective Date of 2003 Amendment
Amendment by sections 221(d)(1), (4) and 222(d)–(f), (i) of
Amendment by section 237(b)(1), (2)(B) of
Effective Date of 2002 Amendment
Effective Date of 2000 Amendment
Amendment by section 1(a)(6) [title VI, §606(a)(2)(A)] of
Amendment by section 1(a)(6) [title VI, §611(a)] of
Reports on Risk Adjustment Models
MedPAC Study of AAPCC
Implementation of 2003 Amendment
"(1)
"(2)
"(3)
"(A)
"(B)
"(C)
"(4)
"(5)
Special Rule for January and February of 2001
"(1)
"(2)
Transition to Revised Medicare+Choice Payment Rates
"(a)
"(b)
"(c)
"(1) a Medicare+Choice organization provided notice to the Secretary of Health and Human Services as of July 3, 2000, that it was renewing its contract under part C of title XVIII of the Social Security Act [this part] for all or part of the service area or areas served under its current contract, and
"(2) any part of the service area or areas addressed in such notice includes a payment area for which the Medicare+Choice capitation rate under section 1853(c) of such Act (
such organization shall revise its submission of the information described in section 1854(a)(1) of the Social Security Act (
"(d)
"(e)
Publication
Report on Inclusion of Certain Costs of the Department of Veterans Affairs and Military Facility Services in Calculating Medicare+Choice Payment Rates
"(1) the actual or estimated cost of such services to medicare-eligible beneficiaries;
"(2) the change in Medicare+Choice capitation payment rates if such costs are included in the calculation of payment rates;
"(3) one or more proposals for the implementation of payment adjustments to Medicare+Choice plans in counties where the payment rate has been affected due to the failure to calculate the cost of such services to medicare-eligible beneficiaries; and
"(4) a system to ensure that when a Medicare+Choice enrollee receives covered services through a facility of the Department of Veterans Affairs or the Department of Defense there is an appropriate payment recovery to the medicare program under title XVIII of the Social Security Act [this subchapter]."
MedPAC Study and Report
"(1)
"(2)
"(A) The ability of the average risk adjustment factor applied to a Medicare+Choice plan to explain variations in plans' average per capita medicare costs, as reported by Medicare+Choice plans in the plans' adjusted community rate filings.
"(B) The year-to-year stability of the risk factors applied to each Medicare+Choice plan and the potential for substantial changes in payment for small Medicare+Choice plans.
"(C) For medicare beneficiaries newly enrolled in Medicare+Choice plans in a given year, the correspondence between the average risk factor calculated from medicare fee-for-service data for those individuals from the period prior to their enrollment in a Medicare+Choice plan and the average risk factor calculated for such individuals during their initial year of enrollment in a Medicare+Choice plan.
"(D) For medicare beneficiaries disenrolling from or switching among Medicare+Choice plans in a given year, the correspondence between the average risk factor calculated from data pertaining to the period prior to their disenrollment from a Medicare+Choice plan and the average risk factor calculated from data pertaining to the period after disenrollment.
"(E) An evaluation of the exclusion of 'discretionary' hospitalizations from consideration in the risk adjustment methodology.
"(F) Suggestions for changes or improvements in the risk adjustment methodology.
"(3)
Study and Report Regarding Reporting of Encounter Data
"(1)
"(A) Limiting the number and types of sites of services (that are in addition to inpatient sites) for which encounter data must be reported.
"(B) Establishing alternative risk adjustment methods that would require submission of less data.
"(C) The potential for Medicare+Choice organizations to misreport, overreport, or underreport prevalence of diagnoses in outpatient sites of care, the potential for increases in payments to Medicare+Choice organizations from changes in Medicare+Choice plan coding practices (commonly known as 'coding creep') and proposed methods for detecting and adjusting for such variations in diagnosis coding as part of the risk adjustment methodology using encounter data from multiple sites of care.
"(D) The impact of such requirements on the willingness of insurers to offer Medicare+Choice MSA plans and options for modifying encounter data reporting requirements to accommodate such plans.
"(E) Differences in the ability of Medicare+Choice organizations to report encounter data, and the potential for adverse competitive impacts on group and staff model health maintenance organizations or other integrated providers of care based on data reporting capabilities.
"(2)
Special Rule for 2001
Development of Special Payment Rules Under Medicare+Choice Program for Frail Elderly Enrolled in Specialized Programs
"(1)
"(A) accounts for the prevalence, mix, and severity of chronic conditions among such frail elderly Medicare+Choice beneficiaries;
"(B) includes medical diagnostic factors from all provider settings (including hospital and nursing facility settings); and
"(C) includes functional indicators of health status and such other factors as may be necessary to achieve appropriate payments for plans serving such beneficiaries.
"(2)
Publication of New Capitation Rates
Medicare+Choice Competitive Pricing Demonstration Project
"SEC. 4011. MEDICARE PREPAID COMPETITIVE PRICING DEMONSTRATION PROJECT.
"(a)
"(1)
"(2)
"(A)
"(B)
"(C)
"(D)
"(3)
"(b)
"(1)
"(2)
"(A)
"(B)
"(3)
"(c)
"(1)
"(A) in accordance with the recommendations of the Competitive Pricing Advisory Committee—
"(i) establish the benefit design among plans offered in such area,
"(ii) structure the method for selecting plans offered in such area; and
"(iii) establish beneficiary premiums for plans offered in such area in a manner such that a beneficiary who enrolls in an offered plan the per capita bid for which is less than the standard per capita government contribution (as established by the competitive pricing methodology established for such area) may, at the plan's election, be offered a rebate of some or all of the medicare part B premium that such individual must otherwise pay in order to participate in a Medicare+Choice plan under the Medicare+Choice program; and
"(B) in consultation with such Committee—
"(i) establish methods for setting the price to be paid to plans, including, if the Secretaries determines appropriate, the rewarding and penalizing of Medicare+Choice plans in the area on the basis of the attainment of, or failure to attain, applicable quality standards, and
"(ii) provide for the collection of plan information (including information concerning quality and access to care), the dissemination of information, and the methods of evaluating the results of the project.
"(2)
"(d)
"(1)
"(2)
"(e)
"(f)
"(g)
"(h)
"SEC. 4012. ADVISORY COMMITTEES.
"(a)
"(1)
"(2)
"(3)
"(4)
"(5)
"(b)
"(c)
1 So in original. Probably should be "parts".
2 See References in Text note below.
4 So in original.
5 So in original. Probably should be "(m)(2),".
6 So in original. Probably should be "1395w–4(o)(2)(C)".
7 So in original. Probably should be "1395w–4(o)(2)(B)".
8 So in original. Probably should be "contracts".
§1395w–24. Premiums and bid amounts
(a) Submission of proposed premiums, bid amounts, and related information
(1) In general
(A) Initial submission
Not later than the second Monday in September of 2002, 2003, and 2004 (or the first Monday in June of each subsequent year), each MA organization shall submit to the Secretary, in a form and manner specified by the Secretary and for each MA plan for the service area (or segment of such an area if permitted under subsection (h)) in which it intends to be offered in the following year the following:
(i) The information described in paragraph (2), (3), (4), or (6)(A) for the type of plan and year involved.
(ii) The plan type for each plan.
(iii) The enrollment capacity (if any) in relation to the plan and area.
(B) Beneficiary rebate information
In the case of a plan required to provide a monthly rebate under subsection (b)(1)(C) for a year, the MA organization offering the plan shall submit to the Secretary, in such form and manner and at such time as the Secretary specifies, information on—
(i) the manner in which such rebate will be provided under clause (ii) of such subsection; and
(ii) the MA monthly prescription drug beneficiary premium (if any) and the MA monthly supplemental beneficiary premium (if any).
(C) Paperwork reduction for offering of MA regional plans nationally or in multi-region areas
The Secretary shall establish requirements for information submission under this subsection in a manner that promotes the offering of MA regional plans in more than one region (including all regions) through the filing of consolidated information.
(2) Information required for coordinated care plans before 2006
For a Medicare+Choice plan described in
(A) Basic (and additional) benefits
For benefits described in
(i) the adjusted community rate (as defined in subsection (f)(3));
(ii) the Medicare+Choice monthly basic beneficiary premium (as defined in subsection (b)(2)(A));
(iii) a description of deductibles, coinsurance, and copayments applicable under the plan and the actuarial value of such deductibles, coinsurance, and copayments, described in subsection (e)(1)(A); and
(iv) if required under subsection (f)(1), a description of the additional benefits to be provided pursuant to such subsection and the value determined for such proposed benefits under such subsection.
(B) Supplemental benefits
For benefits described in
(i) the adjusted community rate (as defined in subsection (f)(3));
(ii) the Medicare+Choice monthly supplemental beneficiary premium (as defined in subsection (b)(2)(B)); and
(iii) a description of deductibles, coinsurance, and copayments applicable under the plan and the actuarial value of such deductibles, coinsurance, and copayments, described in subsection (e)(2).
(3) Requirements for MSA plans
For an MSA plan for any year, the information described in this paragraph is as follows:
(A) Basic (and additional) benefits
For benefits described in
(B) Supplemental benefits
For benefits described in
(4) Requirements for private fee-for-service plans before 2006
For a Medicare+Choice plan described in
(A) Basic (and additional) benefits
For benefits described in
(i) the adjusted community rate (as defined in subsection (f)(3));
(ii) the amount of the Medicare+Choice monthly basic beneficiary premium;
(iii) a description of the deductibles, coinsurance, and copayments applicable under the plan, and the actuarial value of such deductibles, coinsurance, and copayments, as described in subsection (e)(4)(A); and
(iv) if required under subsection (f)(1), a description of the additional benefits to be provided pursuant to such subsection and the value determined for such proposed benefits under such subsection.
(B) Supplemental benefits
For benefits described in
(5) Review
(A) In general
Subject to subparagraph (B), the Secretary shall review the adjusted community rates, the amounts of the basic and supplemental premiums, and values filed under paragraphs (2) and (4) of this subsection and shall approve or disapprove such rates, amounts, and values so submitted. The Chief Actuary of the Centers for Medicare & Medicaid Services shall review the actuarial assumptions and data used by the Medicare+Choice organization with respect to such rates, amounts, and values so submitted to determine the appropriateness of such assumptions and data.
(B) Exception
The Secretary shall not review, approve, or disapprove the amounts submitted under paragraph (3) or, in the case of an MA private fee-for-service plan, subparagraphs (A)(ii) and (B) of paragraph (4).
(C) Rejection of bids
(i) In general
Nothing in this section shall be construed as requiring the Secretary to accept any or every bid submitted by an MA organization under this subsection.
(ii) Authority to deny bids that propose significant increases in cost sharing or decreases in benefits
The Secretary may deny a bid submitted by an MA organization for an MA plan if it proposes significant increases in cost sharing or decreases in benefits offered under the plan.
(6) Submission of bid amounts by MA organizations beginning in 2006
(A) Information to be submitted
For an MA plan (other than an MSA plan) for a plan year beginning on or after January 1, 2006, the information described in this subparagraph is as follows:
(i) The monthly aggregate bid amount for the provision of all items and services under the plan, which amount shall be based on average revenue requirements (as used for purposes of
(ii) The proportions of such bid amount that are attributable to—
(I) the provision of benefits under the original medicare fee-for-service program option (as defined in
(II) the provision of basic prescription drug coverage; and
(III) the provision of supplemental health care benefits.
(iii) The actuarial basis for determining the amount under clause (i) and the proportions described in clause (ii) and such additional information as the Secretary may require to verify such actuarial bases and the projected number of enrollees in each MA local area.
(iv) A description of deductibles, coinsurance, and copayments applicable under the plan and the actuarial value of such deductibles, coinsurance, and copayments, described in subsection (e)(4)(A).
(v) With respect to qualified prescription drug coverage, the information required under
In the case of a specialized MA plan for special needs individuals, the information described in this subparagraph is such information as the Secretary shall specify.
(B) Acceptance and negotiation of bid amounts
(i) Authority
Subject to clauses (iii) and (iv), the Secretary has the authority to negotiate regarding monthly bid amounts submitted under subparagraph (A) (and the proportions described in subparagraph (A)(ii)), including supplemental benefits provided under subsection (b)(1)(C)(ii)(I) and in exercising such authority the Secretary shall have authority similar to the authority of the Director of the Office of Personnel Management with respect to health benefits plans under
(ii) Application of FEHBP standard
Subject to clause (iv), the Secretary may only accept such a bid amount or proportion if the Secretary determines that such amount and proportions are supported by the actuarial bases provided under subparagraph (A) and reasonably and equitably reflects the revenue requirements (as used for purposes of
(iii) Noninterference
In order to promote competition under this part and part D and in carrying out such parts, the Secretary may not require any MA organization to contract with a particular hospital, physician, or other entity or individual to furnish items and services under this subchapter or require a particular price structure for payment under such a contract to the extent consistent with the Secretary's authority under this part.
(iv) Exception
In the case of a plan described in
(b) Monthly premium charged
(1) In general
(A) Rule for other than MSA plans
Subject to the rebate under subparagraph (C), the monthly amount (if any) of the premium charged to an individual enrolled in a Medicare+Choice plan (other than an MSA plan) offered by a Medicare+Choice organization shall be equal to the sum of the Medicare+Choice monthly basic beneficiary premium, the Medicare+Choice monthly supplementary beneficiary premium (if any), and, if the plan provides qualified prescription drug coverage, the MA monthly prescription drug beneficiary premium.
(B) MSA plans
The monthly amount of the premium charged to an individual enrolled in an MSA plan offered by a Medicare+Choice organization shall be equal to the Medicare+Choice monthly supplemental beneficiary premium (if any).
(C) Beneficiary rebate rule
(i) Requirement
The MA plan shall provide to the enrollee a monthly rebate equal to 75 percent (or the applicable rebate percentage specified in clause (iii) in the case of plan years beginning on or after January 1, 2012) of the average per capita savings (if any) described in paragraph (3)(C) or (4)(C), as applicable to the plan and year involved.
(ii) Form of rebate for plan years before 2012
For plan years before 2012, a rebate required under this subparagraph shall be provided through the application of the amount of the rebate toward one or more of the following:
(I) Provision of supplemental health care benefits and payment for premium for supplemental benefits
The provision of supplemental health care benefits described in
(II) Payment for premium for prescription drug coverage
Crediting toward the MA monthly prescription drug beneficiary premium.
(III) Payment toward part B premium
Crediting toward the premium imposed under part B (determined without regard to the application of subsections (b), (h), and (i) of
(iii) Applicable rebate percentage
The applicable rebate percentage specified in this clause for a plan for a year, based on the system under section 1395w–23(o)(4)(A), is the sum of—
(I) the product of the old phase-in proportion for the year under clause (iv) and 75 percent; and
(II) the product of the new phase-in proportion for the year under clause (iv) and the final applicable rebate percentage under clause (v).
(iv) Old and new phase-in proportions
For purposes of clause (iv)—
(I) for 2012, the old phase-in proportion is 2/3 and the new phase-in proportion is 1/3;
(II) for 2013, the old phase-in proportion is 1/3 and the new phase-in proportion is 2/3; and
(III) for 2014 and any subsequent year, the old phase-in proportion is 0 and the new phase-in proportion is 1.
(v) Final applicable rebate percentage
Subject to clause (vi), the final applicable rebate percentage under this clause is—
(I) in the case of a plan with a quality rating under such system of at least 4.5 stars, 70 percent;
(II) in the case of a plan with a quality rating under such system of at least 3.5 stars and less than 4.5 stars, 65 percent; and
(III) in the case of a plan with a quality rating under such system of less than 3.5 stars, 50 percent.
(vi) Treatment of low enrollment and new plans
For purposes of clause (v)—
(I) for 2012, in the case of a plan described in subclause (I) of subsection (o)(3)(A)(ii),1 the plan shall be treated as having a rating of 4.5 stars; and
(II) for 2012 or a subsequent year, in the case of a new MA plan (as defined under subclause (III) of subsection (o)(3)(A)(iii) 2) that is treated as a qualifying plan pursuant to subclause (I) of such subsection, the plan shall be treated as having a rating of 3.5 stars.
(vii) Disclosure relating to rebates
The plan shall disclose to the Secretary information on the form and amount of the rebate provided under this subparagraph or the actuarial value in the case of supplemental health care benefits.
(viii) Application of part B premium reduction
Insofar as an MA organization elects to provide a rebate under this subparagraph under a plan as a credit toward the part B premium under clause (ii)(III), the Secretary shall apply such credit to reduce the premium under
(2) Premium and bid terminology defined
For purposes of this part:
(A) MA monthly basic beneficiary premium
The term "MA monthly basic beneficiary premium" means, with respect to an MA plan—
(i) described in
(ii) described in
(B) MA monthly prescription drug beneficiary premium
The term "MA monthly prescription drug beneficiary premium" means, with respect to an MA plan, the base beneficiary premium (as determined under paragraph (2) or (8) (as applicable) of
(C) MA monthly supplemental beneficiary premium
(i) In general
The term "MA monthly supplemental beneficiary premium" means, with respect to an MA plan, the portion of the aggregate monthly bid amount submitted under clause (i) of subsection (a)(6)(A) for the year that is attributable under clause (ii)(III) of such subsection to the provision of supplemental health care benefits, less the amount of rebate credited toward such portion under subsection (b)(1)(C)(ii)(I).
(ii) Application of MA monthly supplementary beneficiary premium
For plan years beginning on or after January 1, 2012, any MA monthly supplementary beneficiary premium charged to an individual enrolled in an MA plan shall be used for the purposes, and in the priority order, described in subclauses (I) through (III) of paragraph (1)(C)(iii).3
(D) Medicare+Choice monthly MSA premium
The term "Medicare+Choice monthly MSA premium" means, with respect to a Medicare+Choice plan, the amount of such premium filed under subsection (a)(3)(A) for the plan.
(E) Unadjusted MA statutory non-drug monthly bid amount
The term "unadjusted MA statutory non-drug monthly bid amount" means the portion of the bid amount submitted under clause (i) of subsection (a)(6)(A) for the year that is attributable under clause (ii)(I) of such subsection to the provision of benefits under the original medicare fee-for-service program option (as defined in
(3) Computation of average per capita monthly savings for local plans
For purposes of paragraph (1)(C)(i), the average per capita monthly savings referred to in such paragraph for an MA local plan and year is computed as follows:
(A) Determination of statewide average risk adjustment for local plans
(i) In general
Subject to clause (iii), the Secretary shall determine, at the same time rates are promulgated under
(ii) Treatment of States for first year in which local plan offered
In the case of a State in which no MA local plan was offered in the previous year, the Secretary shall estimate such average. In making such estimate, the Secretary may use average risk adjustment factors applied to comparable States or applied on a national basis.
(iii) Authority to determine risk adjustment for areas other than States
The Secretary may provide for the determination and application of risk adjustment factors under this subparagraph on the basis of areas other than States or on a plan-specific basis.
(B) Determination of risk adjusted benchmark and risk-adjusted bid for local plans
For each MA plan offered in a local area in a State, the Secretary shall—
(i) adjust the applicable MA area-specific non-drug monthly benchmark amount (as defined in
(ii) adjust the unadjusted MA statutory non-drug monthly bid amount by such applicable average risk adjustment factor.
(C) Determination of average per capita monthly savings
The average per capita monthly savings described in this subparagraph for an MA local plan is equal to the amount (if any) by which—
(i) the risk-adjusted benchmark amount computed under subparagraph (B)(i); exceeds
(ii) the risk-adjusted bid computed under subparagraph (B)(ii).
(4) Computation of average per capita monthly savings for regional plans
For purposes of paragraph (1)(C)(i), the average per capita monthly savings referred to in such paragraph for an MA regional plan and year is computed as follows:
(A) Determination of regionwide average risk adjustment for regional plans
(i) In general
The Secretary shall determine, at the same time rates are promulgated under
(ii) Treatment of regions for first year in which regional plan offered
In the case of an MA region in which no MA regional plan was offered in the previous year, the Secretary shall estimate such average. In making such estimate, the Secretary may use average risk adjustment factors applied to comparable regions or applied on a national basis.
(iii) Authority to determine risk adjustment for areas other than regions
The Secretary may provide for the determination and application of risk adjustment factors under this subparagraph on the basis of areas other than MA regions or on a plan-specific basis.
(B) Determination of risk-adjusted benchmark and risk-adjusted bid for regional plans
For each MA regional plan offered in a region, the Secretary shall—
(i) adjust the applicable MA area-specific non-drug monthly benchmark amount (as defined in
(ii) adjust the unadjusted MA statutory non-drug monthly bid amount by such applicable average risk adjustment factor.
(C) Determination of average per capita monthly savings
The average per capita monthly savings described in this subparagraph for an MA regional plan is equal to the amount (if any) by which—
(i) the risk-adjusted benchmark amount computed under subparagraph (B)(i); exceeds
(ii) the risk-adjusted bid computed under subparagraph (B)(ii).
(c) Uniform premium and bid amounts
Except as permitted under
(d) Terms and conditions of imposing premiums
(1) In general
Each Medicare+Choice organization shall permit the payment of Medicare+Choice monthly basic, prescription drug, and supplemental beneficiary premiums on a monthly basis, may terminate election of individuals for a Medicare+Choice plan for failure to make premium payments only in accordance with
(2) Beneficiary's option of payment through withholding from social security payment or use of electronic funds transfer mechanism
In accordance with regulations, an MA organization shall permit each enrollee, at the enrollee's option, to make payment of premiums (if any) under this part to the organization through—
(A) withholding from benefit payments in the manner provided under
(B) an electronic funds transfer mechanism (such as automatic charges of an account at a financial institution or a credit or debit card account); or
(C) such other means as the Secretary may specify, including payment by an employer or under employment-based retiree health coverage (as defined in
All premium payments that are withheld under subparagraph (A) shall be credited to the appropriate Trust Fund (or Account thereof), as specified by the Secretary, under this subchapter and shall be paid to the MA organization involved. No charge may be imposed under an MA plan with respect to the election of the payment option described in subparagraph (A). The Secretary shall consult with the Commissioner of Social Security and the Secretary of the Treasury regarding methods for allocating premiums withheld under subparagraph (A) among the appropriate Trust Funds and Account.
(3) Information necessary for collection
In order to carry out paragraph (2)(A) with respect to an enrollee who has elected such paragraph to apply, the Secretary shall transmit to the Commissioner of Social Security—
(A) by the beginning of each year, the name, social security account number, consolidated monthly beneficiary premium described in paragraph (4) owed by such enrollee for each month during the year, and other information determined appropriate by the Secretary, in consultation with the Commissioner of Social Security; and
(B) periodically throughout the year, information to update the information previously transmitted under this paragraph for the year.
(4) Consolidated monthly beneficiary premium
In the case of an enrollee in an MA plan, the Secretary shall provide a mechanism for the consolidation of—
(A) the MA monthly basic beneficiary premium (if any);
(B) the MA monthly supplemental beneficiary premium (if any); and
(C) the MA monthly prescription drug beneficiary premium (if any).
(e) Limitation on enrollee liability
(1) For basic and additional benefits before 2006
For periods before 2006, in no event may—
(A) the Medicare+Choice monthly basic beneficiary premium (multiplied by 12) and the actuarial value of the deductibles, coinsurance, and copayments applicable on average to individuals enrolled under this part with a Medicare+Choice plan described in
(B) the actuarial value of the deductibles, coinsurance, and copayments that would be applicable on average to individuals entitled to benefits under part A and enrolled under part B if they were not members of a Medicare+Choice organization for the year.
(2) For supplemental benefits before 2006
For periods before 2006, if the Medicare+Choice organization provides to its members enrolled under this part in a Medicare+Choice plan described in
(3) Determination on other basis
If the Secretary determines that adequate data are not available to determine the actuarial value under paragraph (1)(A), (2), or (4), the Secretary may determine such amount with respect to all individuals in same geographic area, the State, or in the United States, eligible to enroll in the Medicare+Choice plan involved under this part or on the basis of other appropriate data.
(4) Special rule for private fee-for-service plans and for basic benefits beginning in 2006
With respect to a Medicare+Choice private fee-for-service plan (other than a plan that is an MSA plan) and for periods beginning with 2006, with respect to an MA plan described in
(A) the actuarial value of the deductibles, coinsurance, and copayments applicable on average to individuals enrolled under this part with such a plan of an organization with respect to benefits under the original medicare fee-for-service program option, exceed
(B) the actuarial value of the deductibles, coinsurance, and copayments that would be applicable with respect to such benefits on average to individuals entitled to benefits under part A and enrolled under part B if they were not members of a Medicare+Choice organization for the year.
(f) Requirement for additional benefits before 2006
(1) Requirement
(A) In general
For years before 2006, each Medicare+Choice organization (in relation to a Medicare+Choice plan, other than an MSA plan, it offers) shall provide that if there is an excess amount (as defined in subparagraph (B)) for the plan for a contract year, subject to the succeeding provisions of this subsection, the organization shall provide to individuals such additional benefits (as the organization may specify) in a value which the Secretary determines is at least equal to the adjusted excess amount (as defined in subparagraph (C)).
(B) Excess amount
For purposes of this paragraph, the "excess amount", for an organization for a plan, is the amount (if any) by which—
(i) the average of the capitation payments made to the organization under
(ii) the actuarial value of the required benefits described in
(C) Adjusted excess amount
For purposes of this paragraph, the "adjusted excess amount", for an organization for a plan, is the excess amount reduced to reflect any amount withheld and reserved for the organization for the year under paragraph (2).
(D) Uniform application
This paragraph shall be applied uniformly for all enrollees for a plan.
(E) Premium reductions
(i) In general
Subject to clause (ii), as part of providing any additional benefits required under subparagraph (A), a Medicare+Choice organization may elect a reduction in its payments under
(ii) Amount of reduction
The amount of the reduction under clause (i) with respect to any enrollee in a Medicare+Choice plan—
(I) may not exceed 125 percent of the premium described under
(II) shall apply uniformly to each enrollee of the Medicare+Choice plan to which such reduction applies.
(F) Construction
Nothing in this subsection shall be construed as preventing a Medicare+Choice organization from providing supplemental benefits (described in
(2) Stabilization fund
A Medicare+Choice organization may provide that a part of the value of an excess amount described in paragraph (1) be withheld and reserved in the Federal Hospital Insurance Trust Fund and in the Federal Supplementary Medical Insurance Trust Fund (in such proportions as the Secretary determines to be appropriate) by the Secretary for subsequent annual contract periods, to the extent required to stabilize and prevent undue fluctuations in the additional benefits offered in those subsequent periods by the organization in accordance with such paragraph. Any of such value of the amount reserved which is not provided as additional benefits described in paragraph (1)(A) to individuals electing the Medicare+Choice plan of the organization in accordance with such paragraph prior to the end of such periods, shall revert for the use of such trust funds.
(3) Adjusted community rate
For purposes of this subsection, subject to paragraph (4), the term "adjusted community rate" for a service or services means, at the election of a Medicare+Choice organization, either—
(A) the rate of payment for that service or services which the Secretary annually determines would apply to an individual electing a Medicare+Choice plan under this part if the rate of payment were determined under a "community rating system" (as defined in
(B) such portion of the weighted aggregate premium, which the Secretary annually estimates would apply to such an individual, as the Secretary annually estimates is attributable to that service or services,
but adjusted for differences between the utilization characteristics of the individuals electing coverage under this part and the utilization characteristics of the other enrollees with the plan (or, if the Secretary finds that adequate data are not available to adjust for those differences, the differences between the utilization characteristics of individuals selecting other Medicare+Choice coverage, or Medicare+Choice eligible individuals in the area, in the State, or in the United States, eligible to elect Medicare+Choice coverage under this part and the utilization characteristics of the rest of the population in the area, in the State, or in the United States, respectively).
(4) Determination based on insufficient data
For purposes of this subsection, if the Secretary finds that there is insufficient enrollment experience to determine an average of the capitation payments to be made under this part at the beginning of a contract period or to determine (in the case of a newly operated provider-sponsored organization or other new organization) the adjusted community rate for the organization, the Secretary may determine such an average based on the enrollment experience of other contracts entered into under this part and may determine such a rate using data in the general commercial marketplace.
(g) Prohibition of State imposition of premium taxes
No State may impose a premium tax or similar tax with respect to payments to Medicare+Choice organizations under
(h) Permitting use of segments of service areas
The Secretary shall permit a Medicare+Choice organization to elect to apply the provisions of this section uniformly to separate segments of a service area (rather than uniformly to an entire service area) as long as such segments are composed of one or more Medicare+Choice payment areas.
(Aug. 14, 1935, ch. 531, title XVIII, §1854, as added
Editorial Notes
References in Text
Cl. (iii) of par. (1)(C), referred to in subsec. (b)(2)(C)(ii), was struck out and a new cl. (iii) was added by
Amendments
2022—Subsec. (b)(2)(B).
2018—Subsec. (a)(6)(A)(ii)(I).
2010—Subsec. (a)(5)(C).
Subsec. (a)(6)(A).
Subsec. (a)(6)(B)(i).
Subsec. (a)(6)(B)(v).
"(I)
"(aa) actuarial guidelines for the submission of bid information under this paragraph; and
"(bb) bidding rules that are appropriate to ensure accurate bids and fair competition among MA plans.
"(II)
"(III)
See Effective Date of 2010 Amendment note below.
Subsec. (b)(1)(C)(i).
Subsec. (b)(1)(C)(ii).
Subsec. (b)(1)(C)(iii).
"(I) First, to use the most significant share to meaningfully reduce cost-sharing otherwise applicable for benefits under the original medicare fee-for-service program under parts A and B and for qualified prescription drug coverage under part D, including the reduction of any deductibles, copayments, and maximum limitations on out-of-pocket expenses otherwise applicable. Any reduction of maximum limitations on out-of-pocket expenses under the preceding sentence shall apply to all benefits under the original medicare fee-for-service program option. The Secretary may provide guidance on meaningfully reducing cost-sharing under this subclause, except that such guidance may not require a particular amount of cost-sharing or reduction in cost-sharing.
"(II) Second, to use the next most significant share to meaningfully provide coverage of preventive and wellness health care benefits (as defined by the Secretary) which are not benefits under the original medicare fee-for-service program, such as smoking cessation, a free flu shot, and an annual physical examination.
"(III) Third, to use the remaining share to meaningfully provide coverage of other health care benefits which are not benefits under the original medicare fee-for-service program, such as eye examinations and dental coverage, and are not benefits described in subclause (II)."
Subsec. (b)(1)(C)(iv).
Subsec. (b)(1)(C)(v).
Subsec. (b)(1)(C)(vi) to (viii).
Subsec. (b)(2)(C).
Subsec. (b)(3)(B)(i).
Subsec. (b)(4)(B)(i).
Subsec. (h).
2003—
Subsec. (a).
Subsec. (a)(1).
"(A) the information described in paragraph (2), (3), or (4) for the type of plan involved; and
"(B) the enrollment capacity (if any) in relation to the plan and area."
Subsec. (a)(2).
Subsec. (a)(3).
Subsec. (a)(4).
Subsec. (a)(5)(A).
Subsec. (a)(5)(B).
Subsec. (a)(6).
Subsec. (b)(1)(A).
Subsec. (b)(1)(C).
Subsec. (b)(2).
Subsec. (b)(3), (4).
Subsec. (c).
Subsec. (d).
Subsec. (e)(1).
Subsec. (e)(2).
Subsec. (e)(3).
Subsec. (e)(4).
Subsec. (e)(4)(A).
Subsec. (e)(4)(B).
Subsec. (f).
Subsec. (f)(1)(A).
Subsec. (g).
2002—Subsec. (a)(1).
2000—Subsec. (a)(5)(A).
Subsec. (f)(1)(E), (F).
1999—Subsec. (a)(1).
Subsec. (a)(2)(A).
Subsec. (a)(2)(B).
Subsec. (a)(3)(A), (B).
Subsec. (a)(4).
Subsec. (a)(4)(A).
Subsec. (a)(4)(B).
Subsec. (h).
Statutory Notes and Related Subsidiaries
Change of Name
References to Medicare+Choice deemed to refer to Medicare Advantage or MA, subject to an appropriate transition provided by the Secretary of Health and Human Services in the use of those terms, see section 201 of
Effective Date of 2010 Amendment
Repeal of sections 3201 and 3203 of
Effective Date of 2003 Amendment
Amendment by section 222(a)(1), (b), (c), (g) of
Effective Date of 2002 Amendment
Effective Date of 2000 Amendment
Amendment by section 1(a)(6) [title VI, §606(a)(1)] of
Effective Date of 1999 Amendment
Amendment by section 1000(a)(6) [title III, §321(k)(6)(C)] of
1 So in original. Probably means subclause (I) of section 1395w–23(o)(3)(A)(ii) of this title.
2 So in original. Probably means subclause (II) of section 1395w–23(o)(3)(A)(iii) of this title.
3 See References in Text note below.
§1395w–25. Organizational and financial requirements for Medicare+Choice organizations; provider-sponsored organizations
(a) Organized and licensed under State law
(1) In general
Subject to paragraphs (2) and (3), a Medicare+Choice organization shall be organized and licensed under State law as a risk-bearing entity eligible to offer health insurance or health benefits coverage in each State in which it offers a Medicare+Choice plan.
(2) Special exception for provider-sponsored organizations
(A) In general
In the case of a provider-sponsored organization that seeks to offer a Medicare+Choice plan in a State, the Secretary shall waive the requirement of paragraph (1) that the organization be licensed in that State if—
(i) the organization files an application for such waiver with the Secretary by not later than November 1, 2002, and
(ii) the Secretary determines, based on the application and other evidence presented to the Secretary, that any of the grounds for approval of the application described in subparagraph (B), (C), or (D) has been met.
(B) Failure to act on licensure application on a timely basis
The ground for approval of such a waiver application described in this subparagraph is that the State has failed to complete action on a licensing application of the organization within 90 days of the date of the State's receipt of a substantially complete application. No period before August 5, 1997, shall be included in determining such 90-day period.
(C) Denial of application based on discriminatory treatment
The ground for approval of such a waiver application described in this subparagraph is that the State has denied such a licensing application and—
(i) the standards or review process imposed by the State as a condition of approval of the license imposes any material requirements, procedures, or standards (other than solvency requirements) to such organizations that are not generally applicable to other entities engaged in a substantially similar business, or
(ii) the State requires the organization, as a condition of licensure, to offer any product or plan other than a Medicare+Choice plan.
(D) Denial of application based on application of solvency requirements
With respect to waiver applications filed on or after the date of publication of solvency standards under
(i) such requirements are not the same as the solvency standards established under
(ii) the State has imposed as a condition of approval of the license documentation or information requirements relating to solvency or other material requirements, procedures, or standards relating to solvency that are different from the requirements, procedures, and standards applied by the Secretary under subsection (d)(2).
For purposes of this paragraph, the term "solvency requirements" means requirements relating to solvency and other matters covered under the standards established under
(E) Treatment of waiver
In the case of a waiver granted under this paragraph for a provider-sponsored organization with respect to a State—
(i) Limitation to State
The waiver shall be effective only with respect to that State and does not apply to any other State.
(ii) Limitation to 36-month period
The waiver shall be effective only for a 36-month period and may not be renewed.
(iii) Conditioned on compliance with consumer protection and quality standards
The continuation of the waiver is conditioned upon the organization's compliance with the requirements described in subparagraph (G).
(iv) Preemption of State law
Any provisions of law of that State which relate to the licensing of the organization and which prohibit the organization from providing coverage pursuant to a contract under this part shall be superseded.
(F) Prompt action on application
The Secretary shall grant or deny such a waiver application within 60 days after the date the Secretary determines that a substantially complete waiver application has been filed. Nothing in this section shall be construed as preventing an organization which has had such a waiver application denied from submitting a subsequent waiver application.
(G) Application and enforcement of State consumer protection and quality standards
(i) In general
A waiver granted under this paragraph to an organization with respect to licensing under State law is conditioned upon the organization's compliance with all consumer protection and quality standards insofar as such standards—
(I) would apply in the State to the organization if it were licensed under State law;
(II) are generally applicable to other Medicare+Choice organizations and plans in the State; and
(III) are consistent with the standards established under this part.
Such standards shall not include any standard preempted under
(ii) Incorporation into contract
In the case of such a waiver granted to an organization with respect to a State, the Secretary shall incorporate the requirement that the organization (and Medicare+Choice plans it offers) comply with standards under clause (i) as part of the contract between the Secretary and the organization under
(iii) Enforcement
In the case of such a waiver granted to an organization with respect to a State, the Secretary may enter into an agreement with the State under which the State agrees to provide for monitoring and enforcement activities with respect to compliance of such an organization and its Medicare+Choice plans with such standards. Such monitoring and enforcement shall be conducted by the State in the same manner as the State enforces such standards with respect to other Medicare+Choice organizations and plans, without discrimination based on the type of organization to which the standards apply. Such an agreement shall specify or establish mechanisms by which compliance activities are undertaken, while not lengthening the time required to review and process applications for waivers under this paragraph.
(H) Report
By not later than December 31, 2001, the Secretary shall submit to the Committee on Ways and Means and the Committee on Commerce of the House of Representatives and the Committee on Finance of the Senate a report regarding whether the waiver process under this paragraph should be continued after December 31, 2002. In making such recommendation, the Secretary shall consider, among other factors, the impact of such process on beneficiaries and on the long-term solvency of the program under this subchapter.
(3) Licensure does not substitute for or constitute certification
The fact that an organization is licensed in accordance with paragraph (1) does not deem the organization to meet other requirements imposed under this part.
(b) Assumption of full financial risk
The Medicare+Choice organization shall assume full financial risk on a prospective basis for the provision of the health care services for which benefits are required to be provided under
(1) may obtain insurance or make other arrangements for the cost of providing to any enrolled member such services the aggregate value of which exceeds such aggregate level as the Secretary specifies from time to time,
(2) may obtain insurance or make other arrangements for the cost of such services provided to its enrolled members other than through the organization because medical necessity required their provision before they could be secured through the organization,
(3) may obtain insurance or make other arrangements for not more than 90 percent of the amount by which its costs for any of its fiscal years exceed 115 percent of its income for such fiscal year, and
(4) may make arrangements with physicians or other health care professionals, health care institutions, or any combination of such individuals or institutions to assume all or part of the financial risk on a prospective basis for the provision of basic health services by the physicians or other health professionals or through the institutions.
(c) Certification of provision against risk of insolvency for unlicensed PSOs
(1) In general
Each Medicare+Choice organization that is a provider-sponsored organization, that is not licensed by a State under subsection (a), and for which a waiver application has been approved under subsection (a)(2), shall meet standards established under
(2) Certification process for solvency standards for PSOs
The Secretary shall establish a process for the receipt and approval of applications of a provider-sponsored organization described in paragraph (1) for certification (and periodic recertification) of the organization as meeting such solvency standards. Under such process, the Secretary shall act upon such a certification application not later than 60 days after the date the application has been received.
(d) "Provider-sponsored organization" defined
(1) In general
In this part, the term "provider-sponsored organization" means a public or private entity—
(A) that is established or organized, and operated, by a health care provider, or group of affiliated health care providers,
(B) that provides a substantial proportion (as defined by the Secretary in accordance with paragraph (2)) of the health care items and services under the contract under this part directly through the provider or affiliated group of providers, and
(C) with respect to which the affiliated providers share, directly or indirectly, substantial financial risk with respect to the provision of such items and services and have at least a majority financial interest in the entity.
(2) Substantial proportion
In defining what is a "substantial proportion" for purposes of paragraph (1)(B), the Secretary—
(A) shall take into account the need for such an organization to assume responsibility for providing—
(i) significantly more than the majority of the items and services under the contract under this section through its own affiliated providers; and
(ii) most of the remainder of the items and services under the contract through providers with which the organization has an agreement to provide such items and services,
in order to assure financial stability and to address the practical considerations involved in integrating the delivery of a wide range of service providers;
(B) shall take into account the need for such an organization to provide a limited proportion of the items and services under the contract through providers that are neither affiliated with nor have an agreement with the organization; and
(C) may allow for variation in the definition of substantial proportion among such organizations based on relevant differences among the organizations, such as their location in an urban or rural area.
(3) Affiliation
For purposes of this subsection, a provider is "affiliated" with another provider if, through contract, ownership, or otherwise—
(A) one provider, directly or indirectly, controls, is controlled by, or is under common control with the other,
(B) both providers are part of a controlled group of corporations under section 1563 of the Internal Revenue Code of 1986,
(C) each provider is a participant in a lawful combination under which each provider shares substantial financial risk in connection with the organization's operations, or
(D) both providers are part of an affiliated service group under section 414 of such Code.
(4) Control
For purposes of paragraph (3), control is presumed to exist if one party, directly or indirectly, owns, controls, or holds the power to vote, or proxies for, not less than 51 percent of the voting rights or governance rights of another.
(5) "Health care provider" defined
In this subsection, the term "health care provider" means—
(A) any individual who is engaged in the delivery of health care services in a State and who is required by State law or regulation to be licensed or certified by the State to engage in the delivery of such services in the State, and
(B) any entity that is engaged in the delivery of health care services in a State and that, if it is required by State law or regulation to be licensed or certified by the State to engage in the delivery of such services in the State, is so licensed.
(6) Regulations
The Secretary shall issue regulations to carry out this subsection.
(Aug. 14, 1935, ch. 531, title XVIII, §1855, as added
Editorial Notes
References in Text
The Internal Revenue Code of 1986, referred to in subsec. (d)(3)(B), (D), is classified generally to Title 26, Internal Revenue Code.
Statutory Notes and Related Subsidiaries
Change of Name
References to Medicare+Choice deemed to refer to Medicare Advantage or MA, subject to an appropriate transition provided by the Secretary of Health and Human Services in the use of those terms, see section 201 of
Committee on Commerce of House of Representatives changed to Committee on Energy and Commerce of House of Representatives, and jurisdiction over matters relating to securities and exchanges and insurance generally transferred to Committee on Financial Services of House of Representatives by House Resolution No. 5, One Hundred Seventh Congress, Jan. 3, 2001.
§1395w–26. Establishment of standards
(a) Establishment of solvency standards for provider-sponsored organizations
(1) Establishment
(A) In general
The Secretary shall establish, on an expedited basis and using a negotiated rulemaking process under subchapter III of
(B) Factors to consider for solvency standards
In establishing solvency standards under subparagraph (A) for provider-sponsored organizations, the Secretary shall consult with interested parties and shall take into account—
(i) the delivery system assets of such an organization and ability of such an organization to provide services directly to enrollees through affiliated providers,
(ii) alternative means of protecting against insolvency, including reinsurance, unrestricted surplus, letters of credit, guarantees, organizational insurance coverage, partnerships with other licensed entities, and valuation attributable to the ability of such an organization to meet its service obligations through direct delivery of care, and
(iii) any standards developed by the National Association of Insurance Commissioners specifically for risk-based health care delivery organizations.
(C) Enrollee protection against insolvency
Such standards shall include provisions to prevent enrollees from being held liable to any person or entity for the Medicare+Choice organization's debts in the event of the organization's insolvency.
(2) Publication of notice
In carrying out the rulemaking process under this subsection, the Secretary, after consultation with the National Association of Insurance Commissioners, the American Academy of Actuaries, organizations representative of medicare beneficiaries, and other interested parties, shall publish the notice provided for under
(3) Target date for publication of rule
As part of the notice under paragraph (2), and for purposes of this subsection, the "target date for publication" (referred to in section 564(a)(5) of such title) shall be April 1, 1998.
(4) Abbreviated period for submission of comments
In applying section 564(c) of such title under this subsection, "15 days" shall be substituted for "30 days".
(5) Appointment of negotiated rulemaking committee and facilitator
The Secretary shall provide for—
(A) the appointment of a negotiated rulemaking committee under section 565(a) of such title by not later than 30 days after the end of the comment period provided for under section 564(c) of such title (as shortened under paragraph (4)), and
(B) the nomination of a facilitator under section 566(c) of such title by not later than 10 days after the date of appointment of the committee.
(6) Preliminary committee report
The negotiated rulemaking committee appointed under paragraph (5) shall report to the Secretary, by not later than January 1, 1998, regarding the committee's progress on achieving a consensus with regard to the rulemaking proceeding and whether such consensus is likely to occur before 1 month before the target date for publication of the rule. If the committee reports that the committee has failed to make significant progress towards such consensus or is unlikely to reach such consensus by the target date, the Secretary may terminate such process and provide for the publication of a rule under this subsection through such other methods as the Secretary may provide.
(7) Final committee report
If the committee is not terminated under paragraph (6), the rulemaking committee shall submit a report containing a proposed rule by not later than 1 month before the target date of publication.
(8) Interim, final effect
The Secretary shall publish a rule under this subsection in the Federal Register by not later than the target date of publication. Such rule shall be effective and final immediately on an interim basis, but is subject to change and revision after public notice and opportunity for a period (of not less than 60 days) for public comment. In connection with such rule, the Secretary shall specify the process for the timely review and approval of applications of entities to be certified as provider-sponsored organizations pursuant to such rules and consistent with this subsection.
(9) Publication of rule after public comment
The Secretary shall provide for consideration of such comments and republication of such rule by not later than 1 year after the target date of publication.
(b) Establishment of other standards
(1) In general
The Secretary shall establish by regulation other standards (not described in subsection (a)) for Medicare+Choice organizations and plans consistent with, and to carry out, this part. The Secretary shall publish such regulations by June 1, 1998. In order to carry out this requirement in a timely manner, the Secretary may promulgate regulations that take effect on an interim basis, after notice and pending opportunity for public comment.
(2) Use of current standards
Consistent with the requirements of this part, standards established under this subsection shall be based on standards established under
(3) Relation to State laws
The standards established under this part shall supersede any State law or regulation (other than State licensing laws or State laws relating to plan solvency) with respect to MA plans which are offered by MA organizations under this part.
(4) Prohibition of midyear implementation of significant new regulatory requirements
The Secretary may not implement, other than at the beginning of a calendar year, regulations under this section that impose new, significant regulatory requirements on a Medicare+Choice organization or plan.
(Aug. 14, 1935, ch. 531, title XVIII, §1856, as added
Editorial Notes
Amendments
2003—Subsec. (b)(3).
2000—Subsec. (b)(3)(B)(i).
Subsec. (b)(3)(B)(iv).
Subsec. (b)(4).
Statutory Notes and Related Subsidiaries
Change of Name
References to Medicare+Choice deemed to refer to Medicare Advantage or MA, subject to an appropriate transition provided by the Secretary of Health and Human Services in the use of those terms, see section 201 of
Effective Date of 2000 Amendment
§1395w–27. Contracts with Medicare+Choice organizations
(a) In general
The Secretary shall not permit the election under
(b) Minimum enrollment requirements
(1) In general
Subject to paragraph (2), the Secretary may not enter into a contract under this section with a Medicare+Choice organization unless the organization has—
(A) at least 5,000 individuals (or 1,500 individuals in the case of an organization that is a provider-sponsored organization) who are receiving health benefits through the organization, or
(B) at least 1,500 individuals (or 500 individuals in the case of an organization that is a provider-sponsored organization) who are receiving health benefits through the organization if the organization primarily serves individuals residing outside of urbanized areas.
(2) Application to MSA plans
In applying paragraph (1) in the case of a Medicare+Choice organization that is offering an MSA plan, paragraph (1) shall be applied by substituting covered lives for individuals.
(3) Allowing transition
The Secretary may waive the requirement of paragraph (1) during the first 3 contract years with respect to an organization.
(c) Contract period and effectiveness
(1) Period
Each contract under this section shall be for a term of at least 1 year, as determined by the Secretary, and may be made automatically renewable from term to term in the absence of notice by either party of intention to terminate at the end of the current term.
(2) Termination authority
In accordance with procedures established under subsection (h), the Secretary may at any time terminate any such contract if the Secretary determines that the organization—
(A) has failed substantially to carry out the contract;
(B) is carrying out the contract in a manner inconsistent with the efficient and effective administration of this part; or
(C) no longer substantially meets the applicable conditions of this part.
(3) Effective date of contracts
The effective date of any contract executed pursuant to this section shall be specified in the contract, except that in no case shall a contract under this section which provides for coverage under an MSA plan be effective before January 1999 with respect to such coverage.
(4) Previous terminations
(A) In general
The Secretary may not enter into a contract with a Medicare+Choice organization if a previous contract with that organization under this section was terminated at the request of the organization within the preceding 2-year period, except as provided in subparagraph (B) and except in such other circumstances which warrant special consideration, as determined by the Secretary.
(B) Earlier re-entry permitted where change in payment policy
Subparagraph (A) shall not apply with respect to the offering by a Medicare+Choice organization of a Medicare+Choice plan in a Medicare+Choice payment area if during the 6-month period beginning on the date the organization notified the Secretary of the intention to terminate the most recent previous contract, there was a legislative change enacted (or a regulatory change adopted) that has the effect of increasing payment amounts under
(5) Contracting authority
The authority vested in the Secretary by this part may be performed without regard to such provisions of law or regulations relating to the making, performance, amendment, or modification of contracts of the United States as the Secretary may determine to be inconsistent with the furtherance of the purpose of this subchapter.
(d) Protections against fraud and beneficiary protections
(1) Periodic auditing
The Secretary shall provide for the annual auditing of the financial records (including data relating to medicare utilization and costs, including allowable costs under
(2) Inspection and audit
Each contract under this section shall provide that the Secretary, or any person or organization designated by the Secretary—
(A) shall have the right to timely inspect or otherwise evaluate (i) the quality, appropriateness, and timeliness of services performed under the contract, and (ii) the facilities of the organization when there is reasonable evidence of some need for such inspection, and
(B) shall have the right to timely audit and inspect any books and records of the Medicare+Choice organization that pertain (i) to the ability of the organization to bear the risk of potential financial losses, or (ii) to services performed or determinations of amounts payable under the contract.
(3) Enrollee notice at time of termination
Each contract under this section shall require the organization to provide (and pay for) written notice in advance of the contract's termination, as well as a description of alternatives for obtaining benefits under this subchapter, to each individual enrolled with the organization under this part.
(4) Disclosure
(A) In general
Each Medicare+Choice organization shall, in accordance with regulations of the Secretary, report to the Secretary financial information which shall include the following:
(i) Such information as the Secretary may require demonstrating that the organization has a fiscally sound operation.
(ii) A copy of the report, if any, filed with the Secretary containing the information required to be reported under
(iii) A description of transactions, as specified by the Secretary, between the organization and a party in interest. Such transactions shall include—
(I) any sale or exchange, or leasing of any property between the organization and a party in interest;
(II) any furnishing for consideration of goods, services (including management services), or facilities between the organization and a party in interest, but not including salaries paid to employees for services provided in the normal course of their employment and health services provided to members by hospitals and other providers and by staff, medical group (or groups), individual practice association (or associations), or any combination thereof; and
(III) any lending of money or other extension of credit between an organization and a party in interest.
The Secretary may require that information reported respecting an organization which controls, is controlled by, or is under common control with, another entity be in the form of a consolidated financial statement for the organization and such entity.
(B) "Party in interest" defined
For the purposes of this paragraph, the term "party in interest" means—
(i) any director, officer, partner, or employee responsible for management or administration of a Medicare+Choice organization, any person who is directly or indirectly the beneficial owner of more than 5 percent of the equity of the organization, any person who is the beneficial owner of a mortgage, deed of trust, note, or other interest secured by, and valuing more than 5 percent of the organization, and, in the case of a Medicare+Choice organization organized as a nonprofit corporation, an incorporator or member of such corporation under applicable State corporation law;
(ii) any entity in which a person described in clause (i)—
(I) is an officer or director;
(II) is a partner (if such entity is organized as a partnership);
(III) has directly or indirectly a beneficial interest of more than 5 percent of the equity; or
(IV) has a mortgage, deed of trust, note, or other interest valuing more than 5 percent of the assets of such entity;
(iii) any person directly or indirectly controlling, controlled by, or under common control with an organization; and
(iv) any spouse, child, or parent of an individual described in clause (i).
(C) Access to information
Each Medicare+Choice organization shall make the information reported pursuant to subparagraph (A) available to its enrollees upon reasonable request.
(5) Loan information
The contract shall require the organization to notify the Secretary of loans and other special financial arrangements which are made between the organization and subcontractors, affiliates, and related parties.
(6) Review to ensure compliance with care management requirements for specialized Medicare Advantage plans for special needs individuals
In conjunction with the periodic audit of a specialized Medicare Advantage plan for special needs individuals under paragraph (1), the Secretary shall conduct a review to ensure that such organization offering the plan meets the requirements described in
(e) Additional contract terms
(1) In general
The contract shall contain such other terms and conditions not inconsistent with this part (including requiring the organization to provide the Secretary with such information) as the Secretary may find necessary and appropriate.
(2) Cost-sharing in enrollment-related costs
(A) In general
A Medicare+Choice organization and a PDP sponsor under part D shall pay the fee established by the Secretary under subparagraph (B).
(B) Authorization
The Secretary is authorized to charge a fee to each Medicare+Choice organization with a contract under this part and each PDP sponsor with a contract under part D that is equal to the organization's or sponsor's pro rata share (as determined by the Secretary) of the aggregate amount of fees which the Secretary is directed to collect in a fiscal year. Any amounts collected shall be available without further appropriation to the Secretary for the purpose of carrying out
(C) Authorization of appropriations
There are authorized to be appropriated for the purposes described in subparagraph (B) for each fiscal year beginning with fiscal year 2001 and ending with fiscal year 2005 an amount equal to $100,000,000, and for each fiscal year beginning with fiscal year 2006 an amount equal to $200,000,000, reduced by the amount of fees authorized to be collected under this paragraph and
(D) Limitation
In any fiscal year the fees collected by the Secretary under subparagraph (B) shall not exceed the lesser of—
(i) the estimated costs to be incurred by the Secretary in the fiscal year in carrying out the activities described in
(ii)(I) $200,000,000 in fiscal year 1998;
(II) $150,000,000 in fiscal year 1999;
(III) $100,000,000 in fiscal year 2000;
(IV) the Medicare+Choice portion (as defined in subparagraph (E)) of $100,000,000 in fiscal year 2001 and each succeeding fiscal year before fiscal year 2006; and
(V) the applicable portion (as defined in subparagraph (F)) of $200,000,000 in fiscal year 2006 and each succeeding fiscal year.
(E) Medicare+Choice portion defined
In this paragraph, the term "Medicare+Choice portion" means, for a fiscal year, the ratio, as estimated by the Secretary, of—
(i) the average number of individuals enrolled in Medicare+Choice plans during the fiscal year, to
(ii) the average number of individuals entitled to benefits under part A, and enrolled under part B, during the fiscal year.
(F) Applicable portion defined
In this paragraph, the term "applicable portion" means, for a fiscal year—
(i) with respect to MA organizations, the Secretary's estimate of the total proportion of expenditures under this subchapter that are attributable to expenditures made under this part (including payments under part D that are made to such organizations); or
(ii) with respect to PDP sponsors, the Secretary's estimate of the total proportion of expenditures under this subchapter that are attributable to expenditures made to such sponsors under part D.
(3) Agreements with federally qualified health centers
(A) Payment levels and amounts
A contract under this section with an MA organization shall require the organization to provide, in any written agreement described in
(B) Cost-sharing
Under the written agreement referred to in subparagraph (A), a federally qualified health center must accept the payment amount referred to in such subparagraph plus the Federal payment provided for in
(4) Requirement for minimum medical loss ratio
If the Secretary determines for a contract year (beginning with 2014) that an MA plan has failed to have a medical loss ratio of at least .85—
(A) the MA plan shall remit to the Secretary an amount equal to the product of—
(i) the total revenue of the MA plan under this part for the contract year; and
(ii) the difference between .85 and the medical loss ratio;
(B) for 3 consecutive contract years, the Secretary shall not permit the enrollment of new enrollees under the plan for coverage during the second succeeding contract year; and
(C) the Secretary shall terminate the plan contract if the plan fails to have such a medical loss ratio for 5 consecutive contract years.
(5) Communicating plan corrective actions against opioids over-prescribers
(A) In general
Beginning with plan years beginning on or after January 1, 2021, a contract under this section with an MA organization shall require the organization to submit to the Secretary, through the process established under subparagraph (B), information on the investigations, credible evidence of suspicious activities of a provider of services (including a prescriber) or supplier related to fraud, and other actions taken by such plans related to inappropriate prescribing of opioids.
(B) Process
Not later than January 1, 2021, the Secretary shall, in consultation with stakeholders, establish a process under which MA plans and prescription drug plans shall submit to the Secretary information described in subparagraph (A).
(C) Regulations
For purposes of this paragraph, including as applied under
(i) specify a definition for the term "inappropriate prescribing" and a method for determining if a provider of services prescribes inappropriate prescribing; and
(ii) establish the process described in subparagraph (B) and the types of information that shall be submitted through such process.
(f) Prompt payment by Medicare+Choice organization
(1) Requirement
A contract under this part shall require a Medicare+Choice organization to provide prompt payment (consistent with the provisions of
(2) Secretary's option to bypass noncomplying organization
In the case of a Medicare+Choice eligible organization which the Secretary determines, after notice and opportunity for a hearing, has failed to make payments of amounts in compliance with paragraph (1), the Secretary may provide for direct payment of the amounts owed to providers and suppliers (or, in the case of a Medicare+Choice private fee-for-service plan, amounts owed to the enrollees) for covered services and supplies furnished to individuals enrolled under this part under the contract. If the Secretary provides for the direct payments, the Secretary shall provide for an appropriate reduction in the amount of payments otherwise made to the organization under this part to reflect the amount of the Secretary's payments (and the Secretary's costs in making the payments).
(3) Incorporation of certain prescription drug plan contract requirements
The following provisions shall apply to contracts with a Medicare Advantage organization offering an MA–PD plan in the same manner as they apply to contracts with a PDP sponsor offering a prescription drug plan under part D:
(A) Prompt payment
(B) Submission of claims by pharmacies located in or contracting with long-term care facilities
(C) Regular update of prescription drug pricing standard
(D) Suspension of payments pending investigation of credible allegations of fraud by pharmacies
(E) Provision of information related to maximum fair prices
(g) Intermediate sanctions
(1) In general
If the Secretary determines that a Medicare+Choice organization with a contract under this section—
(A) fails substantially to provide medically necessary items and services that are required (under law or under the contract) to be provided to an individual covered under the contract, if the failure has adversely affected (or has substantial likelihood of adversely affecting) the individual;
(B) imposes premiums on individuals enrolled under this part in excess of the amount of the Medicare+Choice monthly basic and supplemental beneficiary premiums permitted under
(C) acts to expel or to refuse to re-enroll an individual in violation of the provisions of this part;
(D) engages in any practice that would reasonably be expected to have the effect of denying or discouraging enrollment (except as permitted by this part) by eligible individuals with the organization whose medical condition or history indicates a need for substantial future medical services;
(E) misrepresents or falsifies information that is furnished—
(i) to the Secretary under this part, or
(ii) to an individual or to any other entity under this part;
(F) fails to comply with the applicable requirements of
(G) employs or contracts with any individual or entity that is excluded from participation under this subchapter under
(H) except as provided under subparagraph (C) or (D) of
(I) transfers an individual enrolled under this part from one plan to another without the prior consent of the individual or the designee of the individual or solely for the purpose of earning a commission;
(J) fails to comply with marketing restrictions described in subsections (h) and (j) of
(K) employs or contracts with any individual or entity who engages in the conduct described in subparagraphs (A) through (J) of this paragraph;
the Secretary may provide, in addition to any other remedies authorized by law, for any of the remedies described in paragraph (2). The Secretary may provide, in addition to any other remedies authorized by law, for any of the remedies described in paragraph (2), if the Secretary determines that any employee or agent of such organization, or any provider or supplier who contracts with such organization, has engaged in any conduct described in subparagraphs (A) through (K) of this paragraph.
(2) Remedies
The remedies described in this paragraph are—
(A) civil money penalties of not more than $25,000 for each determination under paragraph (1) or, with respect to a determination under subparagraph (D) or (E)(i) of such paragraph, of not more than $100,000 for each such determination, except with respect to a determination under subparagraph (E),1 an assessment of not more than the amount claimed by such plan or plan sponsor based upon the misrepresentation or falsified information involved, plus, with respect to a determination under paragraph (1)(B), double the excess amount charged in violation of such paragraph (and the excess amount charged shall be deducted from the penalty and returned to the individual concerned), and plus, with respect to a determination under paragraph (1)(D), $15,000 for each individual not enrolled as a result of the practice involved,
(B) suspension of enrollment of individuals under this part after the date the Secretary notifies the organization of a determination under paragraph (1) and until the Secretary is satisfied that the basis for such determination has been corrected and is not likely to recur, or
(C) suspension of payment to the organization under this part for individuals enrolled after the date the Secretary notifies the organization of a determination under paragraph (1) and until the Secretary is satisfied that the basis for such determination has been corrected and is not likely to recur.
(3) Other intermediate sanctions
In the case of a Medicare+Choice organization for which the Secretary makes a determination under subsection (c)(2) the basis of which is not described in paragraph (1), the Secretary may apply the following intermediate sanctions:
(A) Civil money penalties of not more than $25,000 for each determination under subsection (c)(2) if the deficiency that is the basis of the determination has directly adversely affected (or has the substantial likelihood of adversely affecting) an individual covered under the organization's contract.
(B) Civil money penalties of not more than $10,000 for each week beginning after the initiation of civil money penalty procedures by the Secretary during which the deficiency that is the basis of a determination under subsection (c)(2) exists.
(C) Suspension of enrollment of individuals under this part after the date the Secretary notifies the organization of a determination under subsection (c)(2) and until the Secretary is satisfied that the deficiency that is the basis for the determination has been corrected and is not likely to recur.
(D) Civil monetary penalties of not more than $100,000, or such higher amount as the Secretary may establish by regulation, where the finding under subsection (c)(2)(A) is based on the organization's termination of its contract under this section other than at a time and in a manner provided for under subsection (a).
(4) Civil money penalties
The provisions of section 1320a–7a (other than subsections (a) and (b)) of this title shall apply to a civil money penalty under paragraph (2) or (3) in the same manner as they apply to a civil money penalty or proceeding under
(h) Procedures for termination
(1) In general
The Secretary may terminate a contract with a Medicare+Choice organization under this section in accordance with formal investigation and compliance procedures established by the Secretary under which—
(A) the Secretary provides the organization with the reasonable opportunity to develop and implement a corrective action plan to correct the deficiencies that were the basis of the Secretary's determination under subsection (c)(2); and
(B) the Secretary provides the organization with reasonable notice and opportunity for hearing (including the right to appeal an initial decision) before terminating the contract.
(2) Exception for imminent and serious risk to health
Paragraph (1) shall not apply if the Secretary determines that a delay in termination, resulting from compliance with the procedures specified in such paragraph prior to termination, would pose an imminent and serious risk to the health of individuals enrolled under this part with the organization.
(3) Delay in contract termination authority for plans failing to achieve minimum quality rating
During the period beginning on December 13, 2016, and through the end of plan year 2018, the Secretary may not terminate a contract under this section with respect to the offering of an MA plan by a Medicare Advantage organization solely because the MA plan has failed to achieve a minimum quality rating under the 5-star rating system under
(i) Medicare+Choice program compatibility with employer or union group health plans
(1) Contracts with MA organizations
To facilitate the offering of Medicare+Choice plans under contracts between Medicare+Choice organizations and employers, labor organizations, or the trustees of a fund established by one or more employers or labor organizations (or combination thereof) to furnish benefits to the entity's employees, former employees (or combination thereof) or members or former members (or combination thereof) of the labor organizations, the Secretary may waive or modify requirements that hinder the design of, the offering of, or the enrollment in such Medicare+Choice plans.
(2) Employer sponsored MA plans
To facilitate the offering of MA plans by employers, labor organizations, or the trustees of a fund established by one or more employers or labor organizations (or combination thereof) to furnish benefits to the entity's employees, former employees (or combination thereof) or members or former members (or combination thereof) of the labor organizations, the Secretary may waive or modify requirements that hinder the design of, the offering of, or the enrollment in such MA plans. Notwithstanding
(Aug. 14, 1935, ch. 531, title XVIII, §1857, as added
Editorial Notes
Amendments
2022—Subsec. (f)(3)(E).
2018—Subsec. (e)(5).
Subsec. (f)(3)(D).
2016—Subsec. (h)(3).
2010—Subsec. (d)(2)(A).
Subsec. (d)(2)(B).
Subsec. (e)(4).
Subsec. (g)(1).
Subsec. (g)(1)(H) to (K).
Subsec. (g)(2)(A).
2008—Subsec. (d)(6).
Subsec. (f)(3).
Subsec. (f)(3)(B).
Subsec. (f)(3)(C).
2003—Subsec. (d)(1).
Subsec. (d)(4)(A)(ii).
Subsec. (e)(2)(A).
Subsec. (e)(2)(B).
Subsec. (e)(2)(C).
Subsec. (e)(2)(D)(i).
Subsec. (e)(2)(D)(ii)(III).
Subsec. (e)(2)(D)(ii)(IV).
Subsec. (e)(2)(D)(ii)(V).
Subsec. (e)(2)(F).
Subsec. (e)(3).
Subsec. (i).
2000—Subsec. (g)(3)(D).
Subsec. (i).
1999—Subsec. (c)(4).
Subsec. (e)(2)(B).
Subsec. (e)(2)(C).
Subsec. (e)(2)(D)(ii)(II).
Subsec. (e)(2)(D)(ii)(III).
Subsec. (e)(2)(D)(ii)(IV).
Subsec. (e)(2)(E).
Statutory Notes and Related Subsidiaries
Change of Name
References to Medicare+Choice deemed to refer to Medicare Advantage or MA, subject to an appropriate transition provided by the Secretary of Health and Human Services in the use of those terms, see section 201 of
Effective Date of 2018 Amendment
Effective Date of 2010 Amendment
Amendment by section 6408(b)(1) of
Effective Date of 2008 Amendment
Effective Date of 2003 Amendment
Amendment by section 222(j), (k), (l)(3)(C) of
Amendment by section 237(c) of
Effective Date of 2000 Amendment
Effective Date of 1999 Amendment
Construction Relating to Additional Exceptions
Delay in Authority To Terminate Contracts for Medicare Advantage Plans Failing To Achieve Minimum Quality Ratings
"(1) to continue to study and request input on the effects of socioeconomic status and dual-eligible populations on the Medicare Advantage STARS rating system before reforming such system with the input of stakeholders; and
"(2) pending the results of such studies and input, to provide for a temporary delay in authority of the Centers for Medicare & Medicaid Services (CMS) to terminate Medicare Advantage plan contracts solely on the basis of performance of plans under the STARS rating system."
Technical Correction to MA Private Fee-for-Service Plans
Study of Multi-Year Contracts
Immediate Effective Date for Certain Requirements for Demonstrations
1 So in original. Probably means subpar. (E) of par. (1).
§1395w–27a. Special rules for MA regional plans
(a) Regional service area; establishment of MA regions
(1) Coverage of entire MA region
The service area for an MA regional plan shall consist of an entire MA region established under paragraph (2) and the provisions of
(2) Establishment of MA regions
(A) MA region
For purposes of this subchapter, the term "MA region" means such a region within the 50 States and the District of Columbia as established by the Secretary under this paragraph.
(B) Establishment
(i) Initial establishment
Not later than January 1, 2005, the Secretary shall first establish and publish MA regions.
(ii) Periodic review and revision of service areas
The Secretary may periodically review MA regions under this paragraph and, based on such review, may revise such regions if the Secretary determines such revision to be appropriate.
(C) Requirements for MA regions
The Secretary shall establish, and may revise, MA regions under this paragraph in a manner consistent with the following:
(i) Number of regions
There shall be no fewer than 10 regions, and no more than 50 regions.
(ii) Maximizing availability of plans
The regions shall maximize the availability of MA regional plans to all MA eligible individuals without regard to health status, especially those residing in rural areas.
(D) Market survey and analysis
Before establishing MA regions, the Secretary shall conduct a market survey and analysis, including an examination of current insurance markets, to determine how the regions should be established.
(3) National plan
Nothing in this subsection shall be construed as preventing an MA regional plan from being offered in more than one MA region (including all regions).
(b) Application of single deductible and catastrophic limit on out-of-pocket expenses
An MA regional plan shall include the following:
(1) Single deductible
Any deductible for benefits under the original medicare fee-for-service program option shall be a single deductible (instead of a separate inpatient hospital deductible and a part B deductible) and may be applied differentially for in-network services and may be waived for preventive or other items and services.
(2) Catastrophic limit
(A) In-network
A catastrophic limit on out-of-pocket expenditures for in-network benefits under the original medicare fee-for-service program option.
(B) Total
A catastrophic limit on out-of-pocket expenditures for all benefits under the original medicare fee-for-service program option.
(c) Portion of total payments to an organization subject to risk for 2006 and 2007
(1) Application of risk corridors
(A) In general
This subsection shall only apply to MA regional plans offered during 2006 or 2007.
(B) Notification of allowable costs under the plan
In the case of an MA organization that offers an MA regional plan in an MA region in 2006 or 2007, the organization shall notify the Secretary, before such date in the succeeding year as the Secretary specifies, of—
(i) its total amount of costs that the organization incurred in providing benefits covered under the original medicare fee-for-service program option for all enrollees under the plan in the region in the year and the portion of such costs that is attributable to administrative expenses described in subparagraph (C); and
(ii) its total amount of costs that the organization incurred in providing rebatable integrated benefits (as defined in subparagraph (D)) and with respect to such benefits the portion of such costs that is attributable to administrative expenses described in subparagraph (C) and not described in clause (i) of this subparagraph.
(C) Allowable costs defined
For purposes of this subsection, the term "allowable costs" means, with respect to an MA regional plan for a year, the total amount of costs described in subparagraph (B) for the plan and year, reduced by the portion of such costs attributable to administrative expenses incurred in providing the benefits described in such subparagraph.
(D) Rebatable integrated benefits
For purposes of this subsection, the term "rebatable integrated benefits" means such non-drug supplemental benefits under subclause (I) of
(2) Adjustment of payment
(A) No adjustment if allowable costs within 3 percent of target amount
If the allowable costs for the plan for the year are at least 97 percent, but do not exceed 103 percent, of the target amount for the plan and year, there shall be no payment adjustment under this subsection for the plan and year.
(B) Increase in payment if allowable costs above 103 percent of target amount
(i) Costs between 103 and 108 percent of target amount
If the allowable costs for the plan for the year are greater than 103 percent, but not greater than 108 percent, of the target amount for the plan and year, the Secretary shall increase the total of the monthly payments made to the organization offering the plan for the year under
(ii) Costs above 108 percent of target amount
If the allowable costs for the plan for the year are greater than 108 percent of the target amount for the plan and year, the Secretary shall increase the total of the monthly payments made to the organization offering the plan for the year under
(I) 2.5 percent of such target amount; and
(II) 80 percent of the difference between such allowable costs and 108 percent of such target amount.
(C) Reduction in payment if allowable costs below 97 percent of target amount
(i) Costs between 92 and 97 percent of target amount
If the allowable costs for the plan for the year are less than 97 percent, but greater than or equal to 92 percent, of the target amount for the plan and year, the Secretary shall reduce the total of the monthly payments made to the organization offering the plan for the year under
(ii) Costs below 92 percent of target amount
If the allowable costs for the plan for the year are less than 92 percent of the target amount for the plan and year, the Secretary shall reduce the total of the monthly payments made to the organization offering the plan for the year under
(I) 2.5 percent of such target amount; and
(II) 80 percent of the difference between 92 percent of such target amount and such allowable costs.
(D) Target amount described
For purposes of this paragraph, the term "target amount" means, with respect to an MA regional plan offered by an organization in a year, an amount equal to—
(i) the sum of—
(I) the total monthly payments made to the organization for enrollees in the plan for the year that are attributable to benefits under the original medicare fee-for-service program option (as defined in
(II) the total of the MA monthly basic beneficiary premium collectable for such enrollees for the year; and
(III) the total amount of the rebates under
(ii) the amount of administrative expenses assumed in the bid insofar as the bid is attributable to benefits described in clause (i)(I) or (i)(III).
(3) Disclosure of information
(A) In general
Each contract under this part shall provide—
(i) that an MA organization offering an MA regional plan shall provide the Secretary with such information as the Secretary determines is necessary to carry out this subsection; and
(ii) that, pursuant to
(B) Restriction on use of information
Information disclosed or obtained pursuant to the provisions of this subsection may be used by officers, employees, and contractors of the Department of Health and Human Services only for the purposes of, and to the extent necessary in, carrying out this subsection.
(d) Organizational and financial requirements
(1) In general
In the case of an MA organization that is offering an MA regional plan in an MA region and—
(A) meets the requirements of
(B) with respect to each other State in such region in which it does not meet requirements, it demonstrates to the satisfaction of the Secretary that it has filed the necessary application to meet such requirements,
the Secretary may waive such requirement with respect to each State described in subparagraph (B) for such period of time as the Secretary determines appropriate for the timely processing of such an application by the State (and, if such application is denied, through the end of such plan year as the Secretary determines appropriate to provide for a transition).
(2) Selection of appropriate State
In applying paragraph (1) in the case of an MA organization that meets the requirements of
(e) Repealed. Pub. L. 111–148, title X, §10327(c)(1), Mar. 23, 2010, 124 Stat. 964
(f) Computation of applicable MA region-specific non-drug monthly benchmark amounts
(1) Computation for regions
For purposes of
(2) 2 components
For purposes of paragraph (1), the 2 components described in this paragraph for an MA region and a year are the following:
(A) Statutory component
The product of the following:
(i) Statutory region-specific non-drug amount
The statutory region-specific non-drug amount (as defined in paragraph (3)) for the region and year.
(ii) Statutory national market share
The statutory national market share percentage, determined under paragraph (4) for the year.
(B) Plan-bid component
The product of the following:
(i) Weighted average of MA plan bids in region
The weighted average of the plan bids for the region and year (as determined under paragraph (5)(A)).
(ii) Non-statutory market share
1 minus the statutory national market share percentage, determined under paragraph (4) for the year.
(3) Statutory region-specific non-drug amount
For purposes of paragraph (2)(A)(i), the term "statutory region-specific non-drug amount" means, for an MA region and year, an amount equal the sum (for each MA local area within the region) of the product of—
(A) MA area-specific non-drug monthly benchmark amount under
(B) the number of MA eligible individuals residing in the local area, divided by the total number of MA eligible individuals residing in the region.
(4) Computation of statutory market share percentage
(A) In general
The Secretary shall determine for each year a statutory national market share percentage that is equal to the proportion of MA eligible individuals nationally who were not enrolled in an MA plan during the reference month.
(B) Reference month defined
For purposes of this part, the term "reference month" means, with respect to a year, the most recent month during the previous year for which the Secretary determines that data are available to compute the percentage specified in subparagraph (A) and other relevant percentages under this part.
(5) Determination of weighted average MA bids for a region
(A) In general
For purposes of paragraph (2)(B)(i), the weighted average of plan bids for an MA region and a year is the sum, for MA regional plans described in subparagraph (D) in the region and year, of the products (for each such plan) of the following:
(i) Monthly MA statutory non-drug bid amount
The unadjusted MA statutory non-drug monthly bid amount for the plan.
(ii) Plan's share of MA enrollment in region
The factor described in subparagraph (B) for the plan.
(B) Plan's share of MA enrollment in region
(i) In general
Subject to the succeeding provisions of this subparagraph, the factor described in this subparagraph for a plan is equal to the number of individuals described in subparagraph (C) for such plan, divided by the total number of such individuals for all MA regional plans described in subparagraph (D) for that region and year.
(ii) Single plan rule
In the case of an MA region in which only a single MA regional plan is being offered, the factor described in this subparagraph shall be equal to 1.
(iii) Equal division among multiple plans in year in which plans are first available
In the case of an MA region in the first year in which any MA regional plan is offered, if more than one MA regional plan is offered in such year, the factor described in this subparagraph for a plan shall (as specified by the Secretary) be equal to—
(I) 1 divided by the number of such plans offered in such year; or
(II) a factor for such plan that is based upon the organization's estimate of projected enrollment, as reviewed and adjusted by the Secretary to ensure reasonableness and as is certified by the Chief Actuary of the Centers for Medicare & Medicaid Services.
(C) Counting of individuals
For purposes of subparagraph (B)(i), the Secretary shall count for each MA regional plan described in subparagraph (D) for an MA region and year, the number of individuals who reside in the region and who were enrolled under such plan under this part during the reference month.
(D) Plans covered
For an MA region and year, an MA regional plan described in this subparagraph is an MA regional plan that is offered in the region and year and was offered in the region in the reference month.
(g) Election of uniform coverage determination
Instead of applying
(h) Assuring network adequacy
(1) In general
For purposes of enabling MA organizations that offer MA regional plans to meet applicable provider access requirements under
(A) the organization provides assurances satisfactory to the Secretary that the organization will make payment to the hospital for inpatient hospital services of an amount that is not less than the amount that would be payable to the hospital under
(B) with respect to specific inpatient hospital services provided to an enrollee, the hospital demonstrates to the satisfaction of the Secretary that the hospital's costs of such services exceed the payment amount described in subparagraph (A).
(2) Payment amounts
The payment amount under this subsection for inpatient hospital services provided by a subsection (d) hospital to an enrollee in an MA regional plan shall be, subject to the limitation of funds under paragraph (3), the amount (if any) by which—
(A) the amount of payment that would have been paid for such services under this subchapter if the enrollees were covered under the original medicare fee-for-service program option and the hospital were a critical access hospital; exceeds
(B) the amount of payment made for such services under paragraph (1)(A).
(3) Available amounts
There shall be available for payments under this subsection—
(A) in 2006, $25,000,000; and
(B) in each succeeding year the amount specified in this paragraph for the preceding year increased by the market basket percentage increase (as defined in
Payments under this subsection shall be made from the Federal Hospital Insurance Trust Fund.
(4) Essential hospital
In this subsection, the term "essential hospital" means, with respect to an MA regional plan offered by an MA organization, a subsection (d) hospital (as defined in
(Aug. 14, 1935, ch. 531, title XVIII, §1858, as added
Editorial Notes
Amendments
2010—Subsec. (e).
Subsec. (f)(1).
Subsec. (f)(3)(A).
Subsec. (i).
2009—Subsec. (e)(7).
2008—Subsec. (e)(2)(A)(i).
2007—Subsec. (e)(2)(A)(i).
"(I) during 2012, $1,600,000,000; and
"(II) during 2013, $1,790,000,000."
to reflect the probable intent of Congress.
"(I) during 2012, $1,600,000,000; and
"(II) during 2013, $1,790,000,000."
for "the Fund during the period beginning on January 1, 2012, and ending on December 31, 2013, a total of $3,500,000,000."
2006—Subsec. (e)(2)(A)(i).
Statutory Notes and Related Subsidiaries
Effective Date of 2010 Amendment
Repeal of sections 3201 and 3203 of
Effective Date
Section applicable with respect to plan years beginning on or after Jan. 1, 2006, see section 223(a) of
Elimination of MA Regional Plan Stabilization Fund; Transition
§1395w–28. Definitions; miscellaneous provisions
(a) Definitions relating to Medicare+Choice organizations
In this part—
(1) Medicare+Choice organization
The term "Medicare+Choice organization" means a public or private entity that is certified under
(2) Provider-sponsored organization
The term "provider-sponsored organization" is defined in
(b) Definitions relating to Medicare+Choice plans
(1) Medicare+Choice plan
The term "Medicare+Choice plan" means health benefits coverage offered under a policy, contract, or plan by a Medicare+Choice organization pursuant to and in accordance with a contract under
(2) Medicare+Choice private fee-for-service plan
The term "Medicare+Choice private fee-for-service plan" means a Medicare+Choice plan that—
(A) reimburses hospitals, physicians, and other providers at a rate determined by the plan on a fee-for-service basis without placing the provider at financial risk;
(B) does not vary such rates for such a provider based on utilization relating to such provider; and
(C) does not restrict the selection of providers among those who are lawfully authorized to provide the covered services and agree to accept the terms and conditions of payment established by the plan.
Nothing in subparagraph (B) shall be construed to preclude a plan from varying rates for such a provider based on the specialty of the provider, the location of the provider, or other factors related to such provider that are not related to utilization, or to preclude a plan from increasing rates for such a provider based on increased utilization of specified preventive or screening services.
(3) MSA plan
(A) In general
The term "MSA plan" means a Medicare+Choice plan that—
(i) provides reimbursement for at least the items and services described in
(ii) counts as such expenses (for purposes of such deductible) at least all amounts that would have been payable under parts A and B, and that would have been payable by the enrollee as deductibles, coinsurance, or copayments, if the enrollee had elected to receive benefits through the provisions of such parts; and
(iii) provides, after such deductible is met for a year and for all subsequent expenses for items and services referred to in clause (i) in the year, for a level of reimbursement that is not less than—
(I) 100 percent of such expenses, or
(II) 100 percent of the amounts that would have been paid (without regard to any deductibles or coinsurance) under parts A and B with respect to such expenses,
whichever is less.
(B) Deductible
The amount of annual deductible under an MSA plan—
(i) for contract year 1999 shall be not more than $6,000; and
(ii) for a subsequent contract year shall be not more than the maximum amount of such deductible for the previous contract year under this subparagraph increased by the national per capita Medicare+Choice growth percentage under
If the amount of the deductible under clause (ii) is not a multiple of $50, the amount shall be rounded to the nearest multiple of $50.
(4) MA regional plan
The term "MA regional plan" means an MA plan described in
(A) that has a network of providers that have agreed to a contractually specified reimbursement for covered benefits with the organization offering the plan;
(B) that provides for reimbursement for all covered benefits regardless of whether such benefits are provided within such network of providers; and
(C) the service area of which is one or more entire MA regions.
(5) MA local plan
The term "MA local plan" means an MA plan that is not an MA regional plan.
(6) Specialized MA plans for special needs individuals
(A) In general
The term "specialized MA plan for special needs individuals" means an MA plan that exclusively serves special needs individuals (as defined in subparagraph (B)) and that, as of January 1, 2010, meets the applicable requirements of paragraph (2), (3), or (4) of subsection (f), as the case may be.
(B) Special needs individual
The term "special needs individual" means an MA eligible individual who—
(i) is institutionalized (as defined by the Secretary);
(ii) is entitled to medical assistance under a State plan under subchapter XIX; or
(iii) meets such requirements as the Secretary may determine would benefit from enrollment in such a specialized MA plan described in subparagraph (A) for individuals with severe or disabling chronic conditions who—
(I) before January 1, 2022, have one or more comorbid and medically complex chronic conditions that are substantially disabling or life threatening, have a high risk of hospitalization or other significant adverse health outcomes, and require specialized delivery systems across domains of care; and
(II) on or after January 1, 2022, have one or more comorbid and medically complex chronic conditions that is life threatening or significantly limits 1 overall health or function, have a high risk of hospitalization or other adverse health outcomes, and require intensive care coordination and that is listed under subsection (f)(9)(A).
The Secretary may apply rules similar to the rules of
(c) Other references to other terms
(1) Medicare+Choice eligible individual
The term "Medicare+Choice eligible individual" is defined in
(2) Medicare+Choice payment area
The term "Medicare+Choice payment area" is defined in
(3) National per capita Medicare+Choice growth percentage
The "national per capita Medicare+Choice growth percentage" is defined in
(4) Medicare+Choice monthly basic beneficiary premium; Medicare+Choice monthly supplemental beneficiary premium
The terms "Medicare+Choice monthly basic beneficiary premium" and "Medicare+Choice monthly supplemental beneficiary premium" are defined in
(5) MA local area
The term "MA local area" is defined in
(d) Coordinated acute and long-term care benefits under Medicare+Choice plan
Nothing in this part shall be construed as preventing a State from coordinating benefits under a medicaid plan under subchapter XIX with those provided under a Medicare+Choice plan in a manner that assures continuity of a full-range of acute care and long-term care services to poor elderly or disabled individuals eligible for benefits under this subchapter and under such plan.
(e) Restriction on enrollment for certain Medicare+Choice plans
(1) In general
In the case of a Medicare+Choice religious fraternal benefit society plan described in paragraph (2), notwithstanding any other provision of this part to the contrary and in accordance with regulations of the Secretary, the society offering the plan may restrict the enrollment of individuals under this part to individuals who are members of the church, convention, or group described in paragraph (3)(B) with which the society is affiliated.
(2) Medicare+Choice religious fraternal benefit society plan described
For purposes of this subsection, a Medicare+Choice religious fraternal benefit society plan described in this paragraph is a Medicare+Choice plan described in
(A) is offered by a religious fraternal benefit society described in paragraph (3) only to members of the church, convention, or group described in paragraph (3)(B); and
(B) permits all such members to enroll under the plan without regard to health status-related factors.
Nothing in this subsection shall be construed as waiving any plan requirements relating to financial solvency.
(3) "Religious fraternal benefit society" defined
For purposes of paragraph (2)(A), a "religious fraternal benefit society" described in this section is an organization that—
(A) is described in section 501(c)(8) of the Internal Revenue Code of 1986 and is exempt from taxation under section 501(a) of such Act;
(B) is affiliated with, carries out the tenets of, and shares a religious bond with, a church or convention or association of churches or an affiliated group of churches;
(C) offers, in addition to a Medicare+Choice religious fraternal benefit society plan, health coverage to individuals not entitled to benefits under this subchapter who are members of such church, convention, or group; and
(D) does not impose any limitation on membership in the society based on any health status-related factor.
(4) Payment adjustment
Under regulations of the Secretary, in the case of individuals enrolled under this part under a Medicare+Choice religious fraternal benefit society plan described in paragraph (2), the Secretary shall provide for such adjustment to the payment amounts otherwise established under
(f) Requirements regarding enrollment in specialized MA plans for special needs individuals
(1) Requirements for enrollment
In the case of a specialized MA plan for special needs individuals (as defined in subsection (b)(6)), notwithstanding any other provision of this part and in accordance with regulations of the Secretary, the plan may restrict the enrollment of individuals under the plan to individuals who are within one or more classes of special needs individuals.
(2) Additional requirements for institutional SNPS
In the case of a specialized MA plan for special needs individuals described in subsection (b)(6)(B)(i), the applicable requirements described in this paragraph are as follows:
(A) Each individual that enrolls in the plan on or after January 1, 2010, is a special needs individuals described in subsection (b)(6)(B)(i). In the case of an individual who is living in the community but requires an institutional level of care, such individual shall not be considered a special needs individual described in subsection (b)(6)(B)(i) unless the determination that the individual requires an institutional level of care was made—
(i) using a State assessment tool of the State in which the individual resides; and
(ii) by an entity other than the organization offering the plan.
(B) The plan meets the requirements described in paragraph (5).
(C) If applicable, the plan meets the requirement described in paragraph (7).
(3) Additional requirements for dual SNPS
In the case of a specialized MA plan for special needs individuals described in subsection (b)(6)(B)(ii), the applicable requirements described in this paragraph are as follows:
(A) Each individual that enrolls in the plan on or after January 1, 2010, is a special needs individuals 2 described in subsection (b)(6)(B)(ii).
(B) The plan meets the requirements described in paragraph (5).
(C) The plan provides each prospective enrollee, prior to enrollment, with a comprehensive written statement (using standardized content and format established by the Secretary) that describes—
(i) the benefits and cost-sharing protections that the individual is entitled to under the State Medicaid program under subchapter XIX; and
(ii) which of such benefits and cost-sharing protections are covered under the plan.
Such statement shall be included with any description of benefits offered by the plan.
(D) The plan has a contract with the State Medicaid agency to provide benefits, or arrange for benefits to be provided, for which such individual is entitled to receive as medical assistance under subchapter XIX. Such benefits may include long-term care services consistent with State policy.
(E) If applicable, the plan meets the requirement described in paragraph (7).
(F) The plan meets the requirements applicable under paragraph (8).
(4) Additional requirements for severe or disabling chronic condition SNPS
In the case of a specialized MA plan for special needs individuals described in subsection (b)(6)(B)(iii), the applicable requirements described in this paragraph are as follows:
(A) Each individual that enrolls in the plan on or after January 1, 2010, is a special needs individual described in subsection (b)(6)(B)(iii).
(B) The plan meets the requirements described in paragraph (5).
(C) If applicable, the plan meets the requirement described in paragraph (7).
(5) Care management requirements for all SNPs
(A) In general
Subject to subparagraph (B), the requirements described in this paragraph are that the organization offering a specialized MA plan for special needs individuals—
(i) have in place an evidenced-based model of care with appropriate networks of providers and specialists; and
(ii) with respect to each individual enrolled in the plan—
(I) conduct an initial assessment and an annual reassessment of the individual's physical, psychosocial, and functional needs;
(II) develop a plan, in consultation with the individual as feasible, that identifies goals and objectives, including measurable outcomes as well as specific services and benefits to be provided; and
(III) use an interdisciplinary team in the management of care.
(B) Improvements to care management requirements for severe or disabling chronic condition SNPs
For 2020 and subsequent years, in the case of a specialized MA plan for special needs individuals described in subsection (b)(6)(B)(iii), the requirements described in this paragraph include the following:
(i) The interdisciplinary team under subparagraph (A)(ii)(III) includes a team of providers with demonstrated expertise, including training in an applicable specialty, in treating individuals similar to the targeted population of the plan.
(ii) Requirements developed by the Secretary to provide face-to-face encounters with individuals enrolled in the plan not less frequently than on an annual basis.
(iii) As part of the model of care under clause (i) of subparagraph (A), the results of the initial assessment and annual reassessment under clause (ii)(I) of such subparagraph of each individual enrolled in the plan are addressed in the individual's individualized care plan under clause (ii)(II) of such subparagraph.
(iv) As part of the annual evaluation and approval of such model of care, the Secretary shall take into account whether the plan fulfilled the previous year's goals (as required under the model of care).
(v) The Secretary shall establish a minimum benchmark for each element of the model of care of a plan. The Secretary shall only approve a plan's model of care under this paragraph if each element of the model of care meets the minimum benchmark applicable under the preceding sentence.
(6) Transition and exception regarding restriction on enrollment
(A) In general
Subject to subparagraph (C), the Secretary shall establish procedures for the transition of applicable individuals to—
(i) a Medicare Advantage plan that is not a specialized MA plan for special needs individuals (as defined in subsection (b)(6)); or
(ii) the original medicare fee-for-service program under parts A and B.
(B) Applicable individuals
For purposes of clause (i), the term "applicable individual" means an individual who—
(i) is enrolled under a specialized MA plan for special needs individuals (as defined in subsection (b)(6)); and
(ii) is not within the 1 or more of the classes of special needs individuals to which enrollment under the plan is restricted to.
(C) Exception
The Secretary shall provide for an exception to the transition described in subparagraph (A) for a limited period of time for individuals enrolled under a specialized MA plan for special needs individuals described in subsection (b)(6)(B)(ii) who are no longer eligible for medical assistance under subchapter XIX.
(D) Timeline for initial transition
The Secretary shall ensure that applicable individuals enrolled in a specialized MA plan for special needs individuals (as defined in subsection (b)(6)) prior to January 1, 2010, are transitioned to a plan or the program described in subparagraph (A) by not later than January 1, 2013.
(7) Authority to require special needs plans be NCQA approved
For 2012 and subsequent years, the Secretary shall require that a Medicare Advantage organization offering a specialized MA plan for special needs individuals be approved by the National Committee for Quality Assurance (based on standards established by the Secretary).
(8) Increased integration of dual SNPs
(A) Designated contact
The Secretary, acting through the Federal Coordinated Health Care Office established under
(i) a uniform process for disseminating to State Medicaid agencies information under this subchapter impacting contracts between such agencies and such plans under this subsection; and
(ii) basic resources for States interested in exploring such plans as a platform for integration, such as a model contract or other tools to achieve those goals.
(B) Unified grievances and appeals process
(i) In general
Not later than April 1, 2020, the Secretary shall establish procedures, to the extent feasible as determined by the Secretary, unifying grievances and appeals procedures under
(ii) Procedures
The procedures established under clause (i) shall be included in the plan contract under paragraph (3)(D) and shall—
(I) adopt the provisions for the enrollee that are most protective for the enrollee and, to the extent feasible as determined by the Secretary, are compatible with unified timeframes and consolidated access to external review under an integrated process;
(II) take into account differences in State plans under subchapter XIX to the extent necessary;
(III) be easily navigable by an enrollee; and
(IV) include the elements described in clause (iii), as applicable.
(iii) Elements described
Both unified appeals and unified grievance procedures shall include, as applicable, the following elements described in this clause:
(I) Single written notification of all applicable grievances and appeal rights under this subchapter and subchapter XIX. For purposes of this subparagraph, the Secretary may waive the requirements under
(II) Single pathways for resolution of any grievance or appeal related to a particular item or service provided by specialized MA plans for special needs individuals described in subsection (b)(6)(B)(ii) under this subchapter and subchapter XIX.
(III) Notices written in plain language and available in a language and format that is accessible to the enrollee, including in non-English languages that are prevalent in the service area of the specialized MA plan.
(IV) Unified timeframes for grievances and appeals processes, such as an individual's filing of a grievance or appeal, a plan's acknowledgment and resolution of a grievance or appeal, and notification of decisions with respect to a grievance or appeal.
(V) Requirements for how the plan must process, track, and resolve grievances and appeals, to ensure beneficiaries are notified on a timely basis of decisions that are made throughout the grievance or appeals process and are able to easily determine the status of a grievance or appeal.
(iv) Continuation of benefits pending appeal
The unified procedures under clause (i) shall, with respect to all benefits under parts A and B and subchapter XIX subject to appeal under such procedures, incorporate provisions under current law and implementing regulations that provide continuation of benefits pending appeal under this subchapter and subchapter XIX.
(C) Requirement for unified grievances and appeals
For 2021 and subsequent years, the contract of a specialized MA plan for special needs individuals described in subsection (b)(6)(B)(ii) with a State Medicaid agency under paragraph (3)(D) shall require the use of unified grievances and appeals procedures as described in subparagraph (B).
(D) Requirements for integration
(i) In general
For 2021 and subsequent years, a specialized MA plan for special needs individuals described in subsection (b)(6)(B)(ii) shall meet one or more of the following requirements, to the extent permitted under State law, for integration of benefits under this subchapter and subchapter XIX:
(I) The specialized MA plan must meet the requirements of contracting with the State Medicaid agency described in paragraph (3)(D) in addition to coordinating long-term services and supports or behavioral health services, or both, by meeting an additional minimum set of requirements determined by the Secretary through the Federal Coordinated Health Care Office established under
(II) The specialized MA plan must meet the requirements of a fully integrated plan described in
(III) In the case of a specialized MA plan that is offered by a parent organization that is also the parent organization of a Medicaid managed care organization providing long term services and supports or behavioral services under a contract under
(ii) Suspension of enrollment for failure to meet requirements during initial period
During the period of plan years 2021 through 2025, if the Secretary determines that a specialized MA plan for special needs individuals described in subsection (b)(6)(B)(ii) has failed to comply with clause (i), the Secretary may provide for the application against the Medicare Advantage organization offering the plan of the remedy described in
(E) Study and report to Congress
(i) In general
Not later than March 15, 2022, and, subject to clause (iii), biennially thereafter through 2032, the Medicare Payment Advisory Commission established under
(I) A comparison group of such plans that are described in subparagraph (D)(i)(I).
(II) A comparison group of such plans that are described in subparagraph (D)(i)(II).
(III) A comparison group of such plans operating within the Financial Alignment Initiative demonstration for the period for which such plan is so operating and the demonstration is in effect, and, in the case that an integration option that is not with respect to specialized MA plans for special needs individuals is established after the conclusion of the demonstration involved.
(IV) A comparison group of such plans that are described in subparagraph (D)(i)(III).
(V) A comparison group of MA plans, as feasible, not described in a previous subclause of this clause, with respect to the performance of such plans for enrollees who are special needs individuals described in subsection (b)(6)(B)(ii).
(ii) Additional reports
Beginning with 2033 and every five years thereafter, the Medicare Payment Advisory Commission, in consultation with the Medicaid and CHIP Payment and Access Commission, shall conduct a study described in clause (i).
(9) List of conditions for clarification of the definition of a severe or disabling chronic conditions specialized needs individual
(A) In general
Not later than December 31, 2020, and every 5 years thereafter, subject to subparagraphs (B) and (C), the Secretary shall convene a panel of clinical advisors to establish and update a list of conditions that meet each of the following criteria:
(i) Conditions that meet the definition of a severe or disabling chronic condition under subsection (b)(6)(B)(iii) on or after January 1, 2022.
(ii) Conditions that require prescription drugs, providers, and models of care that are unique to the specific population of enrollees in a specialized MA plan for special needs individuals described in such subsection on or after such date and—
(I) as a result of access to, and enrollment in, such a specialized MA plan for special needs individuals, individuals with such condition would have a reasonable expectation of slowing or halting the progression of the disease, improving health outcomes and decreasing overall costs for individuals diagnosed with such condition compared to available options of care other than through such a specialized MA plan for special needs individuals; or
(II) have a low prevalence in the general population of beneficiaries under this subchapter or a disproportionally high per-beneficiary cost under this subchapter.
(B) Inclusion of certain conditions
The conditions listed under subparagraph (A) shall include HIV/AIDS, end stage renal disease, and chronic and disabling mental illness.
(C) Requirement
In establishing and updating the list under subparagraph (A), the panel shall take into account the availability of varied benefits, cost-sharing, and supplemental benefits under the model described in paragraph (2) of
(g) Special rules for senior housing facility plans
(1) In general
In the case of a Medicare Advantage senior housing facility plan described in paragraph (2), notwithstanding any other provision of this part to the contrary and in accordance with regulations of the Secretary, the service area of such plan may be limited to a senior housing facility in a geographic area.
(2) Medicare Advantage senior housing facility plan described
For purposes of this subsection, a Medicare Advantage senior housing facility plan is a Medicare Advantage plan that—
(A) restricts enrollment of individuals under this part to individuals who reside in a continuing care retirement community (as defined in
(B) provides primary care services onsite and has a ratio of accessible physicians to beneficiaries that the Secretary determines is adequate;
(C) provides transportation services for beneficiaries to specialty providers outside of the facility; and
(D) has participated (as of December 31, 2009) in a demonstration project established by the Secretary under which such a plan was offered for not less than 1 year.
(h) National testing of Medicare Advantage Value-Based Insurance Design model
(1) In general
In implementing the Medicare Advantage Value-Based Insurance Design model that is being tested under
(2) Termination and modification provision not applicable until January 1, 2022
The provisions of
(3) Funding
The Secretary shall allocate funds made available under
(i) Program integrity transparency measures
(1) Program integrity portal
(A) In general
Not later than 2 years after October 24, 2018, the Secretary shall, after consultation with stakeholders, establish a secure internet website portal (or other successor technology) that would allow a secure path for communication between the Secretary, MA plans under this part, prescription drug plans under part D, and an eligible entity with a contract under
(i) the referral by such plans of substantiated or suspicious activities, as defined by the Secretary, of a provider of services (including a prescriber) or supplier related to fraud, waste, and abuse for initiating or assisting investigations conducted by the eligible entity; and
(ii) data sharing among such MA plans, prescription drug plans, and the Secretary.
(B) Required uses of portal
The Secretary shall disseminate the following information to MA plans under this part and prescription drug plans under part D through the secure internet website portal (or other successor technology) established under subparagraph (A):
(i) Providers of services and suppliers that have been referred pursuant to subparagraph (A)(i) during the previous 12-month period.
(ii) Providers of services and suppliers who are the subject of an active exclusion under
(iii) Providers of services and suppliers who are the subject of an active revocation of participation under this subchapter, including for not satisfying conditions of participation.
(iv) In the case of such a plan that makes a referral under subparagraph (A)(i) through the portal (or other successor technology) with respect to activities of substantiated or suspicious activities of fraud, waste, or abuse of a provider of services (including a prescriber) or supplier, if such provider (including a prescriber) or supplier has been the subject of an administrative action under this subchapter or subchapter XI with respect to similar activities, a notification to such plan of such action so taken.
(C) Rulemaking
For purposes of this paragraph, the Secretary shall, through rulemaking, specify what constitutes substantiated or suspicious activities of fraud, waste, and abuse, using guidance such as what is provided in the Medicare Program Integrity Manual 4.8. In carrying out this subsection, a fraud hotline tip (as defined by the Secretary) without further evidence shall not be treated as sufficient evidence for substantiated fraud, waste, or abuse.
(D) HIPAA compliant information only
For purposes of this subsection, communications may only occur if the communications are permitted under the Federal regulations (concerning the privacy of individually identifiable health information) promulgated under section 264(c) of the Health Insurance Portability and Accountability Act of 1996.
(2) Quarterly reports
Beginning not later than 2 years after October 24, 2018, the Secretary shall make available to MA plans under this part and prescription drug plans under part D in a timely manner (but no less frequently than quarterly) and using information submitted to an entity described in paragraph (1) through the portal (or other successor technology) described in such paragraph or pursuant to
(A) include administrative actions, pertinent information related to opioid overprescribing, and other data determined appropriate by the Secretary in consultation with stakeholders; and
(B) be anonymized information submitted by plans without identifying the source of such information.
(3) Clarification
Nothing in this subsection shall preclude or otherwise affect referrals to the Inspector General of the Department of Health and Human Services or other law enforcement entities.
(Aug. 14, 1935, ch. 531, title XVIII, §1859, as added
Editorial Notes
References in Text
The Internal Revenue Code of 1986, referred to in subsec. (e)(3)(A), is classified generally to Title 26, Internal Revenue Code.
Section 264(c) of the Health Insurance Portability and Accountability Act of 1996, referred to in subsec. (i)(1)(D), is section 264(c) of
Amendments
2018—Subsec. (b)(6)(B)(iii).
Subsec. (f)(1).
Subsec. (f)(3)(F).
Subsec. (f)(5).
Subsec. (f)(8).
Subsec. (f)(9).
Subsec. (h).
Subsec. (i).
2016—Subsec. (b)(6).
2015—Subsec. (f)(1).
2014—Subsec. (f)(1).
2013—Subsec. (f)(1).
Subsec. (f)(1).
2010—Subsec. (f)(1).
Subsec. (f)(2)(C).
Subsec. (f)(3)(E).
Subsec. (f)(4)(C).
Subsec. (f)(5).
Subsec. (f)(6), (7).
Subsec. (g).
2008—Subsec. (b)(2).
Subsec. (b)(6)(A).
Subsec. (b)(6)(B)(iii).
Subsec. (f).
Subsec. (f)(5).
2007—Subsec. (f).
2003—Subsec. (b)(4), (5).
Subsec. (b)(6).
Subsec. (c)(5).
Subsec. (f).
1999—Subsec. (e)(2).
Statutory Notes and Related Subsidiaries
Change of Name
References to Medicare+Choice deemed to refer to Medicare Advantage or MA, subject to an appropriate transition provided by the Secretary of Health and Human Services in the use of those terms, see section 201 of
Effective Date of 2016 Amendment
Amendment by
Effective Date of 2010 Amendment
Effective Date of 2008 Amendment
Amendment by section 164(c)(1), (d)(1), (e)(1) of
Effective Date of 2003 Amendment
Amendment by section 221(b)(1), (d)(2) of
Amendment by section 231(b), (c) of
Regulations
Authorization To Operate; Resources for State Medicaid Agencies; Contracting Requirements
"(2)
"(A) shall permit such plan to be offered under part C of title XVIII of such Act [
"(B) shall not permit an expansion of the service area of the plan under such part C.
"(3)
"(4)
Panel of Clinical Advisors to Determine Conditions
No Effect on Medicaid Benefits for Duals
Authority To Designate Other Plans as Specialized MA Plans
Secretary of Health and Human Services authorized, in promulgating regulations to carry out subsection (b)(6) of this section, to provide, notwithstanding subsection (b)(6)(A) of this section, for the offering of specialized MA plans for special needs individuals by MA plans that disproportionately serve special needs individuals, see section 231(d) of
1 So in original. Probably should be "that are life threatening or significantly limit".
2 So in original. Probably should be "individual".
§1395w–29. Repealed. Pub. L. 111–152, title I, §1102(f), Mar. 30, 2010, 124 Stat. 1046
Section, act Aug. 14, 1935, ch. 531, title XVIII, §1860C–1, as added