CMS Pub. 100-16, ch. 4
Table of Contents (Rev. 121, Issued: 04-22-16)
10 – Introduction
10.1 – General Requirements
10.2 – Basic Rule
10.2.1 – Inpatient Stay During Which Enrollment Ends
10.2.2 – Exceptions to Requirement for MA plans to Cover FFS Benefits
10.3 – Types of Benefits
10.4 – Hospice Coverage
10.5 – Federal Medicare Requirements Related to Uniform Benefits and Non-Discrimination
10.5.1 – Uniformity
10.5.2 – Anti-Discrimination
10.5.3 – Review for Discrimination and Steering
10.5.4 – Confidentiality
10.6 – Multiple Plan Offerings and Benefit Caps
10.7 – Clinical Trials
10.7.1 – Payment for Services
10.7.2 – Payment for Investigational Device Exemption (IDE) Studies
10.7.3 – Payment for Clinical Studies Approved Under Coverage with Evidence
10.7.4 – Claims Processing Instructions for Clinical Studies
10.8 – Drugs Covered Under Original Medicare Part B
10.9 – Return to Enrollee’s Home Skilled Nursing Facility (SNF)
10.10 – Therapy Caps and Exceptions
10.11 – Transplant Services
10.12 – Durable Medical Equipment, Prosthetics, Orthotics and Supplies
10.12.1 – Designation of DME Providers/Suppliers
10.12.2 – Specifying Brands or Manufacturers of DME
10.12.3 – Brands/Manufacturers of DME not Subject to Limitation
10.12.4 – Prosthetics and Orthotics
10.12.5 – DMEPOS Competitive Bid Program
10.13 – Skilled Nursing Facility (SNF) Coverage
90 – National and Local Coverage Determinations
90.1 – Overview
110.2 – Provider Directories
110.3 – Health Maintenance Organization (HMO) and HMO Point of Service (POS) Coverage and Access
180.6 – Community Education Requirements
180.7 – MAO Rights
180.8 – Anti-discrimination Rights
190 – Part C Explanation of Benefits (EOB)
200 – Educating and Enrolling Members in Medicaid and Medicare Savings
200.1 – Defining Guidance
200.2 – Relationship to D-SNP Eligibility/Enrollment
200.3 – Relationship to Dual Eligible Demonstration Programs
200.4 – Scope of Financial Assistance Programs
200.5 – Targeting Membership
200.6 – Required Elements of Education/Enrollment Assistance Programs
200.7 – CMS Oversight
Part I of this chapter provides key information for Medicare Advantage Organizations (MAOs) regarding Medicare Advantage (MA) benefits for use in designing Plan Benefit Packages (PBP). Part II of this chapter, which begins at section 110, provides information on beneficiary protections, and includes topics such as rules for plan renewals, coordination of benefits, and educating and enrolling individuals in Medicaid and Medicare Savings Programs.
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
These guidelines reflect CMS' current interpretation of the provisions of the Medicare Advantage statute and regulations (chapter 42 of the Code of Federal Regulations, part 422) pertaining to benefits and beneficiary protections. This guidance is subject to change as technology and industry practices in plan design and administration evolve and as CMS gains additional experience administering the MA program.
This chapter is governed by regulations set forth at 42 CFR 422, Subpart C, and is generally limited to the benefits offered under Medicare Part C of the Social Security Act. Guidance on cost plans may be found in Subpart F of chapter 17 of the Medicare Managed Care Manual (MMCM). Guidance on Part D requirements may be found in the Prescription Drug Benefit Manual located at: http://www.cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovContra/PartDManuals.html. Part D prescription drug coverage is defined at 42 CFR 423.100 and in chapter 5 of the Prescription Drug Benefit Manual.
An MAO offering an MA plan must provide enrollees in that plan with all Part A and Part B original Medicare services, if the enrollee is entitled to benefits under both parts, and Part B services if the enrollee is a grandfathered "Part B only" enrollee. The MAO fulfills its obligation of providing original Medicare benefits by furnishing the benefits directly, through arrangements, or by paying for the benefits on behalf of enrollees.
Basic benefits must be furnished through providers meeting requirements that are specified at 42 CFR §422.204(b)(3) and discussed more fully in chapter 6 of this manual, "Relationships with Providers," which may be found at:
http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/mc86c06.pdf.
Administration of the Medicare program is governed by title XVIII of the Social Security Act (the Act). Under the Medicare program, the scope of benefits available to eligible beneficiaries is prescribed by law and divided into several main parts. Part A is the hospital insurance program and Part B is the voluntary supplementary medical insurance program.
The scope of the benefits under Part A and Part B is defined in the Act. Part A and Part B benefits are discussed in sections 1812 and 1832 of the Act, respectively, while section 1861 of the Act lays out the definition of medical and other health services. Specific health care services must fit into one of these benefit categories, and not be otherwise excluded from coverage under the Medicare program (see §1862 for exclusions).
In general, the Act lists categories of items and services covered by Medicare, although Congress occasionally adds specific services to be covered by Medicare. Some categories are defined more broadly than others; for example, the Act includes hospital outpatient services furnished incident to physicians' services (§1861(s)(2)(B)) but also specifically includes diabetes screening tests (§1861(s)(2)(Y)). The Secretary has the authority to make determinations about which specific items and services, within categories, may be covered under the Medicare program. Further interpretation is provided in the Code of Federal Regulations and CMS guidance.
In general, Medicare coverage and payment is contingent upon a determination that:
These criteria are codified through rulemaking in the Code of Federal Regulations and/or applied in manual guidance, or are applied through coverage determinations (see section 90 of this chapter). In addition, beneficiaries under part B are entitled to receive an "annual wellness visit," certain preventive services for which no cost-sharing may be charged, and additional preventive services.
Several original Medicare covered benefits and services are covered only for specific benefit periods, e.g., inpatient hospital services, skilled nursing facility services, and inpatient psychiatric hospital services. While an MA plan may offer additional coverage as a supplemental benefit, it may not limit the original Medicare coverage.
MA plans must provide their enrollees with all basic benefits covered under original Medicare. Consequently, plans may not impose limitations, waiting periods or exclusions from coverage due to pre-existing conditions that are not present in original Medicare.
The following requirements apply with respect to the rule that MAOs must cover the costs of original Medicare benefits:
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
MAOs must continue to cover, through discharge, inpatient services of a non-plan enrollee if the individual was an enrollee at the beginning of the inpatient stay. Note that incurred non-inpatient services are paid by original Medicare or the new MAO the enrollee joined as of the effective date of the new coverage.
Enrollee cost-sharing for the inpatient hospital stay is based on the cost-sharing amounts as of the entry date into the hospital.
If the enrollee is in a SNF in December and in an MAO that does not require a prior qualifying 3-day hospital stay and then joins original Medicare on January 1, the stay continues to be considered a covered stay (if medically required).
The following circumstances are exceptions to the rule that MAOs must cover the costs of original Medicare benefits:
In addition to providing original Medicare benefits, the MAO also must furnish, arrange, or pay for supplemental benefits and prescription drug benefits covered under the plan.
CMS reviews and approves an MAO’s coverage of benefits by ensuring compliance with requirements described in this manual, including those outlined in this chapter, chapter 8, “Payments to Medicare Advantage Organizations,” and other applicable CMS guidance, such as that contained in the annual Call Letter.
Basic benefits: All MA plans must offer and identify in plan bids all medically necessary Medicare Part A and Part B services, including Part B prescription drugs, as basic benefits.
Part D prescription drug benefits: MA plans may choose to offer Part D benefits as described at 42 CFR §423 and in chapter 5 of the Prescription Drug Benefit Manual.
Supplemental benefits: MA plans may choose to offer some benefits to enrollees in addition to the covered Medicare Part A and Part B (and Part D, as applicable) benefits
they are required to offer if the item or service also meets the criteria described in sections 30 and 40 of this chapter.
Supplemental benefits are further classified as either mandatory or optional:
Mandatory supplemental benefits are benefits not covered under Part A, Part B, or Part D but are covered by the MAO for every person enrolled in the MA plan. Mandatory supplemental benefits are paid for either in full, directly by, or on behalf of, MA enrollees by premiums and cost-sharing, or through the application of rebate dollars. MAOs may not impose waiting periods on mandatory supplemental benefits. An MA Medical Savings Account (MSA) plan may not provide mandatory supplemental benefits.
Optional supplemental benefits are benefits not covered under Part A, Part B, or Part D, but are offered uniformly to all enrollees. Enrollees may choose to pay extra to receive coverage under the optional supplemental benefit. The optional supplemental benefit is paid for directly by the enrollee or on behalf of the enrollee through an additional premium and cost-sharing. MA plans may offer their enrollees a group of services as one optional supplemental benefit, offer optional supplemental services individually, or offer a combination of group and individual optional supplemental services. MA plan enrollees choose whether to elect and pay for any particular optional supplemental benefit offered under the MA plan.
Rebate dollars may not be applied toward optional supplemental benefits. An MA plan may not offer as an optional supplemental benefit reduced cost-sharing for original Medicare benefits (42 CFR §422.102(a)(4)). An MA plan may not list a dual eligible beneficiary's State Medicaid wraparound benefits as either a mandatory or optional supplemental benefit.
MA MSA plans are permitted to offer optional supplemental benefits, provided that the MSA plan does not offer an optional supplemental benefit that covers expenses that count toward the annual MSA deductible.
Optional supplemental benefits must be offered: (1) at the beginning of the contract year to all MA plan enrollees and (2) at the time of initial enrollment to new enrollees who enroll during the contract year.
The MA plan may then:
Although MA plans may limit the availability of optional supplemental benefits to current enrollees as described above, enrollees may voluntarily drop or discontinue optional supplemental benefits at any time during the contract year upon proper advance notice to the MA plan. An enrollee who drops an optional supplemental benefit through proper advance notice as determined by the MAO, typically 30 days, need not pay further monthly premiums for the optional supplemental benefit. Furthermore, if s/he paid a complete annual premium for the optional supplemental benefit, s/he is entitled to a pro-rated refund of unpaid premium for the remaining portion of the year.
Chapter 2 of the MMCM, “Enrollment and Disenrollment,” linked at http://www.cms.gov/Medicare/Eligibility-and-Enrollment/MedicareMangCareEligEnrol/index.html?redirect=/MedicareMangCareEligEnrol/, provides the requirements for an involuntary disenrollment of an enrollee from an MA plan when that enrollee fails to make timely payments of premium for optional supplemental benefits.
MA plans may impose waiting periods for optional supplemental benefits that require enrollees to have the specified coverage for a period of time before utilization. However, MA plans that choose to impose waiting periods must describe the details, including the length of the waiting period, in their annual bid as well as include the information in any relevant marketing materials.
As defined in 42 CFR §422.320, MA plans must inform each enrollee eligible for hospice care about its availability. This is true whether a Medicare hospice program is located within the plan’s service area or if it is common practice to refer patients to hospice programs outside the plan’s service area.
An MA enrollee who elects hospice care, but chooses not to disenroll from the plan, is entitled to continue to receive through the plan any MA benefits other than those that are the responsibility of the hospice. Under such circumstances, the MA plan is paid a reduced capitation rate for that enrollee by CMS and the MA plan is responsible for continued coverage of supplemental benefits. CMS pays: (a) the hospice program for hospice care furnished to the enrollee and (b) the MA plan, providers, and suppliers for other Medicare-covered services furnished to the enrollee through the original Medicare program, subject to the usual rules of payment.
Hospice coverage is effective immediately on the date of election; the reduced rate paid to the MA plan begins the next month (42 CFR §422.320).
Table I below summarizes the cost-sharing and provider payments for services furnished to an MA plan enrollee who elects hospice.
Table I: Payments for Services Furnished to an Enrollee who has Elected Hospice
| Type of Services | Enrollee Coverage Choice | Enrollee Cost-sharing | Payments to Providers |
|---|---|---|---|
| Hospice program | Hospice program | Original Medicare cost-sharing | Original Medicare |
| Non-hospice care1, Parts A & B | MA plan or original Medicare | MA plan cost-sharing, if enrollee follows MA plan rules3 | Original Medicare2 |
| Original Medicare cost-sharing, if enrollee does not follow MA plan rules3 | Original Medicare | ||
| Non-hospice care1, Part D | MA plan (if applicable) | MA plan cost-sharing | MAO |
| Supplemental | MA plan | MA plan cost-sharing | MAO |
Notes:
1) The term 'hospice care' refers to original Medicare items and services related to the terminal illness for which the enrollee entered the hospice. The term 'non-hospice care' refers either to services not covered by original Medicare or to services not related to the terminal condition for which the enrollee entered the hospice.
2) If the enrollee chooses original Medicare for coverage of covered, non-hospice-care, original Medicare services and also follows MA plan requirements, then, the enrollee pays plan cost-sharing and original Medicare pays the provider. The MA plan must pay the provider the difference between original Medicare cost-sharing and plan cost-sharing, if applicable.
3) An HMO enrollee who chooses to receive services out of network has not followed plan rules and therefore is responsible to pay FFS cost-sharing; a PPO enrollee who receives services out of network has followed plan rules and is only responsible for plan cost-sharing. The enrollee need not communicate to the plan in advance his/her choice of where services are obtained.
Please see the following resources for additional information:
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
The following rules apply to any MA plan, regardless of plan type, and to any category of benefit – basic, mandatory supplemental, and optional supplemental.
An MAO may not deny, limit, or condition enrollment to individuals eligible to enroll in an MA plan offered by the organization on the basis of any factor that is related to health status, including, but not limited to the following:
• Disability.
Additionally, an MAO must:
• Comply with the provisions of section 1557 of the Affordable Care Act, title VI of the Civil Rights Act of 1964, the Age Discrimination Act of 1975, section 504 of the Rehabilitation Act of 1973, title II of the Americans with Disabilities Act (ADA) of 1990, and the Genetic Information Nondiscrimination Act of 2008; and • Have procedures in place for each of its MA plans to ensure that enrollees are not discriminated against in the delivery of health care services, consistent with the benefits covered in their policy, based on race, ethnicity, national origin, religion, gender, age, mental or physical disability, sexual orientation, genetic information, or source of payment. Discrimination based on “source of payment” means, for example, that MA providers cannot refuse to serve enrollees because they receive assistance with Medicare cost-sharing from a State Medicaid program.
However, there are three situations in which enrollment in an MA plan may be denied based on the presence or absence of a medical condition:
• To a person who does not fulfill the eligibility criteria for enrollment in a Special Needs Plan (SNP), under the circumstances mentioned in chapter 16b of the MMCM, “Special Needs Plans,” at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/mc86c16b.pdf; • To a person with end-stage renal disease (ESRD), under the circumstances mentioned in chapter 2 of the MMCM, “Enrollment and Disenrollment,” at: http://www.cms.gov/Medicare/Eligibility-and-Enrollment/MedicareMangCareEligEnrol/index.html?redirect=/MedicareMangCareEligEnrol/; and • To a person receiving hospice benefits prior to completing an enrollment request for an MSA plan. Refer to chapter 2 of the MMCM, “Enrollment and Disenrollment” at: http://www.cms.gov/Medicare/Eligibility-and-Enrollment/MedicareMangCareEligEnrol/index.html?redirect=/MedicareMangCareEligEnrol/
Additional information about Federal law and regulations related to discrimination may be found at the following sites:
Age
HHS OCR Page on Age Discrimination
• http://www.hhs.gov/ocr/civilrights/understanding/age/index.html
Race, color, national origin
HHS OCR Page on Discrimination Based on Race, Color, and National Origin
Guidance to Federal Financial Assistance Recipients Regarding Title VI Prohibition Against National Origin Discrimination Affecting Limited English Proficient Persons
The National Culturally and Linguistically Appropriate Services (CLAS) Standards in Health and Health Care
Medical history/history of mental illness, claims experience, evidence of insurability, genetic information
HHS Health Information Privacy Page
DOL HIPPA Nondiscrimination Requirements
Disability
HHS OCR Page on Disability Rights
Medicare Page on Resources for People with Disabilities
DOJ Civil Rights Division Page on the Americans with Disabilities Act
Medicare Provider Applicants
HHS OCR Page on Medicare Provider Applicants
10.5.3 – Review for Discrimination and Steering
CMS reviews and approves MA PBPs based on statutes, regulations, and policy guidelines contained in this manual and other CMS instructions. Review is to ensure that:
An MAO is responsible for how its downstream entities present the MAO, the MA plan, and its benefits. If the downstream entity offers other items or services, not part of the MA PBP, then they must not reference the MA plan or in any way characterize such items or services as benefits covered or offered by the MA plan.
An MAO does not offer a cost-sharing structure or plan benefits that:
Note: Section 50.1 below contains general guidance on acceptable cost-sharing. The anti-discrimination prohibitions in this section apply to both original Medicare, mandatory supplemental, and optional supplemental benefits.
An MAO must comply with all Federal laws and regulations designed to prevent or ameliorate fraud, waste, and abuse including, but not limited to, applicable provisions of the Federal criminal law, the False Claims Act (31 U.S.C. 3729 et seq.), the anti-kickback statute (section 1128B(b)) of the Act, and HIPAA administrative simplification rules at 45 CFR parts 160, 162 and 164.
MAOs must establish procedures to ensure the confidentiality and accuracy of all enrollee records, including medical records, as well as other health and enrollment information the MAO maintains. MAOs must ensure that they:
For purposes of CMS audits of risk adjustment data, MAO network providers and deemed contracted providers (of PFFS plans) must be required, under their contracts or the plan's Terms and Conditions of Payment, to provide medical records requested by the MAO.
Medical records from providers also may be used by MAOs for the following purposes:
To encourage providers to submit enrollee medical records to the plan, an MAO may choose to send staff to assist in the record collection or to reimburse providers for the costs associated with furnishing the records. MAOs are prohibited from using medical record reviews to delay payments to providers. Both required and voluntary provision of medical records by providers must be consistent with HIPAA privacy statute and regulations (http://www.hhs.gov/ocr/privacy/).
An MAO may offer more than one MA plan in the same service area (though each plan is subject to the conditions and limitations established for the MA program). Caps for a supplemental benefit can only be imposed at the MA plan level. For example, during a contract year, if an enrollee switches to another MA plan offered by the same MAO in the same service area, then an enrollee who has exhausted the supplemental benefit of one plan is entitled to the full benefit of the other plan. This does not preclude MAOs from providing benefits with periodic caps such as monthly or quarterly caps, so long as general benefit standards, such as actuarial equivalence for basic benefits and compliance with anti-discrimination provisions, are met.
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
For clinical trials covered under the Clinical Trials National Coverage Determination 310.1 (NCD) (NCD manual, Pub. 100-03, Part 4, section 310), original Medicare covers the routine costs of qualifying clinical trials for all Medicare enrollees, including those enrolled in MA plans, as well as reasonable and necessary items and services used to diagnose and treat complications arising from participating in qualifying clinical trials. All other original Medicare rules apply.
Refer to the Medicare Clinical Trial Policy at: http://www.cms.gov/medicare-coverage-database/details/ncd-details.aspx?NCDId=1&ncdver=2&bc=BAABAAAAAAAA and for more information on the definition of routine costs and the clinical trial Medicare qualification process. This policy does not withdraw Medicare coverage for items and services that may be covered according to Local Coverage Determinations (LCDs) or the regulations on category B investigational device exemptions (IDE) found in 42 CFR 405, Subpart B, 411.15, and 411.406. MAOs may contact the Medicare Administrative Contractor (MAC) for information about qualification and payment for clinical trial items and services.
MAOs pay the enrollee the difference between original Medicare cost-sharing incurred for qualified clinical trial items and services and the MA plan’s in-network cost-sharing for the same category of items and services. This cost-sharing reduction requirement
applies to all qualifying clinical trials as defined in the NCD manual, Pub. 100-03, Part 4, section 310.1. MAOs may not choose the clinical trial or clinical trial items and services to which this policy applies. The MAO owes the difference even if the enrollee has not yet paid the clinical trial provider. Additionally, the enrollee's in-network cost-sharing portion also must be included in the plan's out-of-pocket maximum calculation.
To be eligible for reimbursement, an enrollee (or providers acting on the enrollee's behalf) must notify their plan that the enrollee received a qualified clinical trial service and provide documentation of the cost-sharing incurred, such as a provider bill. MAOs also are permitted to seek the MA enrollee's original Medicare cost-sharing information directly from clinical trial providers.
MA enrollees are free to participate in any qualifying clinical trial that is open to beneficiaries in original Medicare. If an MAO conducts its own clinical trial, the MAO can explain to its enrollees the benefits of participating in its clinical trial; however, the MAO may not require prior authorization for participation in a Medicare-qualified clinical trial not sponsored by the plan, nor may it create impediments to an enrollee's participation in a non-plan-sponsored clinical trial, even if the MAO believes it is sponsoring a clinical trial of a similar nature. Examples of impediments to an enrollee's participation include, but are not limited to, requiring enrollees to pay the original Medicare cost-sharing amount for routine care services before being compensated by the MAO for the difference or unduly delaying any required cost-sharing refund. Enrollees retain the right to choose the clinical trial(s) in which they wish to participate. However, an MAO may request, but not require, enrollees to notify the plan in advance when they choose to participate in Medicare-qualified clinical trials.
MAOs are responsible for payment of claims related to enrollees' participation in both Category A and B IDE studies that are covered by the MAC with jurisdiction over the MA plan's service area. The MAO is responsible for payment of routine care items and services in CMS-approved Category A and Category B IDE studies. The MAO is also responsible for CMS-approved Category B devices. CMS will not approve Category A devices because they are statutorily excluded from coverage.
CMS finalized changes to the IDE regulations (42 CFR § 405 Subpart B), effective January 1, 2015. A listing of all CMS-approved Category A IDE studies and Category B IDE studies will be posted on the CMS Coverage webpage site located at: http://www.cms.hhs.gov/center/coverage.asp and published in the Federal Register.
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
In National Coverage Determinations (NCDs) requiring CED, Medicare covers items and services in CMS-approved CED studies. MAOs are responsible for payment of items and services in CMS-approved CED studies unless CMS determines that the significant cost threshold is exceeded for that item or service (see 42 CFR 422.109). Approved CED studies are posted on the CMS Coverage with Evidence Development webpage (see http://www.cms.gov/Medicare/Coverage/Coverage-with-Evidence-Development/index.html). Billing instructions are issued for each NCD.
Complete requirements for claims processing and payment for clinical studies may be found in the Medicare Claims Processing Manual, Transmittal 2955 (https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/downloads/R2955CP.pdf).
For this subsection, the term “drug” means “drug or biological.” Drugs that are covered under Medicare Part B are governed by original Medicare regulations and local coverage decisions. For more coverage details, see the Medicare Benefits Policy Manual Publication 100-02, chapter 15, section 50 “Drugs and Biologicals” and the Medicare Claims Processing Manual, Publication 100-04, chapter 17, and sections of the Manual referenced therein.
The following broad categories of drugs may be covered under Medicare Part B, subject to coverage requirements and regulatory and statutory limitations. Note: These examples are illustrative and do not comprise a comprehensive list.
○ Certain oral anti-cancer drugs and anti-nausea drugs; ○ Hemophilia clotting factors; ○ Immunosuppressive drugs; ○ Some antigens; ○ Intravenous immune globulin administered in the home for the treatment of primary immune deficiency; ○ Injectable drugs used for the treatment of osteoporosis in limited situations; and ○ Certain drugs, including erythropoietin, administered during the treatment of end-stage renal disease.
If an MA enrollee wishes to receive a Part B covered drug in a physician's office, then the MAO must cover the drug and the service of administering the drug. MAOs may not determine whether it was reasonable and necessary for the patient to choose to have his or her Part B covered drug administered incident to physician services and may not impose any uniform policy that prevents enrollees from having a Part B covered drug administered in a physician's office.
Injectable drugs that the applicable MAC has determined are not usually self-administered, but that enrollees purchase at a pharmacy and administer at home may only be offered by MAOs as a Part D benefit. However, MA enrollees always have the option of receiving the Medicare-covered benefit, i.e., administration of the covered drug, in a physician's office from the physician's stock of drugs.
Some drugs are covered under either Part B or Part D depending on the circumstances and enrollees generally may not be denied Part D coverage of a drug based solely on its availability under Part B. It is critical to understand when a drug is covered under Part B or Part D in order to protect beneficiaries from coverage disruption and to ensure that Part C and Part D bids properly reflect appropriate coverage under either Part B or Part D. For detailed guidance and clarification on coverage under Part B versus Part D, see Appendix C of chapter 6 of the Part D Prescription Drug Benefit Manual located at: http://www.cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovContra/PartDManuals.html.
An MA plan must provide coverage through a home SNF (defined at 42 CFR §422.133(b)) of post-hospital extended care services to enrollees who resided in a nursing facility prior to the hospitalization, provided:
This requirement also applies if the MA plan offers SNF care without requiring a prior qualifying hospital stay.
The post-hospital extended care scope of services, cost-sharing, and access to coverage provided by the home SNF must be no less favorable to the enrollee than post-hospital extended care services coverage that would be provided to the enrollee by a SNF that would be otherwise covered under the MA plan (42 CFR §422.133(c)). In a PPO, in-network cost-sharing applies.
Certain services are exempted from original Medicare caps for rehabilitation services. Complete details can be found in section 10.2 of chapter 5 of publication 100-04, the Medicare Claims Processing Manual, at http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Internet-Only-Manuals-IOMs-Items/CMS018912.html.
As explained in section 10.2 above, MA plans must provide all original Medicare services to its enrollees. For coordinated care plans, in-network transplant services may be provided outside of the plan service area if the services are accessible and available to enrollees, and that service delivery is consistent with community patterns of care for original Medicare beneficiaries who reside in the same area.
MA plans, for reasons of cost (as explained below), may wish to provide a required original Medicare transplant service at a distant location (further away than the normal community patterns of care for that service), even though provision of the service is available locally (within the service area), consistent with community patterns of care for original Medicare beneficiaries who reside in the service area.
The MA plan's provision of transplant services at a distant location, farther away than the normal community patterns of care for transplant services, depends on the local cost of transplants:
If the local providers of transplants, within the normal community patterns of care for transplants, are not willing to cover transplants for MA enrollees at a mutually agreed upon payment rate, then the MA plan must offer transplants through alternative transplant providers.
If the local providers of transplants, within the normal community patterns of care for transplants, are willing to cover transplants for MA enrollees at the original Medicare rate or at a mutually agreed upon rate, then, although the MA plan may also offer transplants at a more distant location, the MA plan must allow enrollees the option of obtaining transplant services locally.
When providing an original Medicare service at a more distant location, farther away than the normal community patterns of care for transplants, the MA plan must ensure that the distant location provides at least the same quality and timeliness of services as at the local providers of this service. More specifically, the transplant center at the distant location must be a Medicare-eligible transplant provider and the waiting time for the transplant should not be significantly longer than the waiting within the normal community patterns of care.
In any circumstance in which an MA plan provides transplant services at a more distant location, the MA plan must:
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
MA plans are required to “provide coverage of, by furnishing, arranging for, or making payment for, all services that are covered by Medicare Part A and Part B” (see 42 CFR 422.101(a)), which includes coverage of durable medical equipment, prosthetics and supplies. The MAO is responsible for maintaining continuity of care for its enrollee by ensuring uninterrupted access to the medically necessary covered DME item, including when the item needs to be repaired or replaced. If necessary, the MAO must purchase or rent a replacement item for the beneficiary to use.
During the application process, MA plans identify specific DME suppliers with whom they have a contract to provide enrollees with all medically necessary DME items and supplies. MA plans are also expected to update provider/supplier directory information any time they become aware of changes. All updates to the online directory are expected to be done in real-time. For more information about provider directory requirements, see section 110.2 below.
The plan may disclose information on the suppliers contracted to provide DME to enrollees as an attachment to the Annual Notice of Change (ANOC) and the Evidence of Coverage (EOC) and plans that limit the DME brands and manufacturers it will cover are instructed to attach to the EOC or ANOC, as appropriate, a list of those brands and manufacturers.
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
MA plans may specify brands and manufacturers as preferred and charge lower cost-sharing for the preferred brands or may limit the DME to only those preferred brands and manufacturers, as long as the following conditions are met (42 CFR 422.100(l)):
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
Some DME items are not interchangeable, that is, they must be tailored to fit individual enrollees. As a result, such items, as designated by CMS annually, will not be subject to limitation based on brand or manufacturer or may not be limited under certain circumstances. Up-to-date information is published annually in the Call Letter.
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
The MA plan must provide all brands and manufacturers of Prosthetics and Orthotics without limitation.
On January 1, 2011, the original Medicare payment amount for DMEPOS competitive bid items furnished in Competitive Bidding Areas (CBAs) was reduced below the fee schedule payment. The program only affects certain geographic areas and certain categories of DMEPOS; exceptions may apply. For the latest guidance refer to information at http://www.cms.gov/DMEPOSCompetitiveBid/. The program affects MA payments in those situations when an MA plan is only required to pay at least the original Medicare rate, for example, when reimbursing suppliers that are not under contract with the MA plan. MAOs must disclose information on the new program to their plan enrollees. MAOs should inform enrollees how the DMEPOS competitive bidding program will affect them and what they should do if they need to change suppliers, for example, in cases where an enrollee’s current supplier is not one of the “Medicare contract suppliers” under the DMEPOS competitive bidding program and they cannot be grandfathered under the DMEPOS competitive bidding program.
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
Prior to termination of SNF services, the provider must deliver a valid written notice to the enrollee of the MAO’s decision to terminate covered services no later than two days before the proposed end of the services (42 CFR § 422.624(b)). The MAO is financially liable for continued services until two days after the enrollee receives valid notice. If the enrollee’s services are expected to be fewer than two days in duration, the provider should notify the enrollee at the time of admission to the provider. An enrollee who receives advance notice and agrees with the termination of services earlier than 2 days hence, may waive continuation of services.
No dollar limits may be placed on the provision of Part B drugs covered under original Medicare unless the Medicare statute imposes the limit on original Medicare coverage, it is specified in a national or applicable local coverage determination, or CMS imposes a dollar limit. (See section 90.2 below for more detailed guidance on the obligation of plans to follow local coverage determinations.)
As provided at 42 CFR §422.4(c), an MAO cannot offer an MA coordinated care plan in an area unless that plan or another plan offered by the MAO in that same service area includes Part D prescription drug coverage. Table II provides a summary of the basic requirements for Part D coverage by MA plans. For complete information, please rely on the Part D prescription drug coverage information provided in chapter 5 of the Prescription Drug Benefit Manual.
Regardless of whether an MAO offers a coordinated care plan in the area with Part D benefits, all Special Needs plans (SNPs) are required to include Part D prescription drug coverage (see the definition of SNPs at 42 CFR §422.2).
Note that Over-the-Counter (OTC) drug benefits are not classified as Part D prescription drug benefits.
| Plan Type | Regional or Local MA Plan? | Must offer Part D? | Can an enrollee elect a PDP? |
|---|---|---|---|
| MA Coordinated Care Plan (CCP) | |||
| HMO, Point of Service (HMOPOS), Provider Sponsored Organization (PSO) | Local | Yes, unless another non-SNP MA plan offered by the same organization in the same service area includes required prescription drug coverage under Part D (42 CFR 422.4(c))1. | No |
| PPO | Either | Yes, unless another non-SNP MA plan offered by the same organization in the same service area includes required prescription drug coverage under Part D (42 CFR 422.4(c)). | No |
| Special Needs Plan (SNP) | Either | Yes, required. 42 CFR 422.2 (definition of SNP) | No |
| Private Fee-for-Service (PFFS) plan | Local | No | Yes, provided the PFFS plan does not offer Part D coverage. |
| MA Medical Savings Account (MSA) Plan | Local | Not permitted | Yes |
| Section 1876 Cost Plans | |||
| Cost plan offering qualified Part D prescription drug coverage | NA | No, but Part D coverage may be offered as an optional supplemental benefit | Yes |
| Cost plan offering non-qualified prescription drug coverage | NA | No. The cost plan cannot offer both Part D coverage and non-qualified prescription drug coverage. | Yes |
| Section 1833 HCPP (Health Care Pre-payment Plan) | NA | No | Yes |
| PACE Programs (Program for the All-inclusive Care of the Elderly) | NA | Yes2 | No |
Notes to Table II:
1. See chapter 5 of the Prescription Drug Benefit manual located at http://www.cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovContra/PartDManuals.html for the definition of required drug coverage.
2. Program for the All-Inclusive Care of the Elderly (PACE) organizations offering PACE Programs, as defined in section 1894 of the Act generally have elected to provide Part D coverage in order to receive payment for the prescription drug coverage that they are statutorily required to provide.
Every MA plan:
Must have policies and procedures, that is, coverage rules, practice guidelines, payment policies, and utilization management, that allow for individual medical necessity determinations (42 CFR §422.112(a)(6)(ii));
Must employ a medical director who is responsible for ensuring the clinical accuracy of all organization determinations and reconsiderations involving medical necessity. The medical director must be a physician with a current and unrestricted license to practice medicine in a State, Territory, Commonwealth of the United States (that is, Puerto Rico), or the District of Columbia (42 CFR §422.562(a)(4));
If the MAO expects to issue a partially or fully adverse medical necessity (or any substantively equivalent term used to describe the concept of medical necessity) decision based on the initial review of the request, the organization determination must be reviewed by a physician or other appropriate health care professional with sufficient medical and other expertise, including knowledge of Medicare coverage criteria, before the MAO issues the organization determination decision. The physician or other health care professional must have a current and unrestricted license to practice within the scope of his or her profession in a State, Territory, Commonwealth of the United States (that is, Puerto Rico), or the District of Columbia (42 CFR §422.566(d), MMCM chapter 13, 40.1.1);
Must make determinations based on: (1) the medical necessity of plan-covered services - including emergency, urgent care and post-stabilization - based on internal policies (including coverage criteria no more restrictive than original Medicare's national and local coverage policies) reviewed and approved by the medical director; (2) where appropriate, involvement of the organization's medical director per 42 CFR §422.562(a)(4); and (3) the enrollee's medical history (e.g., diagnoses, conditions, functional status), physician recommendations, and clinical notes. Furthermore, if the
plan approved the furnishing of a service through an advance determination of coverage, it may not deny coverage later on the basis of a lack of medical necessity (Program Integrity Manual, chapter 6, Section 6.1.3(A)); and
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
MAOs are financially responsible for ambulance services, including ambulance services dispatched through 911 or its local equivalent, when either an emergency situation exists as defined in section 20.2 below or other means of transportation would endanger the beneficiary's health. The enrollee is financially responsible for plan-allowed cost-sharing. Medicare rules on coverage for ambulance services are set forth at 42 CFR 410.40. For original Medicare coverage rules for ambulance services, refer to chapter 10 of the Medicare Benefit Policy Manual, publication 100-02, located at http://www.cms.hhs.gov/manuals/Downloads/bp102c10.pdf.
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
An emergency medical condition is a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that a prudent layperson, with an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in:
Emergency medical condition status is not affected if a later medical review found no actual emergency present.
Emergency services are covered inpatient and outpatient services that are:
Furnished by a provider qualified to furnish emergency services; and
Needed to evaluate or treat an emergency medical condition.
Urgently needed services are covered services that:
An MA organization may choose to cover non-emergency services outside the network at higher cost-sharing.
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
The MAO must inform enrollees of their right to call 911 and:
The MAO is financially responsible for emergency services and urgently needed services:
The MAO is not responsible for the care provided for an unrelated non-emergency problem during treatment for an emergency situation. For example, if the attending physician is treating a fracture, the plan is not responsible for any costs connected with a biopsy of skin lesions performed while treating the fracture.
The physician treating the enrollee must decide when the enrollee may be considered stabilized for transfer or discharge, and that decision is binding on the MAO. Refer to section 20.5 below for the MAO's obligations regarding services provided following stabilization. Chapter 13 of the MMCM, "MA Beneficiary Grievances, Organization Determinations, and Appeals," addresses the enrollee's right to request a Quality Improvement Organization review of hospital discharges to a lower level of care. For transfers from one inpatient setting to another inpatient setting, an enrollee or person authorized to act on his or her behalf who disagrees with the decision and believes the enrollee cannot safely be transferred may request that the organization pay for continued out-of-network services. If the MAO declines to pay for the services, appeal rights are available to the enrollee.
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
Post-stabilization care services are covered services that are:
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
The MAO is financially responsible for post-stabilization care services obtained within or outside the MAO that:
Are pre-approved by a plan provider or other MAO representative;
Although not pre-approved by a plan provider or other MAO representative, are administered to maintain the enrollee's stabilized condition within one hour of a request to the MAO for pre-approval of further post-stabilization care; or
(In this situation, the MAO must give the treating physician the opportunity to consult with a plan physician. The treating physician may continue with care of the patient until a plan physician is reached or one of the criteria below is met.)
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
The MAO's financial responsibility for post-stabilization care services it has not pre-approved ends when:
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
Enrollee charges for post-stabilization care services may not be greater than what the organization would charge the enrollee if s/he had obtained the services through a contracted provider of the MAO. For purposes of cost-sharing, post-stabilization care services begin when the patient is stabilized and the emergency ends.
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
A supplemental benefit is an item or service not covered by original Medicare, that is primarily health related and for which the MA plan must incur a non-zero direct medical cost. These criteria are defined below.
1. (1) A supplemental benefit may not be a Medicare Part A or Part B covered service;
2. (2) The item or service must be primarily health related; that is, the primary purpose of the item or service is to prevent, cure or diminish an illness or injury. If the primary purpose of the item or service is comfort, cosmetic or daily maintenance, then it is not eligible as a supplemental benefit. The primary purpose of an item or service is determined by national typical usages of most people using the item or service, or by community patterns of care; and
3. (3) The MA plan must incur a non-zero direct medical cost in providing the benefit. If the MA plan only incurs an administrative cost, this requirement is not met.
An item or service that meets the above three conditions may be proposed as a supplemental benefit in an MA plan’s bid and submitted plan benefit package. The final determination of benefit status is made by CMS during the annual benefit package review.
Mid-year benefit enhancements are not allowed for non-employer plans. For more information regarding requirements specific to employer group plans, please refer to chapter 9 of the MMCM, “Employer/Union Sponsored Group Health Plans.”
MA plans are allowed to cover some benefits over more than one contract year. Such benefits, referred to as “multi-year” benefits, are supplemental benefits that are provided to an MA plan’s Medicare enrollees over a period exceeding one contract year. For example, it is permissible for an MA plan to cover one new pair of eyeglasses every two years. While some benefits may be appropriately offered over multiple years, CMS encourages MA plans to limit offerings to one contract year where possible.
Supplemental benefits need not be provided through Medicare providers nor at Medicare certified facilities. Please note, however, MA plans may not make payment to providers who have opted out or been excluded from Medicare through §§422.220 and 422.204(b)(4)/422.752(a)(8).
In designing supplemental benefits that extend original Medicare benefits, MA plans should consider:
although an MA plan may offer “chiropractic visits” as a benefit, the description of the benefit should not include the word “massage,” even though the chiropractor may use massage during the visit.
Examples of benefits meeting these standards that are eligible for MA plans to offer as supplemental benefits include:
Table III: Medicare Covered Benefits with Related Supplemental Benefit Fields in the PBP
| Medicare Covered Benefits | Benefits Eligible to be offered as a Supplemental Benefits |
|---|---|
| Inpatient Hospital-Acute | Additional Days Non-Medicare covered stays Upgrades |
| Inpatient Hospital-Psych | Additional Days Non-Medicare covered stays |
| Skilled Nursing Facility | Additional Days |
| Emergency Care | Worldwide Emergency/Urgent Coverage |
| Chiropractor | Routine Care/Other* |
| Podiatry | Routine Care |
| Outpatient Blood | Waiver of 3 pint deductible |
| Medicare Part B Rx & Home Infusion Drugs | Home Infusion Bundled Services |
| $0 Cost-sharing Preventive Services | Additional Smoking and Tobacco Use Cessation Counseling |
| Comprehensive Dental Services | Routine services, diagnostic services, restorative, endodontic/periodontal/extractive, prosthodontics, Other oral/maxillofacial surgery, other services |
| Eye Exams | Routine eye exams/Other* |
| Eye Wear | Contact lenses, eye glasses, lenses, frames, upgrades |
| Non-routine Hearing Exams | Routine hearing exams, fitting/evaluation for hearing aids |
Table III identifies the Medicare-covered and other benefits for which supplemental benefits are coded into the PBP as options. Other supplemental benefits to extend original Medicare coverage may be entered in the PBP “Other Supplemental Benefit” fields. CMS will review these benefits during bid review.
The list below identifies items or services that may be offered as supplemental benefits, subject to CMS bid review and meeting the criteria identified in section 30.1. Definitions and limitations of the eligible benefits are provided below. This list below is intended to be illustrative, not exhaustive.
The acupuncture provided by MA plans as a supplemental benefit must be provided by practitioners who are licensed or certified, as applicable, in the state in which they practice and are furnishing services within the scope of practice defined by their licensing or certifying state.
MA plans may offer alternative therapies as supplemental benefits. These alternative therapies must be provided by practitioners who are licensed or certified, as applicable, in the state in which they practice and are furnishing services within the scope of practice defined by their licensing or certifying state. MA plans are to provide a description of therapies offered in the PBP Notes section.
MA plans may choose to offer, as a supplemental benefit, provision of specific non-Medicare-covered safety devices to prevent injuries in the bathroom. In addition to providing and installing appropriate safety devices, the benefit may include an in-home bathroom safety inspection conducted by a qualified health professional, in accordance with applicable state and Federal requirements, to identify the need for safety devices, as well as the applicability to the specific enrollee’s bathroom (e.g., to determine whether a specific safety device can be installed into the bathroom).
The MA plan should describe the proposed benefit and, if an in-home assessment is offered, the qualifications of the health professional that will be performing those evaluations, in its submitted PBP.
MA plans may choose to offer routine chiropractic services as a supplemental benefit as long as the services are provided by a state-licensed chiropractor practicing in the state in which he/she is licensed and is furnishing services within the scope of practice defined by that state’s licensure and practice guidelines. The routine services may include conservative management of neuromusculoskeletal disorders and related functional clinical conditions including, but not limited to, back pain, neck pain and headaches, and the provision of spinal and other therapeutic manipulation/adjustments.
X-rays or other diagnostic or therapeutic services furnished or ordered by a chiropractor may be covered by the MA plan as a supplemental benefit as long as the chiropractor is state-licensed and is practicing within the states’ licensure and practice guidelines.
Medicare Part B covers individual and group therapy services to diagnose and treat mental illness. The Part B coverage usually requires a physician referral for mental health care and is based on a mental health diagnosis.
Counseling services not covered by original Medicare may be offered as a supplemental benefit to all beneficiaries. These supplemental benefits may address general topics, such as: coping with life changes; conflict resolution; or grief counseling and be offered as individual or group sessions.
Fitness benefits (e.g., fitness center membership, exercise and yoga classes) may be offered by MA plans as supplemental benefits designed to improve or maintain good health. The fitness benefit must, if applicable, include an orientation for each enrollee to the facility and the equipment. The benefit also may include development of a personalized exercise plan and a limited number of sessions with a certified trainer.
MA plans may not offer personal trainers or exercise coaches for in-home sessions.
MA plans should describe specifically what is included in the supplemental fitness benefit (e.g., access to fitness center or other facilities, support staff, general goals of the program) in the applicable PBP notes field.
Non-SNP MA plans may offer Enhanced Disease Management (EDM) as a supplemental benefit. EDM must be targeted to groups of enrollees based on a diagnosis of, or risk for, a specific disease condition (e.g., diabetes, heart failure, cognitive impairment such as Alzheimer’s and related dementias). Services that CMS would expect to be included in a supplemental “EDM” benefit for coordinated care plans, and which would be expected to be approved as supplemental benefits, would include the following three activities:
Enrollees in the target group are assigned to qualified case managers with specialized knowledge about the disease(s) who contact the enrollee to provide additional case management and monitoring services. We believe that this should be an essential aspect of an effective EDM program and it is important for MA plans to understand the difference between the assignment of case managers for all enrollees and the assignment of a case manager with specialized knowledge about a specific individual enrollee's disease(s). The case manager or other qualified health professional assigned to the enrollee should work to ensure that the enrollee makes and keeps appointments necessary to receive appropriate care from physicians and other health care providers including obtaining preventive services. That assigned case manager or other qualified health professional should facilitate the enrollee's participation in both standard disease management activities and supplemental EDM programs offered by the MA plan. The assigned case manager or other qualified health professional should ensure that all scheduled monitoring of the enrollee takes place and that information is analyzed and communicated to all members of the care team so that early signs of deterioration in the enrollee's condition are detected and action is taken to prevent further deterioration.
Educational activities being provided by certified or licensed professionals that are focused on the specific disease/condition. Educational programs are designed to help enrollees develop knowledge and self-care skills and to foster the motivation and confidence necessary to use those skills to improve health. Examples of educational services that may qualify as a supplemental benefit include provision of information about the specific disease process(es), treatments and drug therapies, signs and symptoms to watch for, self-care strategies and techniques, dietary restrictions, and nutritional counseling.
Routine monitoring of measures, signs and symptoms, applicable to the specific disease(s)/condition(s) of the enrollee. We expect the MA plan to collect and act upon the information gathered from routing monitoring in order to coordinate care in an appropriate and timely manner. Clinical staff with specialized knowledge of the enrollee's specific disease/condition should conduct this review of the EDM program.
A health education program may be offered as a supplemental benefit if it:
The interactive sessions are expected to:
Consistent with our description of health education activities and services above, MA plans may develop health education services to address health-related topics they identify as appropriate for their enrollee population and could include, as supplemental benefits, programs that support and encourage enrollees to adopt healthier lifestyles.
The In-Home Safety Assessment should be performed by an occupational therapist or other qualified health provider. Services included in such a benefit are provided only to enrollees who do not qualify for an in-home safety assessment under original Medicare's home health benefit and the MA plan must ensure the following conditions apply:
The assessment may include identification and/or minor modification of some home hazards outside of the bathroom, in order to reduce risk of injury. Such modifications may include removal of rugs that are not attached to the floor and rearrangement of furniture to create clear pathways.
Meals may be offered as a supplemental benefit to address the following two types of circumstances:
Home delivery of meals may be offered as a supplemental benefit if the services are:
1) Needed due to an illness;
2) Consistent with established medical treatment of the illness; and
3) Offered for a short duration.
Social factors, by themselves, do not qualify an enrollee for meal services.
Note that all MA coordinated care plans are required to “coordinate MA benefits with community and social services generally available in the area served by the MA plan” (§422.112(b)(3)). Therefore, MA plans are to:
However, the MA plan may not classify any of these community services as plan benefits. Additionally, an MA plan offering a meal benefit complying with the requirements described in this chapter may not advertise it as a “Meals on Wheels” benefit or use the term “Meals on Wheels” in the name of the benefit. It is important that prospective enrollees not confuse the limited meal services offered as a supplemental benefit with the broader services offered under the “Meals on Wheels” program. However, if an MA plan has entered into a contract with “Meals on Wheels” to furnish the approved meals benefit, it may inform its enrollees that the supplemental benefit (meal benefit) under the MA plan will be delivered by “Meals on Wheels.”
General nutritional education for all enrollees through classes and/or individual counseling may be provided as a supplemental benefit as long as the services are provided by practitioners who are practicing in the state in which s/he is licensed or certified, and are furnishing services within the scope of practice defined by their licensing or certifying state. (i.e., physician, nurse, registered dietician or nutritionist). The number of visits, time limitations, and whether the benefit is for classes and/or individual counseling must be defined in the PBP.
MA plans may offer OTC items as a supplemental benefit under Part C. OTC items include non-prescription drugs, also known as OTC drugs and health-related items. See section 40 below for details.
MA plans may provide enrollees with in-home Personal Emergency Response devices designed to notify appropriate personnel of an emergency (e.g., a fall), provided that they are primarily health related. A PERS may not include cellular telephones because such devices are not primarily health related (a definitive component of being a supplemental benefit).
An example of a preventive benefit that is eligible as a supplemental benefit is providing additional sessions of smoking and tobacco cessation counseling. MA plans may offer additional sessions of face-to-face intermediate counseling and/or additional sessions of face-to-face intensive counseling per contract year and/or the MA plans may offer as a supplemental benefit interactive, on-line or telephone-based coaching and support programs to enhance enrollees' successful smoking and tobacco cessation.
MA plans may offer as a supplemental benefit additional hours of one-on-one MNT counseling provided by a registered dietician or other nutrition professional, to enrollees who are eligible for the Medicare Part B-covered MNT benefit; that is, those with diabetes, renal disease, or who have received a kidney transplant in the last three years. In addition, MA plans may offer as a supplemental benefit one-on-one MNT counseling provided by a registered dietician or other nutrition professional, to all, or a disease-defined group, of its enrollees. As with all supplemental benefits, the MNT benefit's primary purpose must be to improve health outcomes.
Non-SNP MA plans may offer as a supplemental benefit a physical exam that provides services beyond those services required to be provided in the Annual Wellness Visit. To be considered an Annual Physical Exam that qualifies as a supplemental benefit by CMS, the exam would be provided by a qualified physician or qualified non-physician practitioner, hereafter referred to as a practitioner. At a minimum, the exam would include a detailed medical/family history and the performance of a detailed head to toe assessment with hands-on examination of all the body systems. For example, the practitioner uses visual inspection, palpation, auscultation and 133 manual examination in his/her full examination to assess overall general health and detect abnormalities or signs that could indicate a disease process that should be addressed. We consider these components minimum elements and not an exhaustive list.
Other aspects of the Annual Physical Exam may include, as appropriate, follow-up orders for referral to other practitioners, lab tests, clinical screenings, EKG, etc. The Annual Physical Exam also should emphasize prevention, i.e., the recommendations for preventive screenings, vaccination(s), and counseling about healthy behaviors. Practitioners should exercise clinical judgment when determining the additional components necessary for an Annual Physical Exam to meet the individual needs of the enrollee. MA plans do not need to fully describe in the PBP notes the non-Medicare covered activities and services included in the physical exam if the benefit is consistent with our guidance.
HMOs may offer a POS option as a mandatory or optional supplemental benefit pursuant to 42 CFR 422.105 and 422.111. This supplemental benefit may not be offered by any other MA plan type. The POS benefit provides coverage for some plan-covered services outside of the HMO's network. The HMO plan:
Must fully disclose and clearly specify all limitations (e.g., benefits, geographic area, providers) and describe all POS benefits and cost-sharing;
Must track enrollee and plan utilization and spending for POS services and provide this information to enrollees (i.e., in advance of meeting limitations and/or upon request by the enrollee); and
Note: A PPO must cover all plan benefits furnished to its enrollees anywhere in the United States. Therefore, an MAO wishing to furnish specific plan-covered services outside its service area, but only in certain geographic locations, should offer an HMO plan with a POS option.
An MA plan may offer a post-discharge medication reconciliation as a supplemental benefit. For example, immediately following discharge (e.g., within the first week) from a hospital or SNF inpatient stay, MA plans may offer, as a supplemental benefit, the services of a qualified health care provider who, in cooperation with the enrollee's physician, would review the enrollee's complete medication regimen that was in place prior to admission and compare and reconcile with the regimen prescribed for the enrollee at discharge to ensure new prescriptions are obtained and discontinued medications are discarded. This reconciliation of the enrollee's medications may be provided in the home and is designed to identify and eliminate medication side effects and interactions that could result in illness or injury.
MA Plans may offer, as a supplemental benefit, non-Medicare covered services that are primarily for the purpose of preventing the enrollee's readmission to a hospital or other institution, immediately following an enrollee's discharge from a hospital or skilled nursing facility (SNF) inpatient stay (e.g., within the first week).
Services included in a supplemental readmission prevention benefit that CMS would expect to approve would:
An MA plan may combine the benefits, suggested as examples below, as a complete "Readmission Prevention" benefit or offer the benefits separately. Examples include:
MA plans may propose a supplemental benefit to allow a contracted provider to diagnose and treat some conditions via telephone, and/or real time interactive audio and video technologies. MA plans must ensure that this type of service will not be used as a substitute for an effective, ongoing doctor-patient relationship, but rather, will be supportive of that relationship and of efficient delivery of needed care. MA plans offering such a benefit should ensure that:
A PPO may not use remote access technologies services as described above to fulfill its requirement to provide out-of-network services. Email communication between an enrollee and his/her physician would not be acceptable as a supplemental benefit because that communication is part of the Part B physician services MA plans are required to provide.
MA plans must include in the 110.1 field a description of the remote access technologies services they propose to provide as a mandatory supplemental benefit. In addition, the remote access technology supplemental benefit may not replace the Medicare telehealth basic benefit described at 42 CFR § 414.65.
Repairs of an item furnished as a supplemental benefit may be included as part of that supplemental benefit, as appropriate (e.g., eye glass and hearing aid repairs). However, as indicated in section 10.12, repairs of Medicare-covered DME are part of the Part B benefit and, consequently, may not be offered as supplemental benefits.
MA plans may offer a supplemental benefit that provides in-home equipment and telecommunication technology to monitor enrollees with specific health conditions (e.g., hypertension or heart failure). The benefit should be referred to as “Telemonitoring services” in the PBP and may not duplicate items or services provided under original Medicare (e.g., glucometers for diabetic beneficiaries). MA plans should include in the PBP notes field a description of the monitoring services they propose to provide as supplemental benefits. These benefits are distinct from telehealth benefits covered under original Medicare (see 42 CFR § 414.65). Telemonitoring equipment may not include a cellular telephone because such devices are not primarily health related. In addition, the supplemental benefit description should address the following issues:
An MA plan is not obligated to provide transportation to obtain non-emergent, covered Part A and Part B services. However, such transportation may be offered as a supplemental benefit.
The transportation offered must be used exclusively to accommodate the enrollee's health care needs: for example, the MA plan may offer a supplemental benefit that provides transportation to enrollees for physician office visits. The transportation must be arranged, or directly provided, by the MA plan and may not be used to transport enrollees for non-health-related purposes. The MA plan must describe the proposed benefit in the PBP.
A Visitor/Travel (V/T) benefit may be offered as a supplemental benefit as a means to provide covered services outside of the service area of the MA plan. Under plan enrollment rules, MA plans that do not offer a V/T supplemental benefit must disenroll current enrollees who are temporarily absent from the MA plan's service area for more than six consecutive months. However, MA plans that offer a V/T benefit may retain enrollees who are covered by the benefit, but temporarily out of the service area (and still within the United States or its territories) for more than six, but less than 12 months (42 CFR § 422.74(d)(4)(iii)). See chapter 2 of the MMCM, "Medicare Advantage Enrollment and Disenrollment," located at http://www.cms.gov/MedicareMangCareEligEnrol/01_Overview.asp, for further details.
The specific requirements for the V/T benefit are as follows:
direct-contracted providers as a covered V/T service area as long as the plan can ensure that its enrollees have access to all covered services.
Weight management programs may be offered as a supplemental benefit designed to promote healthy behaviors that help an individual to lose weight and keep it off, but the program may not offer meals as part of the benefit. As with all supplemental benefits, Weight Management Programs must be health driven and aim to improve health outcomes. For CMS to consider a Weight Management Program sufficiently health related, the benefit includes:
The weight management program should provide structured lessons on a weekly basis that are tailored to the beneficiaries' personal goals. The program should support self-monitoring of eating and physical activity as well as offer regular feedback from a counselor on goals, progress, and results. The program may be offered online (fully or partly), but must also be entirely available to enrollees without access to online capabilities.
An MA plan may offer as a supplemental benefit wigs for hair loss that is a result of chemotherapy. However, wigs may not be offered as a supplemental benefit for any other purpose.
Worldwide Emergency/Urgent Coverage refers to coverage of services, either as a mandatory or optional supplemental benefit, outside the United States and its territories. Under this benefit, enrollees may obtain only services that would be classified as emergency and urgently needed services had they been covered inside the United States. MA plans that offer a Worldwide Emergency/Urgent Coverage benefit may retain enrollees who are covered by the benefit but temporarily outside of the United States or its territories for up to six months. This coverage may also include ambulance services worldwide.
As explained in section 10.5.2 above, a plan benefit design may not discriminate based on health status. In particular, the cost of a mandatory supplemental Worldwide Emergency/Urgent Coverage benefit should be nominal within the bid; otherwise, CMS may determine that the benefit discriminates against enrollees who are unable to travel due to health status.
The items and services listed in this section have been previously proposed by MA plans as supplemental benefits in submitted plan benefit packages and, because they are not sufficiently health related, are not allowable supplemental benefits:
Note: For information specific to Special Needs Plan benefit offerings, see chapter 16b of the MMCM, 'Special Needs Plans.'
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
MA plans may offer as a supplemental benefit health-related items and medications that are: available without a prescription, and are not covered by Medicare Part A, Part B or Part D. MA plans may never offer as a Part C supplemental benefit an OTC drug or item that also is covered under Part B or that is paid for under Part D for the plan’s enrollees. OTC drugs and items that are eligible to be included in a Part C supplemental benefit must meet our criteria for qualification as a supplemental benefit in section 30 of this chapter. Detailed information about OTC drugs paid for under Part D may be found in Chapters 5 and 7 of the Medicare Prescription Benefit Manual, Pub 100-18.
Under Part C, MA plans may cover health-related OTC items such as adhesive or elastic bandages, and OTC drugs such as antihistamines and analgesics, that meet the criteria as eligible supplemental benefits under Part C, presented in section 30.1 above.
Medical supplies associated with the administration of insulin, (e.g., alcohol wipes and syringes) must be paid for under Part D and are not eligible to be covered as a supplemental benefit.
Since items and drugs that may be covered by the MA plan as supplemental benefits are for the enrollee, OTC items may be purchased for the enrollee only.
The OTC drugs and/or items offered, regardless of how they are packaged or paid for, must be available at a wide variety of retail outlets or through a mail order catalog. The MA plan must ensure that the retail outlets through which enrollees may obtain the covered OTC items are distributed within the service area to ensure that the benefit is uniformly offered and that all enrollees have access to the benefit. An MA plan that contracts with a single mail order company to provide OTC items has fulfilled its obligation of providing uniform and sufficient access to the OTC benefit.
An MA plan’s catalog for OTC may consist of an actual paper catalog that displays covered OTC drugs and/or items, a list on a website, or a simple order form. Enrollees may place their orders either through a secure website, mail, or a toll-free number. The OTC catalog must contain: a list of all plan-covered OTC items and the price of each item. The MA plan is responsible for the cost of mailing. To avoid excessive mailing costs, the MA plan may impose a minimum purchase amount per order.
The MA plan may not give enrollees money to purchase covered OTC items or drugs but may, for example: (1) reimburse enrollees for eligible purchases when receipts are presented; (2) allow enrollees to purchase OTC items through a plan catalog or list; or (3) issue a debit card that is electronically linked to eligible OTC items and drugs. The plan may establish a certain dollar amount that each covered enrollee may spend to purchase covered OTC items and drugs on a per-month or per-year basis. The method (debit card, mail order etc.) by which enrollees are able to purchase covered OTC items and drugs is not part of the benefit and may be changed during the year with appropriate prior notification to enrollees and the MA plan’s account manager to ensure the new method provides adequate access.
Every MA plan, independent of the payment method it chooses, must also allow – under circumstances which it describes (for example, when the debit card network is not operating correctly) – for manual reimbursement for the purchase of OTC items based on submitted receipts. The MA plan must indicate the forms and process (as well as the circumstances) by which manual reimbursement is allowed.
Table IV below displays examples of categories of OTC items that MA plans may cover as supplemental benefits, and also provides guidance to help plans distinguish between items that would be eligible for coverage and those that would not. Those items shown as “eligible” OTC items may be purchased by the enrollee without restriction. Those items shown as “dual purpose” may be purchased only after the enrollee discusses the purchase with their personal provider (or satisfies other requirements the plan may specify, to ensure that the covered item or service is health-related and appropriate for the enrollee). The plan may require a written note from, or a verbal discussion with, the enrollee’s personal health care provider as a condition for purchase of eligible or dual purpose items.
Table V displays examples of categories of items that are not eligible as OTC supplemental benefits because they are not “health benefits” within the meaning of the statute.
Note: Tables IV and V display categories of items rather than listing individual items. For example, a plan that chooses to offer cough medicines as a Part C OTC supplemental benefit must cover all items and brands and may not choose to cover only specified items or brands, in order to meet access requirements for the benefit.
The plan must clearly indicate in its OTC listing the items and drugs that, under certain circumstances, may be covered under either Part B or Part D. When an item is covered by Part B or Part D due to particular circumstances, the enrollee would not use his or her OTC benefit to obtain the item because it is Medicare-covered in those circumstances, and not part of the supplemental OTC benefit. For example, gauze may be covered under Part B when it is being used as prescribed, to perform surgical wound dressing changes.
Table IV: Eligibility Status of OTC Items
| Eligible? | Category | Examples of items and drugs included in this category |
|---|---|---|
| Dual Purpose | Minerals and vitamins | |
| Dual Purpose | In home testing and monitoring | Equipment to monitor blood pressure, cholesterol, blood sugar, to test for pregnancy, HIV, fecal occult blood. Bathroom scales may be covered for enrollees with CHF or liver disease to monitor fluid retention |
| Dual Purpose | Hormone replacement | Phytohormone, natural progesterone, DHEA |
| Dual Purpose | Weight loss items | Appetite suppressants, fat absorption inhibitors, food scales |
| Eligible | Fiber supplements | Pills, powders and non-food liquids that supplement fiber in the diet |
| Eligible | First Aid supplies | Adhesive bandages, gauze and other dressings, antibacterial ointment, peroxide, thermometers, non-sport tapes |
| Eligible | Incontinence supplies | Diapers, pads |
| Eligible | Medicines, ointments and sprays with active medical ingredients that alleviate symptoms | Antacids, analgesics, anti-bacterials, anti-histamines, anti-inflammatories, antiseptics, decongestants, sleep aids |
| Eligible | Topical Sunscreen | |
| Eligible | Supportive items for comfort | Compression hosiery, rib belts, elastic knee support |
| Eligible | Mouth care | Toothbrushes, toothpaste, floss, denture adhesives, denture cleaners and gum stimulators |
Table V: OTC Items Not Eligible as a Supplemental Benefit
| Eligible? | Category | Examples of Items/Drugs Included in this Category |
|---|---|---|
| Non-eligible | Alternative medicines | Homeopathic and alternative medicines including botanicals, herbals, probiotics and nutraceuticals |
| Non-eligible | Baby items | Diapers, formula |
| Non-eligible | Contraceptives | Birth control pills, spermicide, prophylactics |
| Non-eligible | Convenience and comfort | Scales, fans, magnifying glasses, ear plugs, insoles, arch supports and gloves |
| Non-eligible | Cosmetics | Mouthwashes, bad breath remedies, deodorants, lip soothers, grooming devices, skin moisturizers, teeth-whiteners |
| Non-eligible | Food product or supplements | Sugar / salt supplements, energy bars, liquid energizers, protein bars, power drinks |
| Non-eligible | Replacement items, attachments, peripherals | Hearing aid batteries, contact-lens containers, etc. when not factory packaged with the original item |
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
CMS, in its annual bid review of proposed plan packages, applies categories of cost-sharing standards as detailed below. MAOs should note that benefit design and cost-sharing amounts approved for a previous contract year are not automatically considered acceptable for the following contract year. A separate and distinct CMS review is conducted each contract year. Throughout this section, the term “cost-sharing” refers to co-payments, coinsurances and deductibles (42 CFR §422.2).
The categories of cost-sharing standards include the following:
To ensure that MAO cost-sharing does not discourage enrollment of higher cost individuals, and to provide for transparent plan benefit designs that permit beneficiaries to better predict their out-of-pocket costs, all local MA plans (employer and non-employer) – including HMOs, HMOPOS, local PPO (LPPO), Regional PPO (RPPO) and PFFS plans – are subject to a mandatory maximum out-of-pocket (MOOP) limit on enrollee cost-sharing for all Part A and Part B services. In addition, both RPPO and LPPO plans are required to have a combined limit on cost-sharing that is inclusive of both in- and out-of-network cost-sharing for all Part A and Part B services. The MOOP dollar limits are set annually by CMS and include all cost-sharing (i.e., deductibles, coinsurance, and co-payments) for Part A and Part B services, although an MA plan may also include supplemental benefits as services subject to the MOOP. CMS also may annually establish a lower, voluntary MOOP limit. Plans that adopt the lower voluntary MOOP limit will have more flexibility in establishing cost-sharing amounts for Part A and Part B services than those that do not elect the voluntary MOOP. MAOs must track enrollee out-of-pocket costs and should notify enrollees when they reach, or are near, the plan’s MOOP limit.
For any dual eligible enrollee, MA plans must count toward the MOOP limit only those amounts the individual enrollee is responsible for paying, net of any state responsibility or exemption from cost-sharing, and not the cost-sharing amounts for services the plan has established in its plan benefit package. Effectively, this means that, for dual eligible enrollees who are not responsible for paying the Medicare Part A and Part B cost-sharing, the MOOP limit will rarely, if ever, be reached. However, plans must still track out-of-pocket spending for these enrollees.
During a contract year, when an enrollee switches to another plan of the same type (for example, from one HMO to another HMO) offered by the plan, his/her accumulated annual contribution toward the annual MOOP limit in the previous plan to date is to be counted towards his/her MOOP limit in the new MA plan. As applicable, this transfer of MOOP applies to both in-network and out-of-network MOOP.
Additionally, MA plans may extend the transferability of the enrollee’s contribution toward his/her annual MOOP so that it applies to an enrollee’s transfer during the contract year to any MA plan type offered by the MAO. For example, if an enrollee makes a mid-year change to move from an HMO to a PPO offered by the same MAO, his/her current contribution toward the MOOP limit may follow the enrollee and be counted towards the MOOP limit in the PPO. This allows those enrollees who are eligible to make mid-year plan changes to freely select among the diverse MA plan options offered by an MAO.
Per Member Per Month (PMPM) Actuarial Equivalent (AE) Cost-sharing Requirement: The actuarially estimated total MA cost-sharing for Part A and Part B services must not exceed cost-sharing for those services in original Medicare. In addition, CMS evaluates particular service categories; inpatient facility, SNF, DME, and Part B drugs, for actuarial equivalence. MA plans should refer to annually published guidance regarding the application of this requirement.
Service Category Cost-sharing Standards: As provided under 42 CFR §422.100(f)(6), MA plan cost-sharing for Part A and Part B services specified by CMS must not exceed levels annually determined by CMS to be discriminatory. In addition, under section 1852(a)(1)(B)(iii) of the Act (as amended by the Affordable Care Act) the cost-sharing charged by MA plans for chemotherapy administration services, dialysis services, and skilled nursing services for which cost-sharing would apply under original Medicare may not exceed the cost-sharing for those services under Part A and Part B.
Discriminatory Pattern Analysis: CMS may perform an additional general discriminatory pattern analysis of cost-sharing to ensure that discriminatory benefit designs are identified and corrected.
Additional cost-sharing guidance:
contracted rate of that service. For example, if the plan's service area consists of two counties with equal frequency of utilization with contracted rates for a particular service of $90 and $110 in the two counties, then the plan may uniformly charge no more than a $50 copay for that service category; and
| Cost Range For service | Co-payment |
|---|---|
| $0 - $199 | $0 |
| $200 - $499 | $40 |
| $500 - $999 | $100 |
| $1000 and above | $200 |
Thus, an MA plan may offer access to two or more physician groups to which different levels of cost-sharing apply, but it may not require that an enrollee receive all needed care during the contract year from a particular provider group. Restricting enrollee choice by requiring that all services be furnished by a specific group within the network has the effect of creating multiple MA plans within one MA plan and, therefore, conflicts with the uniformity of premium and cost-sharing requirement (see 42 CFR §422.100(d)(2)).
The following scenarios are examples of ‘differential cost-sharing’ rather than tiering of medical benefits and are allowed when the variation in cost-sharing is based on:
○ Facility settings for furnishing some services, such as diagnostic imaging services; and ○ In-network versus out-of-network services, as explained in sections 110.2, 110.3 and 110.6 below, and in the POS subsection of section 30.3 above.
However, while MA plans may have ‘differential cost-sharing’ based on facility settings, they should include the enrollee’s entire cost sharing responsibility in a single copay. This is consistent with Medicare Advantage disclosure requirements at 42 CFR §422.111(b)(2) which require that MA plans clearly and accurately disclose benefits and cost sharing. Accordingly, in situations where there is a difference in cost sharing based on place of service, those fees should be combined (bundled) into the cost sharing amount for that particular place of service and clearly reflected as a total copayment in appropriate materials distributed to beneficiaries.
• Dialysis Services: Cost-sharing for dialysis services may not exceed the cost-sharing imposed in original Medicare. The cost-sharing for out-of-network (OON) and out of service area, medically-necessary dialysis services may not exceed the in-network cost-sharing. The cost-sharing charged by MA plans for dialysis services furnished in the service area, but OON, may be higher than the in-network cost-sharing charged by the plan for the services. This guidance is summarized in Table VI.
Table VI: Summary of Dialysis Cost-sharing.
| Cost-sharing for dialysis | In-network | Out-of-network |
|---|---|---|
| In service area | May be higher than the in-network, in service area cost-sharing | |
| Out of service area | Must be the same as in-network, in service area cost-sharing | Must be the same as in-network, in service area cost-sharing |
Post-Stabilization Services: The cost-sharing amount for post-stabilization services must be the same or lower for out-of-network providers as for in-network plan providers.
MA plans are required to cover without cost-sharing all in-network Medicare-covered preventive services for which there is no cost-sharing under original Medicare (42 CFR §422.100(k)). Plans are responsible for monitoring CMS’ National Coverage Determinations and publications in order to ensure they are offering, in a timely manner, all Medicare Part A and Part B services, including the zero cost-sharing preventive services.
MA plans may not charge for facility fees, professional services, or physician office visits if the only service(s) provided during the visit is a preventive service that is covered at zero cost-sharing under original Medicare. However, if during provision of the preventive service, additional non-preventive services are furnished, then the plan’s cost-sharing standards apply.
Enrollees of a plan may directly access (through self-referral to any plan participating provider) in-network screening mammography and influenza vaccine.
Please see section 90 of this chapter for information on National Coverage Determinations (NCDs) which describes the requirements for plan compliance with new NCDs, as well as website resources for monitoring NCDs.
As provided under section 1854(a)(5)(C)(ii) of the Affordable Care Act, and regulations at 42 CFR §422.256(a), CMS may deny bids if CMS determines that a bid proposes too significant an increase in cost-sharing or decrease in benefits from one plan year to the next. CMS uses the Total Beneficiary Cost (TBC) metric as a means of evaluating changes in plan benefits from one year to the next, and evaluating whether such changes impose significant increases in cost-sharing or decreases in benefits. The change in TBC from one year to the next captures the combined financial impact of premium changes and benefit design changes (i.e., cost-sharing changes) on plan enrollees; an increase in TBC is indicative of a reduction in benefits. By limiting the change in the TBC from one year to the next, CMS is able to ensure that enrollees are not exposed to significant cost increases from one plan year to the next. Annually, CMS provides TBC requirements and operational information to plans through the Call Letter and other guidance documents.
A single deductible is a specified dollar amount to be paid annually by the enrollee for health care services or for covered Part D drugs before the plan begins to pay its share of the cost for those benefits. The single deductible amount may apply to all plan services or to specific categories of plan services with the exception of emergency or urgently needed services.
Plans may not charge enrollees the plan-level deductible prior to receiving Emergency Care/Urgently Needed Services and the cost sharing for those services must always contribute to satisfying the MOOP. Plans may count Emergency Care/Urgently Needed Services cost sharing towards the plan-level deductible or plans may choose to not have enrollee cost sharing count towards the plan-level deductible. However, plans must apply this policy uniformly across the entire plan and marketing materials provided to enrollees must be transparent regarding whether or not cost sharing applies toward the plan-level deductible.
In addition to the applicable cost-sharing requirements listed in section 50.1 above, both local and regional PPOs that choose to charge a deductible must establish a single deductible that applies to services furnished in-network and out-of-network (OON). The local or regional PPO may:
Example: A local or regional PPO charges a single deductible of $1,000. The plan limits the application and amount of the deductible to IN inpatient hospital services ($500) and IN physician services ($100). Additionally, the MA plan exempts Medicare covered OON $0 preventive services from the deductible.
Analysis: The local or regional PPO in this example, complies with the PPO deductible guidance because it:
Missed Appointment and Other Charges: MA plans may charge 'administrative fees' to enrollees for missed appointments with contracting providers and for not paying contracting providers required cost-sharing at the time of service.
Under the MA program, such charges are allowable only if the charge is priced in the bid and documentation submitted with the bid clearly shows these charges. Furthermore, those additional charges must be clearly outlined in the notes section of the PBP and in the Evidence of Coverage and ANOC, as applicable.
Contracted and non-contracted providers may charge a fee for missed appointments, provided such fees apply uniformly to all Medicare and non-Medicare patients. This applies even if the MAO itself does not charge an administrative fee for missed appointments.
Neither MA plans nor their contracted providers may require enrollees to create a fund or 'escrow account' for a provider to ensure payment of missed appointment fees. Such a practice creates a barrier to access to care and violates CMS anti-discrimination regulations.
No balance billing: As indicated in section 170 below, an enrollee is responsible for paying non-contracted providers only the plan-allowed cost-sharing for covered services. The MA plan, not the enrollee, is obligated to pay balance billing when it is allowed under Medicare rules. Furthermore, if an enrollee inadvertently paid balance billing which is the plan's responsibility, the plan must refund the balance billing amount to the enrollee.
No reimbursement relationship: Plans may not require enrollees to pay a contracted provider more than the plan's specified cost-sharing for Part A and Part B services; that is, plans may not require enrollees to pay the plan's share of the costs for a service and then reimburse the enrollee.
As provided under section 1860D-14 of the Act, Full Medicaid institutionalized individuals have no cost sharing for covered Part D drugs under their PDP or MA-PD plan. Effective January 1, 2012, section 1860D-14 of the Act also eliminates Part D cost sharing for Full Medicaid individuals who would be institutionalized if they were not receiving home and community-based services (HCBS) either through:
A SNP must determine or an enrollee must demonstrate that s/he is a Full Medicaid individual receiving HCBS under title XIX with the following:
See chapter 16b of the MMCM, "Special Needs Plans" for more information on dual eligible enrollees, SNPs, and D-SNPs at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/mc86c16b.pdf.
The guidance in this section applies to non-employer MA and MA-PD plans of all types. CMS reserves the right to extend the guidance in this section to employer plans in future years.
As provided under 42 CFR §422.254(a) (5) and §422.256(b)(4)(i), CMS annually reviews bids to ensure that an MAO's plans in a given service area are meaningfully different from one another in terms of key benefits or plan characteristics. Although the specific guidelines and criteria for meaningful difference may change, the criteria CMS may use to make this determination include:
Cost-sharing: CMS sets a minimum differential in enrollees' expected out-of-pocket spending between an MAO's plans of the same type in a service area;
Mandatory supplemental benefits offered;
CMS annually publishes guidelines to assist MAOs in creating plan designs in a given area with meaningful differences. MAOs offering more than one plan in a given service area should ensure that enrollees can easily identify the differences in benefit coverage between the plans. Beneficiaries should be able, for example, to determine which plan provides the highest value based on their needs. Plan bids that CMS determines are not meaningfully different during the annual CMS review of submitted plan bids will not be approved and MAOs will be required either to withdraw or consolidate such offerings.
Example: An MAO offers three plans in a service area with the characteristics listed below. Since each plan differs from the other two plans by one of the characteristics described above, this MAO is considered to be offering plans with meaningful differences;
The guidance in this section applies to non-employer MA plans, including SNPs. CMS may review employer plans for low enrollment in future years.
Pursuant to 42 CFR §422.514, CMS may not enter into or renew an MA contract with an organization unless the organization has enrollment of at least:
(1) 5,000 individuals (or 1,500 individuals if the organization is a PSO) are enrolled for the purpose of receiving health benefits from the organization; or
(2) 1,500 individuals (or 500 individuals if the organization is a PSO) are enrolled for purposes of receiving health benefits from the organization and the organization primarily serves individuals residing outside of urbanized areas as defined in §412.62(f) (or, in the case of a PSO, the PSO meets the requirements in §422.352(c)).
However, a waiver of this enrollment may be provided at the time of an initial contract or for the first three years the MA plan is offered. CMS will consider the experience of the organization, its management personnel and its providers; the administrative and marketing abilities of the organization; and the financial solvency and resources of the organization in determining whether the organization is capable of administering and managing an MA contract and is able to manage the level of risk required under the contract to grant a waiver.
As provided under 42 CFR §422.506(b)(1)(iv), CMS may non-renew MA plans that have an insufficient number of enrollees to be considered a viable plan option. Prior to bid submission, CMS annually provides MAOs with criteria CMS uses to identify low enrollment plans and contacts those MAOs that offer plans in the current contract year that are identified as having low enrollment. The MAOs are instructed to either give notice that they are terminating or consolidating the low enrollment plan(s), or submit, within acceptable timeframes, a justification for continuing the plan(s). CMS will review the submitted justifications and make a final decision on the continuation of the plan(s) for the next contract year.
Determining whether an MA plan has sufficient enrollment to remain or be a viable plan option each year requires consideration of many factors, including overall enrollment in the MA program and enrollment in individual plans. CMS will announce in the spring its interpretation and parameters for applying the regulation. These will take into account, in addition to enrollment, the following:
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
Value-Added Items and Services (VAIS) are items and services that are not plan benefits, are not part of the MAO plan’s benefit package and may not be marketed to prospective enrollees, or used as an inducement or incentive for enrollment. VAIS are non-Medicare covered services or items, typically discounts, offered by a VAIS provider to the enrollees of an MA plan. The plan may choose to facilitate access for its enrollees to the VAIS by acting on behalf of the VAIS provider by performing certain administrative activities, such as notifying enrollees about the VAIS or verifying enrollee membership in the plan.
Thus, the MAO incurs either no cost for facilitating enrollees’ access to the VAIS, or the costs are solely administrative. Solely administrative costs are defined as those required to administer the plan’s facilitation of enrollee access to the VAIS, e.g., clerical items or equipment and supplies related to communication about the VAIS (such as phone and postage) or database administration (such as verifying enrollment or tracking utilization). Minimal cost, in and of itself, does not qualify a cost as being “solely administrative.”
It is important to note the following:
An MAO is expected to comply with the following related to VAIS:
Note: Although VAIS may not be included in the plan bid, CMS may review a plan’s VAIS in its audit of the plan or in response to enrollee complaints related to the VAIS.
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
The following are some examples of CMS' approach to VAIS:
Analysis: Because the plan does not incur any medical cost in offering the discount for the routine vision exam out-of-network, by definition, the discount cannot be classified as a benefit, and is therefore, eligible to be offered as a VAIS. Furthermore, because the out-of-network routine vision exam is a VAIS, it may neither be advertised to prospective enrollees nor included in the plan bid.
Analysis: Grocery vouchers may not be offered as a VAIS if the plan incurs a cost for the vouchers. Although the cost may be minimal, it is not solely administrative and therefore, is not consistent with CMS guidance.
Analysis: MA plans must include in the plan benefit package all benefits it furnishes by way of a contract with a provider or insurer on behalf of its enrollees and may not contract to offer such a benefit as a VAIS. The plan may not collect payments from its enrollees for services that are not benefits covered by the plan.
However, if the provider or insurer in the example offers its services at a discounted rate to the MA plan enrollees, who directly pay the provider or insurer for the services, without additional payment from the plan, then the plan may provide access to this discount as a VAIS.
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
MAOs are expected to stay apprised of new and/or changing Medicare Part A and Part B coverage policies, including those that result from CMS's National Coverage Determination (NCD) process. Information regarding NCDs is continuously updated on the CMS website at: http://www.cms.hhs.gov/center/coverage.asp. See section 90.6 of this chapter for a list of CMS website sources containing information.
As discussed in section 10.2 of this chapter, an item or service classified as an original Medicare benefit must be covered by every MA plan if:
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
The contents of this section are governed by statutes and regulations including those set forth at 42 CFR §422.109. The following definitions related to national coverage determinations apply:
○ The average cost of furnishing a single service exceeds a cost threshold that for a calendar year is the preceding year's dollar threshold adjusted to reflect the national per capita growth percentage described at 42 CFR §422.308(a); or
○ The estimated cost of Medicare services furnished as a result of a particular NCD or legislative change in benefits represents at least 0.1 percent of the national average per capita costs.
Medicare coverage policies specify which items and services are covered (or not covered) under Part A or Part B of the Medicare program and under what circumstances (including the clinical criteria under which the item or service must be covered). Medicare coverage policies have several sources:
As indicated in section 10.2 above, MA plans must provide all items and services classified as original Medicare-covered benefits. In applying this rule to NCDs, different rules apply depending on whether the significant cost criterion, described above in section 90.3, has been met.
When CMS determines that a NCD or legislative change in benefits does not meet a criterion for significant cost, the MA plan is required to provide coverage for the NCD or legislative change in benefits and assume risk for the costs of that service or benefit as of the effective date of the NCD or as of the date specified in the legislation/regulation. NCDs are effective on the date that CMS releases the Final Decision Memorandum for the NCD. The NCD effective date is the date when the new or changed benefit/service must be made available to enrollees by the plan. The implementation date in the corresponding Medicare Change Request (CR) /Transmittal guidance (TR) is the latest date by which MA plans must have payment system edits in place and coverage/non-coverage fully implemented for providers/suppliers. Plans must ensure that the items/services are covered, and provider claims paid, retroactive to the NCD effective date. More information related to Medicare CR/TRs and manual guidance may be found in references provided in section 90.6 below.
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
Prior to the adjustment of the annual MA capitation rate, if CMS determines and announces that an individual NCD item, service or legislative change in benefits does meet a criterion for significant cost, then plans are not required to assume risk for the costs of that service or benefit until the contract year for which payments are appropriately adjusted to take into account the significant cost of the service or benefit. However, a plan must pay for the following:
Although the item or service may not be specifically included in the services MAOs must cover under their contract with CMS, MAOs must still provide access to the NCD item or service by furnishing or arranging for the service.
The MACs are responsible for reimbursements for NCD items, services, or legislative changes that are not the legal obligation of the MAO.
Chapter 8 of the MMCM, “Payments to Medicare Advantage Organizations,” contains the detailed rules on payment for NCD items and services or legislative changes in benefits that meet the significant cost threshold. That manual chapter includes a description of services for which MAOs are responsible. Enrollees are responsible for any applicable coinsurance amounts under original Medicare.
Once the annual MA capitation rate, or other payment adjustment, reflects the new costs, the service or benefit is considered included in the MAO’s contract with CMS and is a covered benefit under the contract. The MAO must furnish, arrange, or pay for the NCD service or legislative change in benefits, subject to all applicable rules. MAOs may establish separate plan rules for these services and benefits, subject to CMS review and approval. CMS may, at its discretion, issue overriding instructions limiting or revising the MA plan rules, depending on the specific NCD or legislative change in benefits. For these services or benefits, the enrollee is responsible for any MA plan cost-sharing, as approved by CMS or unless otherwise instructed by CMS.
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
In some instances, one Medicare A/B MAC processes all of the claims for a particular Medicare-covered item or service for all Medicare beneficiaries around the country. This generally occurs when there is only one provider of a particular item or service (for example, certain pathology and lab tests furnished by independent laboratories). In this situation, MA plans must follow the coverage policy reflected in an LCD issued by the A/B MAC that enrolled the provider and processes all of the Medicare claims for that item or service.
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
When there are multiple A/B MACs that have different coverage policies in an MA plan's service area, the MA plan must choose from the following alternatives for its coverage policy. Note: All DME MACs have the same LCDs; therefore, there should not be differences related to DME coverage in a plan's service area.
1. A local MA plan may choose to adopt the coverage policy that applies to original Medicare beneficiaries. In this alternative, the coverage policy that applies to plan enrollees will be that of the A/B MAC with jurisdiction over the state in which the service is furnished to the enrollee.
2. A local MA plan that chooses to adopt a uniform coverage policy that will apply uniformly to all plan enrollees, may choose the A/B MAC coverage policy applicable in its service area that is the most beneficial to enrollees. - The MA plan must make information on the selected coverage policy determinations readily available, including through the plan's website, to all enrollees and health care providers; and - The MAO must notify CMS, through its account manager, 60 days before the date bids are due, if it elects to adopt a uniform local coverage policy for any plan or plans in the subsequent year (42 CFR § 422.101(b)(3)(i)). In preparing this notification, the MAO should include, at a minimum: - An identification of the plan(s) and service area(s) to which the uniform local coverage policy or policies will apply;
○ The competing local coverage policies involved; and
○ A table contrasting the local coverage areas by listing and comparing those policies in each coverage area that represent expansions of Medicare Part A and Part B services.
CMS will review notices provided to evaluate the selected policy or policies on the bases of cost, access, geographic distribution and health status of enrollees. CMS will notify the MAO of its approval or denial of the selected uniform local coverage policy or policies.
1. A regional MA plan may choose to adopt the coverage policy that applies to original Medicare beneficiaries. In this alternative, the coverage policy that applies to plan enrollees will be that of the A/B MAC with jurisdiction over the state in which the service is furnished to the enrollee or
2. A regional MA plan that chooses to adopt a uniform coverage policy must select one of the A/B MACs with jurisdiction in the plan service area and apply the policies of that A/B MAC uniformly to all enrollees of the plan.
• Plans must make information on the selected local coverage policy determinations readily available, including through the plan's website, to all enrollees and health care providers.
• Regional MA plans may not select local coverage policies from more than one A/B MAC and selection of the coverage policy is not subject to CMS pre-approval (42 CFR § 422.101(b)(4)) but must notify CMS, through their account managers, 60 days before the date bids are due, if the plan elects to adopt a uniform local coverage policy for any plan or plans in the subsequent year (42 CFR § 422.101(b)(3)(i)). In preparing this notification, plans should include, at a minimum:
○ An identification of the plan(s) and service area(s) to which the uniform local coverage policy or policies will apply;
○ The competing local coverage policies involved; and
○ A table contrasting the local coverage areas by listing and comparing those policies in each coverage area that represent expansions of Medicare Part A and Part B services.
Note: If a local or regional MA plan adopts a uniform coverage policy as indicated above, that uniform coverage policy only applies to its service area. Services for an enrollee from a provider outside the service area are covered based on the local coverage determinations of that provider's geographic location.
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
In coverage situations where there is no NCD, LCD, or guidance on coverage in original Medicare manuals, an MAO may adopt the coverage policies of other MAOs in its service area.
However, if the MAO decides not to use coverage policies of other MAOs in its service area, the MAO:
The requirement that an MA plan provide coverage for all Medicare-covered services is not intended to dictate care delivery approaches for a particular service. MA plans may encourage enrollees to see more cost-effective provider types than would be the typical pattern in original Medicare, as long as those providers are licensed and working within the scope of their licenses and the plan complies with the provider anti-discrimination rules set forth in 42 CFR §422.205.
An MA plan’s flexibility to deliver care using cost-effective approaches should not be construed to mean that Medicare coverage policies do not apply to the MA program. If original Medicare covers a service only when certain conditions are met, then such conditions must be met in order for the service to be considered part of the original Medicare benefits component of an MA plan. An MA plan may cover the same service when the conditions are not met, but these benefits would then be defined as supplemental.
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
Generally, legislative changes to Medicare coverage rules are established by statute and implemented through notice-and-comment rulemaking. For example, if Medicare Part B coverage is affected, the changes are usually included in the annual Medicare Physician Fee Schedule (MPFS) proposed and final rules, published in the Federal Register every summer and fall, respectively. These rules are codified in the Code of Federal Regulations. Medicare manual guidance corresponding to legislative changes in benefits may also be released in the Medicare Benefit Policy Manual (Pub. 100-02) and/or the Medicare Claims Processing Manual (Pub. 100-04).
Implementation of coverage changes resulting from the NCD process and all related changes to original Medicare claims processing are made through Change Requests (CRs) and Transmittals (TRs) that also are used to update the Medicare National Coverage Determinations Manual (Pub. 100-03) and the Medicare Claims Processing Manual (Pub. 100-04).
Although MA plans have not been required to use original Medicare claims processing systems, MAOs must follow the coverage instructions in the original Medicare CRs/TRs. We also encourage plans to use claims processing guidance as a source of information that will support their implementation of the new benefit/service or other change in coverage.
The following Internet resources provide information on NCDs and LCDs:
The Medicare Coverage webpage located at: http://www.cms.hhs.gov/center/coverage.asp has links that:
Both pending and closed coverage determinations are listed. For each coverage topic CMS provides a staff name and e-mail link so that interested individuals can send questions and provide feedback.
The Medicare National Coverage Determinations Manual, Publication 100-03, accessible at: http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Internet-Only-Manuals-IOMs.html, includes the Medicare national coverage determinations.
Program Transmittals and Change Requests transmit CMS' new policies and procedures on new coverage determinations and Medicare benefits. Links to the Program Transmittals and Change Requests can be found at http://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/index.html; and
Medicare Internet-Only Manuals, located at http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Internet-Only-Manuals-IOMs.html. These manuals, including the Benefit Policy Manual and Claims Processing Manuals, as described above, present information on Medicare coverage of items and services and claims processing. Changes to these manuals are released through Program Transmittals and Change Requests.
An MA plan may create one or more Rewards and Incentives (RI) Programs that provide rewards and/or incentives to enrollees in connection with participation in activities that focus on promoting improved health, preventing injuries and illness, and promoting efficient use of health care resources. The overall goal of RI Programs is to encourage enrollees to be actively engaged in their health care and, ultimately, improve and sustain their overall health and well-being.
An RI Program incentivizes an enrollee to participate in health-promoting services or activities while inspiring a long-term commitment to healthy behaviors. Accordingly, in addition to providing rewards and/or incentives, plans should consider including an enrollee support component within their RI Program design (e.g., coaches or motivators to encourage and assist the enrollee with RI Program engagement).
At this time, RI Programs apply only to Part C (Medicare Advantage) at 42 CFR §422 and may not be offered in connection with any Part D benefits governed by 42 CFR §423.
Pursuant to 42 CFR §422.134, each RI Program offered by an MA plan:
Rewards and incentives associated with the RI Program must:
Rewards and incentives associated with the RI Program may not:
An RI Program is not a benefit. It must be included in the bid as a non-benefit expense but must not be entered in the Plan Benefit Package. Per CMS Office of the Actuary Bidding Guidance, “non-benefit expenses are all of the bid-level administrative and other non-medical costs incurred in the operation of the MA plan.”
The timeframe for earning and redeeming rewards and/or incentives must be within the contract year in which the RI Program has been implemented. In order to prevent the use of rewards as motivation to stay in a plan, RI Programs may not allow enrollees to carry over rewards and/or incentives from one contract year to the next.
MA plans have significant flexibility in designing RI Programs that are specific to their populations’ interests, abilities and needs. Plans are free to determine the specific services, activities, or behaviors that are subject to rewards or incentives within their RI Program design. Health-related services and activities associated with an RI Program may include, for example, the utilization of a particular service(s) or preventive screening benefit(s), adherence to prescribed treatment regimens, attending education/self-care management lessons, meeting nutritional goals, and making and keeping appointments with the doctor.
Plans may not discriminate based on health status, therefore, rewards and incentives based on health outcomes may not be offered. However, enrollees may be rewarded for continued healthy behaviors over time. For example, plans may not provide rewards and incentives for the amount of weight lost or a lowered blood pressure, as those are health
outcomes and health status factors. Instead, the plan may provide rewards and/or incentives to enrollees for reporting their weights or blood pressures at regular intervals.
Plans also may reward sustained behavior changes by enrollees in order to support and promote the ultimate goal of RI Programs, which is lasting, positive changes in health-related behaviors. For example, an RI Program might include rewards and incentives for those enrollees that report that they remain smoke-free at several time intervals after completion of a smoking cessation program.
Note: Completion of a federally mandated survey, though arguably a health-related activity, may not be included in an RI Program because of the potential for biased responses due to the influence of rewards or incentives.
Any RI Program offered by an MA plan must not discriminate against enrollees based on race, gender, chronic disease, institutionalization, frailty, health status or other impairments and must be designed so that all enrollees are able to earn rewards.
The non-discrimination and equal access requirements do not preclude plans from offering RI Programs that target enrollees with a specific disease or chronic condition as long as the RI Program does not discriminate against any enrollee who would otherwise qualify for participation. Thus, any RI Program must accommodate otherwise qualified enrollees who receive services in an institutional setting or who need a modified approach to enable effective participation and attainment of designated rewards and incentives.
For example, while internet-based RI Programs are allowed, an alternate method of earning and/or claiming rewards and incentives must be offered to those enrollees who do not have internet access. Another example is an RI Program in which participants earn a reward for participating in an exercise class. An alternate method of fulfilling an exercise activity must be offered to those individuals who are unable to attend the class, perhaps due to institutionalization, lack of transportation, or are disabled or wheelchair bound.
A caretaker may not participate in place of the enrollee in the services or activities in order to earn rewards or incentives on behalf of the enrollee. The goal of an RI Program is to encourage and maintain healthy behaviors that have a positive impact on enrollees; therefore, the enrollee must participate directly in the RI Program.
All RI Programs must provide the same rewards to all qualifying participants who perform the same action(s). An RI Program may not distinguish enrollees based on their medical encounter history. In other words, plans may not reward enrollees who have historically not utilized appropriate/recommended services at a higher level than other enrollees for participating in a RI Program activity. While RI Programs may aim to encourage more participation in preventive care, they may not discriminate against enrollees who have a good record of participation.
Within an RI Program, rewards and incentives must be earned by completing an entire service or activity (or combination of services/activities), as established by the MA plan, and may not be offered for completion of less than any/all required component(s) of the eligible service or activity. This requirement allows CMS and MA plans to interpret the value of a reward or incentive in relation to the service or activity for which it is being offered.
Plans are expected to reasonably define the scope of the “entire service or activity” within their RI Program design and assign a value of the reward or incentive accordingly. For example, a plan may decide to offer rewards and/or incentives for participation in a smoking cessation program. The plan may decide to give smaller rewards for each class or counseling session attended or may offer a single, larger reward for completing a pre-determined number of classes or counseling sessions.
Consistent with the requirement that rewards and incentives be of a value that may be expected to affect enrollees’ behavior, the service or activity for which rewards and/or incentives are being offered should be at a level that is meaningful.
Rewards and incentives for each RI Program must have values that are expected to elicit intended enrollee behavior but may not exceed the value of the health related service or activity (§422.134(C)(1)(iii)).
At this time, CMS has not identified the monetary values that exceed what is necessary to influence enrollee behavior. There is also no express limit on how often rewards and/or incentives may be offered to enrollees throughout a contract year. Instead, MA plans are to establish reasonable and appropriate values for rewards and/or incentives that comply with §422.134.
If necessary, in the future, we may issue additional guidance applying the regulation standards to specify limits on the value of rewards and incentives.
Rewards and/or incentives may not be offered in the form of cash or monetary rebates, including reduced cost-sharing or premiums. Otherwise, MAOs have considerable flexibility with regard to what may be offered as a reward or incentive.
Gift cards are a permissible form of reward or incentive as long as they are not redeemable for cash. MA plans are encouraged to offer enrollees a choice of gift cards from which to choose in order to account for differences in enrollees' preferences and accessibility of retailers.
Discount coupons are also a permissible form of reward or incentive as long as they are not transferable for cash and follow the valuing guidelines addressed above. However, we would note that coupons that provide only nominal discounts may not provide adequate incentive to drive the intended changes in enrollee behavior and thus not align with CMS valuing guidelines.
An RI Program that is designed so that enrollees earn “points” or “tokens” that can be used to “purchase” rewards (or some variation of this type of program) is permissible as long as the “points” and the rewards that may be “purchased” are earned and valued (according to CMS guidelines as set forth within this guidance and in accordance with §422.134) and are redeemed during the contract year in which they are earned.
Rewards and/or incentives must be tangible items that align with the purpose of the RI Program and must directly benefit the enrollee. For example, a plan's charitable contribution made on behalf of the enrollee does not satisfy the CMS criteria as a permissible reward or incentive because the enrollee who earned the reward does not benefit from such a contribution by the plan. However, the use of points (which are not themselves tangible), to purchase a reward, does satisfy CMS criteria because the points are used by each enrollee to obtain a tangible reward that is of value to the enrollee.
Rewards and/or incentives that are to be won based on probability, including programs in which an enrollee may earn entries into a lottery or drawing in order to receive a reward or incentive of a significant value, are not permissible because all enrollees who participate in and complete the services or activities required of them within the RI Program's design must receive a tangible reward and incentive. The potentially negligible chance of winning the reward in such a scheme (depending on the pool of eligible enrollees) does not qualify as a tangible reward or incentive. Furthermore, RI Programs structured in this manner are potentially vulnerable to fraud and abuse implications.
MA plans may include information about RI Programs in marketing materials as long as those communications are provided to all current and prospective enrollees without discrimination. Additionally, any marketing of RI Programs must be done in conjunction with marketing of plan covered benefits.
Importantly, reward and/or incentive “items” may not be offered to potential enrollees under any circumstances. Nominal gifts as part of promotional activities are separate and distinct from RI Programs. For more information about the marketing aspects of RI Programs as well as promotional activity guidance, see the Medicare Marketing Guidelines at https://www.cms.gov/Medicare/Health-Plans/ManagedCareMarketing/FinalPartCMarketingGuidelines.html.
MA plans will be required to report on RI Programs through the annual Part C Medicare Advantage Reporting Requirements. MA plans offering an RI Program are expected to document and track information regarding their RI Programs and be prepared to provide that information to CMS upon request. Appropriate documentation includes, but is not limited to: date(s) of enrollee-specific participation in RI Program services and activities, rewards and/or incentives attained, how enrollee participation is measured, and available alternative methods of participation.
Part II of this chapter, which begins in section 110, provides information on beneficiary protections, and includes topics such as rules for plan renewals, coordination of benefits, providers, provision of benefits during disaster situations, and educating and enrolling enrollees in Medicaid and Medicare savings programs.
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
An MA plan may specify the providers through whom enrollees may obtain services if it ensures that all original Medicare covered services and supplemental benefits contracted for, by, or on behalf of Medicare enrollees are available and accessible under the coordinated care requirements.
Plans are required to maintain and monitor a network of appropriate providers, supported by written arrangements, that is sufficient to provide adequate access to covered services to meet the needs of the population served. This involves ensuring that services are geographically accessible and consistent with local community patterns of care. In other words, the plan must ensure that contracted providers are distributed so that no enrollee residing in the service area must travel an unreasonable distance to obtain covered services. CMS standards for access are provided by the Health Service Delivery (HSD) tables used to evaluate plan networks during the initial application, service area expansion application, and continued operations throughout the contract year. The HSD process uses a mostly automated process to measure access by county and specialty. The assessment measures used include measuring the number of providers, as well as the average distance and time needed for enrollees to access each provider and facility in each county.
All MAOs are expected to continuously monitor their networks to ensure compliance with contractual obligations and in accordance with 42 CFR 422.112(a)(1)(i). CMS encourages MAOs to use the “organization-initiated” automated review feature in the Network Management Module (NMM) in HPMS. For more information, please refer to the December 23, 2015, HPMS memo “Release of Network Management Module in Health Plan Management System (HPMS).”
In addition, as part of this continuous network self-monitoring, CMS expects that if an MAO becomes aware of network deficiencies at any time or believes that an exception is warranted for a particular specialty in a given service area, then the MAO will alert its CMS Account Manager.
MAOs are required to establish and maintain provider networks that:
plan must arrange for that service to be provided by a qualified non-contracted provider;
Plans may not implement utilization management protocols that create inappropriate barriers to needed care. Prior authorization and referral are two utilization management approaches frequently used by plans and are entered in the PBP; the following definitions and requirements clarify the meaning and appropriate use of these two approaches:
When MAOs submit PBPs for CMS’ review and approval, they attest that the benefits included in those packages “...will be offered in accordance with all applicable Medicare program authorizing statutes and regulations and program guidance that CMS has issued to date...” Thus, MAOs’ PBPs for the upcoming contract year must meet, and continue to meet, CMS network adequacy standards, as outlined in the guidance in this chapter and current MA HSD Network Adequacy Criteria Guidance, which can be found on the MA Applications webpage at: https://www.cms.gov/MedicareAdvantageApps. See 42 CFR §422.112(a)(1)(i).
MAOs have considerable discretion to select the providers with whom to contract in order to build high-performing, cost effective provider networks. They are able to make changes to these networks at any time during the contract year, as long as they continue to furnish all Medicare-covered services in a non-discriminatory manner, meet established access and availability standards and timely notice requirements, and ensure continuity of care for enrollees.
CMS recognizes that significant no-cause network changes may occur during the contract year. MAOs may be in the best position to determine whether or not a provider termination without cause is significant. CMS considers significant changes to provider networks to be those that go beyond individual or limited provider terminations that occur during the routine course of plan operations and affect, or have the potential to affect, a large number of the MAO’s enrollees.
Please note: Significant network changes could result from any no-cause provider termination, whether it is initiated by the MAO or the provider. In addition, significant network changes could result from no-cause provider terminations that are effective at any point during the contract year, whether it is mid-year or on January 1.
An MAO must notify its CMS Account Manager of any no-cause provider termination that the MAO deems to be significant, at least 90 days prior to the effective date of the termination. To the extent possible, CMS would like to ensure that appropriate contingency planning is in place prior to an MAO making any significant network change. For example, an MAO should notify its Account Manager if it is in current contract negotiations with a provider group that would have a significant impact on the network if the negotiations were not successfully concluded.
CMS expects MAOs to take a conservative approach in determining whether a network change is significant by notifying CMS if there is any doubt as to whether the no-cause provider termination represents significant change to the network. This prior notification facilitates CMS oversight and verification of MAO compliance with current CMS network adequacy standards. An MAO that does not notify CMS of network changes that are ultimately deemed significant will be subject to appropriate compliance actions.
Upon CMS notification, CMS may ask the MAO to provide additional information about the network change, and CMS will verify whether the network change is indeed significant. If CMS deems the MAO's network change to be significant, then CMS may ask the MAO to demonstrate its continued compliance with current CMS network adequacy standards through the submission of HSD tables to the NMM.
CMS may also ask the MAO to submit a written plan that provides a detailed description of the steps the MAO will take to ensure that affected enrollees are able to locate new providers that meet their individual needs and describe how continuity of care would be maintained for affected enrollees. MAOs would also provide, upon request, information about the number and outcome of continuity of care requests that they receive so that CMS may confirm that the MAO is in compliance with all applicable requirements.
In addition, CMS may require the MAO to augment its network by contracting with additional providers to meet network adequacy standards or, if necessary in order to meet immediate access needs, to allow enrollees to access care from non-contracted providers and limit enrollee cost-sharing to in-network amounts. Furthermore, it may be necessary for MAOs to allow care to continue to be furnished on an interim, transitional basis, by providers who have been terminated from the network in order to adequately address continuity of care needs for affected enrollees.
Pursuant to 42 CFR §422.111(e), when an MAO makes changes to its provider network, the MAO must make a good faith effort to provide written notice of a termination of a contracted provider at least 30 calendar days before the termination effective date to all enrollees who are patients seen on a regular basis by the provider whose contract is terminating, irrespective of whether the termination was for cause or without cause. When a contract termination involves a primary care professional, all enrollees who are patients of that primary care professional must be notified.
Please note that CMS considers “enrollees who are patients seen on a regular basis by the provider whose contract is terminating” to be “affected enrollees.” An “affected enrollee” as an enrollee who is assigned to, currently receiving care from, or has received care within the past three months from a provider or facility being terminated.
When an MAO makes significant network changes, at any point during the contract year, the MAO must also follow the requirements at 42 CFR §422.111(e). CMS recommends that as a best practice, MAOs making significant no-cause network changes should provide affected enrollees more than the required 30 days advance notice. A longer notification period is important, not only to address enrollee concerns, furnish enrollees with needed assistance in selecting new providers, and manage the continuity of care for those undergoing medical treatment, but also for maintaining enrollee satisfaction. If enrollees are notified sooner than 30 days prior to a significant provider termination, then they will be afforded additional time to transition to a new provider.
CMS expects that when an MAO has 60 days advance notice that a contract with a provider will be terminated (as discussed in section 110.1.2.4 below), the MAO should notify affected enrollees at least 30 days in advance of the contract termination but preferably more than 30 days in advance. For those MAOs that do not have the 60 days advance notice of a contract termination, they must make a good faith effort to notify affected enrollees as soon as possible and at least 30 days before termination.
As a best practice, MAOs should include the following information in notices to enrollees in addition to the mandatory identification of the provider(s) being terminated from the network:
MAOs should also develop detailed scripts, call center talking points and frequently asked questions so it can effectively respond to phone inquiries from enrollees and other stakeholders.
In accordance with 42 CFR §422.202(d)(4), an MAO and a contracting provider must provide at least 60 days written notice to each other before terminating the contract without cause.
Pursuant to 42 CFR § 422.62(b)(4), enrollees who meet the exceptional conditions of being substantially affected by a significant no-cause provider network termination may be afforded a special election period (SEP).
If CMS determines that an MAO’s network change is significant with substantial enrollee impact, then a “significant network change SEP” may be warranted. CMS will use a variety of criteria for making this determination, such as: (1) the number of enrollees affected; (2) the size of the service area affected; (3) the timing of the termination; (4) whether adequate and timely notice is provided to enrollees, (5) and any other information that may be relevant to the particular circumstance(s).
The MAO will be required to notify eligible enrollees of the significant network change SEP if the SEP is granted by CMS. SEPs will not be granted when MAOs make changes to their network that are effective on January 1 of the following contract year, as long as affected enrollees are notified of the changes prior to the AEP.
For more information regarding the significant network change SEP, please see the Medicare Advantage Enrollment and Disenrollment Guidance at: https://www.cms.gov/Medicare/Eligibility-and-Enrollment/MedicareMangCareEligEnrol/index.html.
All MAOs must make timely and reasonable payment to, or on behalf of, plan enrollees for the following services obtained from a provider or supplier that does not contract with the MAO:
Medically necessary dialysis from any qualified provider selected by an enrollee when the enrollee is temporarily absent from the plan’s service area and cannot reasonably access the plan’s contracted dialysis providers. An MA plan cannot require prior authorization or notification for these services. However, the MA plan may provide medical advice and recommend that the enrollee use a qualified dialysis provider if the enrollee voluntarily requests such advice because he/she will be out of area. The MA plan must clearly inform the enrollee that the plan will pay for care from any qualified dialysis provider the enrollee may independently select. Furthermore, the cost-sharing for out-of-network medically necessary dialysis may not exceed the cost-sharing for in-network dialysis;
Services for which coverage has been denied by the MAO and found (upon appeal under subpart M of 42 CFR Part 422) to be services the enrollee was entitled to have furnished, or paid for, by the MAO; and
An MA plan (and an MA MSA plan, after the annual deductible has been met) offered by an MAO generally satisfies its requirements of providing basic benefits with respect to benefits for services furnished by a non-contracting provider if that MA plan provides payment in an amount the provider would have been entitled to collect under original Medicare (see section 170 for guidance on balance billing).
MAOs may negotiate payment amounts with their contracted providers and need not follow original Medicare payment rates. However, in the absence of a mutual agreement between the non-contracted provider and the MAO to receive less than the original Medicare rate, non-contracted providers must accept the original Medicare amount as payment in full. For further information on payment to non-contracted providers and suppliers refer to chapter 6, “Relationships with Providers,” of the MMCM. Additional useful information on payment requirements by MAOs to non-network providers may be found in the “MA Payment Guide for Out-of-network Payments,” at: http://www.cms.hhs.gov/MedicareAdvtgSpecRateStats/downloads/oon-payments.pdf.
When an enrollee visits an in-network provider, even though that in-network provider may work with an out of network provider, (e.g., a diagnostic lab that sends specimens to a central location), then the enrollee is only responsible for in-network cost-sharing.
For further information on an MA plan’s obligation to pay non-contracted providers when a referral to such a provider was made, see section 160 below.
Pursuant to 42 CFR §422.111(b)(3) MAOs must provide the number, mix, and distribution (addresses) of providers from whom enrollees may reasonably be expected to obtain services.
If an MAO chooses to develop a non-model provider directory for either hardcopy or online provider directories, the directory must contain all information and follow all instructions within the CMS model provider directory located at:
http://www.cms.gov/Medicare/Health-Plans/ManagedCareMarketing/MarketingModelsStandardDocumentsandEducationalMaterial.html. This includes the introductory language and disclaimers.
MAOs can find complete website and electronic media related requirements at section 100 of the Medicare Marketing Guidelines.
MAOs must include information regarding all contracted network providers in directories at the time of enrollment. Directories must include information about the number, mix, and distribution of all network providers. MAOs may have separate directories for each geographic area they serve, (e.g., metropolitan areas, surrounding county areas), provided that all directories together cover the entire service area.
MAOs may print a separate directory for each sub-network and disseminate that information to enrollees residing in that particular geographic sub-network. To ensure that enrollees are fully aware of their overall network provider options, plans that furnish their enrollees with directories containing a sub-network of plan providers must also advise enrollees that the complete directory of network providers is available online and that it will be furnished in hard copy upon request.in plans that have sub-networks.
MAOs also may publish separate primary care physician (PCP) and specialty physician directories provided both directories are available, online and hard copy, to enrollees at the time of enrollment and throughout the contract year.
MAOs' MA-PD plans may combine the model provider and model pharmacy directories in one document. The guidance in this section, combined with the specific guidance on pharmacy directories, should be followed when creating a combined provider/pharmacy directory.
MAOs are expected to update directory information any time they become aware of changes. All updates to the online provider directories are expected to be completed within 30 days of receiving information. Updates to hardcopy provider directories must be completed within 30 days, however, hardcopy directories that include separate updates via addenda are considered up-to-date.
MAOs should contact their network/contracted providers on a quarterly basis to update the following information in provider directories:
Phone number; and
Any other changes that affect availability to patients.
MAOs should contact providers using a method that is likely to achieve the highest response rate. It is not sufficient to determine that a group practice is accepting new patients. Outreach does not apply to entities such as hospitals.
All providers listed in hard copy or online directories must have current contracts to participate in the MA plan network. Directories provided during the AEP for the upcoming plan year are expected to fairly represent the network for the upcoming plan year.
Note: Employer/Union-only Group Waiver Plans (EGWP) may direct enrollees to their employer for information on the available providers. Employer/Union-only Group Waiver Plans (EGWP) must comply with the same requirements that are applicable to all MA and PDP plans regarding the provision of hard copy and online directories.
MAOs must make the provider directory available to all enrollees at the time of enrollment, and at least annually thereafter by September 30.
MAOs have some flexibility in how they provide access to their provider directories. MAOs must send all enrollees either the provider directory in hard copy, or a distinct and separate notice (in hard copy) describing where enrollees can find the provider directories online and how enrollees can request a hard copy. This notice must be a stand-alone document (i.e., not bound with other materials) and may be included in the same mailing envelope as the Annual Notice of Change/Evidence of Coverage (ANOC/EOC).
To take advantage of this flexibility under §422.11 to provide a notice of on-line availability instead of providing a hard copy, an MAO must incudes in the notice the following to ensure that enrollees may access a hard copy:
MAOs must post a provider directory for all products offered by service areas or by general geographic area. The provision of accurate provider information and ensuring adequate access to covered services are essential protections for enrollees. Accurate provider directories are critical to helping enrollees make educated decisions about their MA plan choices.
The following formats for the online provider directory are acceptable:
MAOs must also provide the option on their websites for users to request a hard copy provider directory, as applicable. MAOs are expected to mail the requested hard copy directory within three (3) business days of the request.
The following is expected to be included in hardcopy and online provider directories if a directory is for a subset of a service area. Plans must advise members that: “This directory is for .”
MAOs must submit their hardcopy directories to CMS on a yearly basis. All hardcopy directories must be uploaded into HPMS as a non-marketing material under the XXX submission code. All hardcopy directories must be uploaded prior to making the directory available by September 30.
Note that updates and/or addenda pages are not to be uploaded. Because provider directories are considered non-marketing, MAOs should not include a status after the material ID. To distinguish the provider directories as non-marketing, the following material ID should be used: MAO’s contract number, followed by an underscore, followed by a series of alpha numeric characters chosen at the discretion of the MAO, followed by an underscore, followed by the letters “NM” (for example, H1234_ABC123_NM).
HMOs restrict the network of providers from which a beneficiary can receive non-urgent/emergent covered services. HMOs furnish in-network services only.
To ease restrictions on access to out-of-network providers, however, an HMO may offer a point of service (POS) benefit option. The following rules apply to an HMOPOS:
For more information about the POS benefit option for an HMO, see section 30.3 above.
PPOs must furnish all services in-network and out-of-network, but may charge higher cost-sharing for plan covered services obtained out-of-network. The following rules apply to PPO coverage outside the service area:
PPO plans must provide reimbursement for all plan-covered medically necessary services received from non-contracted providers without prior authorization requirements. However, both enrollees and providers have the right to request a prior written advance determination of coverage from the plan prior to receiving/providing services;
PPO plans offering an optional supplemental benefit must offer the same benefit in-network and out-of-network;
Situations may arise where an MA plan cannot establish contracts with providers that meet Medicare access requirements in portions of an RPPO's defined service area. In such cases, RPPOs may meet Medicare access requirements by demonstrating to CMS' satisfaction that there is adequate access to all plan-covered services through arrangements other than through contracted provider (42 CFR §422.112(a)(1)(ii)). Enrollees who receive plan-covered services in non-network areas of an RPPO must be covered at in-network cost-sharing levels for the enrollee.
42 CFR §422.112(c) describes the requirements for an RPPO to apply to CMS to designate a non-contracting hospital as an essential hospital. If CMS approves the application and the hospital continues to meet the requirements at §422.112(c) then the essential hospital is "deemed" to be a network hospital of the RPPO and normal in-network inpatient hospital cost-sharing levels (including the catastrophic limit described in 42 CFR §422.101(d)(2)) apply to all enrollees accessing covered inpatient hospital services in that hospital.
The MA plan must ensure continuity of services through arrangements that include, but are not limited to, the following:
conjunction or through some other means, e.g. a care management system, a nurse case manager, clinical prompts, etc.;
MAOs may offer a variety of plan types, as shown in Table VII below.
Table VII: Plan Type and Access Attributes for Non-emergent Non-urgent care Services
| Plan Type | Is a gatekeeper1 allowed? | Is a network required? | Must benefits be provided In-network and OON? | May Cost-sharing requirements differ In-network/OON |
|---|---|---|---|---|
| HMO | Optional | Must contract | Must provide In-network only | Not applicable |
| HMOPOS | Optional | Must contract | Must provide in-network; must provide specific OON | May have higher cost-sharing OON |
| PPO, RPPO | Optional, In-network; Prohibited Out-of-network (OON) | Must contract2 | Must provide both in-network/OON | May have higher cost-sharing OON |
| MSA and PFFS | Prohibited | May use full, partial, or non-network model | Must provide both in-network/OON | May have higher cost-sharing OON |
1) A gatekeeper, when allowed, is typically, but not necessarily, a PCP. A primary purpose of a gatekeeper is to comply with plan requirements for medically necessary referrals to in-network specialists. A coordinated care plan may require referral by a gatekeeper for in-network dialysis services but is prohibited from requiring gatekeeper referral for out-of-network dialysis services.
2) Although an RPPO must contract with a network, it may, upon obtaining a waiver from CMS, only contract with a network in part of its service area (42 CFR §422.112(a)(1)(ii)).
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
If an MAO contracts with an employer, labor organization, or the trustees of a fund established by one or more employers or labor organizations that cover enrollees in an MA plan, or contracts with a State Medicaid agency to provide Medicaid benefits to individuals who are eligible for both Medicare and Medicaid, and who are enrolled in an MA plan, the enrollees must be provided the same benefits as all other enrollees in the MA plan, with the employer, labor organization, fund trustees, or Medicaid benefits supplementing the MA plan benefits.
An MAO may contract with employers, unions, or State Medicaid Agencies to pay for benefits that complement those that an employee or retiree receives under an MA plan (see 42 CFR §422.106(a)(2)). Some examples of complementary benefits include the following:
These complementary benefits may not be classified as MA benefits and therefore are not regulated or reviewed by CMS. However, the MAO must comply with all state regulations governing such benefits. Refer to chapter 9, “Employer/Union Group Health Plans,” of the MMCM, for further information.
All requirements, rights, and protections that apply to the MA program also apply to all MA plan benefits – that is, the basic, mandatory and optional supplemental benefits discussed in this chapter. By contrast, the employer, labor organization, fund trustees or State Medicaid benefits that complement the MA plan benefits are not considered MA benefits and are therefore beyond the scope of MA regulations. Marketing materials associated with the complementary benefits are also not subject to CMS approval. (See the Medicare Marketing Guidelines for further discussion at: https://www.cms.gov/Medicare/Health-Plans/ManagedCareMarketing/Downloads/2016-Medicare-Marketing-Guidelines-Updated.pdf.)
Medicaid benefits provided through a contract with an MAO to provide coverage for individuals eligible for both Medicare and Medicaid and who are enrolled in an MA plan are subject to Medicaid rules and regulations, including CMS review where applicable.
For more details on employer/union coverage see chapter 9 of the MMCM, “Employer/Union-Sponsored Group Health Plans.”
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
CMS does not pay for services to the extent that there is a third party that is required to be the primary payer. The principles on cost-sharing that are discussed below may not apply in circumstances where CMS has granted an employer group waiver. (See chapter 9 of the MMCM “Employer/Union Sponsored Group Health Plans,” for further discussion.)
This section only applies to collections related to Part C benefits. Special rules apply to the collection of cost-sharing related to Part D benefits offered in an MA-PD plan. These Part D rules are found in chapter 14, “Coordination of Benefits,” of the Prescription Drug Benefit Manual, publication 100-18, located at: http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/Pub100_18.pdf.
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
The MAO must, for each MA plan:
Secondary payer status can arise from legal settlements, as well as other insurance plans. MAOs should refer to the Medicare Secondary Payer Manual, publication 100-05, located at: http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Internet-Only-Manuals-IOMs-Items/CMS019017.html for additional information.
In the case of an enrollee’s coverage by another insurance plan, secondary payer status may, in certain circumstances, depend on:
Whether the enrollee entitlement to Medicare is due to age, ESRD, or disability;
Who is the primary beneficiary of the other insurance plan;
Specifically, but not exclusively, an MAO is the secondary payer in the following situations:
Secondary payer status may also be triggered due to legal settlements. In this case, the MAO is the secondary payer for an MA enrollee when:
Medicare does not pay at all for services covered by a primary GHP. In the case of the presence of workers compensation, no-fault and liability insurance (including self- insurance), Medicare makes conditional payments if the other insurance does not pay promptly. These conditional payments are subject to recovery when and if the other insurance does make payment.
MAOs may not withhold primary payment unless there is a reasonable expectation that another insurer will actually promptly pay primary to Medicare. Thus for example, if an MA enrollee did not have auto insurance, the MAO cannot withhold primary payment on the grounds that the enrollee should have had this insurance because it is a state requirement.
The MAO may bill, or authorize a provider to bill, other individuals or entities for covered Medicare services for which Medicare is not the primary payer, as specified in sections 130.5 and 130.6 below.
If an MA enrollee receives plan-covered services that are also covered under an employer group health plan, state or Federal workers' compensation, no-fault insurance, or any liability insurance policy or plan, including a self-insured plan, the MAO may bill, or authorize a provider to bill any of the following:
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
If an MAO is the secondary payer to a GHP/LGHP and, for a given service, the cost-sharing required by the GHP/LGHP is greater than the cost-sharing required by the MAO then:
Example: If the GHP (the primary payer) has a co-payment of $20 and the MA plan has a co-payment of $10 for a plan-covered service that the enrollee properly received (following all plan requirements), the enrollee may not be held liable for paying more than the MA plan's co-payment of $10. The MAO must hold the enrollee harmless for any amount in excess of the MA plan co-payment of $10.
Consistent with Federal preemption of state law, addressed at 42 CFR § 422.402 and 42 CFR § 422.108, a state cannot take away an MAO's right under Federal law and the MSP regulations to bill, or to authorize providers and suppliers to bill, for services for which Medicare is not the primary payer. The MAO may exercise the same rights to recover from a primary plan, entity, or individual that the Secretary exercises under the MSP regulations as they apply to MA Plans.
(See chapter 8 of the MMCM, 'Payments to Medicare Advantage Organizations' for further discussion of Medicare Secondary Payer and Coordination of Benefits.)
(Rev. 120, Issued: 01-16-15, Effective: 01-01-15, Implementation: 01-01-15)
A service area is a geographical area approved by CMS within which an MA eligible individual may enroll in a particular MA plan offered by an MAO. A local MA plan's service area does not need to be contiguous. A regional PPO's service area must be the entire MA region. The basic requirement of service area is that each MA plan offered by an MAO must be offered to all enrollees in an MA plan's service area and must provide a uniform benefit package and uniform cost-sharing arrangements.
The designation of an MA plan's service area affects the following five items:
MMCM, “Enrollment and Disenrollment”) located at: http://www.cms.gov/Medicare/Eligibility-and-Enrollment/MedicareMangCareEligEnrol/index.html?redirect=/MedicareMangCareEligEnrol/;
In deciding whether to approve an MA plan’s service area, CMS considers whether:
This subsection only applies to local MA plans.
CMS will generally approve only full counties in a service area, in order to prevent the establishment of boundaries that could “game” the county-wide MA payment system by excluding an area of the county where beneficiaries with expected higher health care utilization might reside. However, the counties do not need to be contiguous, and under limited circumstances described below, CMS may approve the inclusion of “partial” counties in a service area.
CMS will consider approving a service area that includes a partial county, if it determines that the inclusion of a partial county is: (1) necessary, (2) non-discriminatory, and (3) in the best interest of the beneficiaries. All three of these factors must be present in order for CMS to approve an exception to the county integrity rule. CMS may also consider the extent to which the proposed service area mirrors the service area of existing commercial health care plans or MA plans offered by the MAO and whether there are other MA plans serving the entire county.
For CMS to determine that a partial county is necessary, an MAO must be able to demonstrate that the MAO cannot establish a provider network to make health care services available and accessible to beneficiaries residing in the portion of the county to be excluded from the service area.
The following examples illustrate how an HMO or other type of local MA plan may have a health care network that is limited to one part of a county and cannot be extended to encompass an entire county.
Example 1: A section of a county has an insufficient number of providers (or insufficient capacity among existing providers) to ensure access and availability to covered services.
For CMS to determine if a partial county is non-discriminatory, an MAO must be able to demonstrate the following:
Note that the existence of other MA plans operating in the entire county may provide evidence that approving a partial county service area application would be discriminatory.
In order for CMS to determine whether a partial county is in the best interest of beneficiaries, an MAO must provide reasonable documentation to support their request. As previously noted, CMS will generally only approve partial counties when it is not possible for an MAO to serve an entire county.
An MAO may not create a service area that excludes portions of a county because it believes enrollees with anticipated higher health care costs or needs reside in the portions of the county to be excluded from the service area.
The Secretary of Health and Human Services (the Secretary) has the right to exercise his or her waiver authority under section 1135 of the Social Security Act if, in addition to a Presidential declaration of a disaster or emergency under the Stafford Act or National Emergencies Act, the Secretary declares a public health emergency under section 319 of the Public Health Service Act. If an 1135 waiver is issued, CMS will identify all plan requirements and responsibilities. Detailed guidance and requirements for MA plans under the section 1135 waiver, including timeframes associated with those requirements and responsibilities, will be posted on the Department of Health and Human Services website, (http://www.hhs.gov/) and the CMS website (http://www.cms.hhs.gov/). MAOs are expected to check these sites frequently during such disasters and emergencies.
Under the Secretary’s section 1135 waiver authority, CMS may authorize DME and A/B MACs to pay for Part C-covered services furnished to enrollees and seek reimbursement from MAOs for those health care services, retrospectively.
In the event of a Presidential emergency declaration, a Presidential (major) disaster declaration, a declaration of emergency or disaster by a Governor, or an announcement of a public health emergency by the Secretary of Health and Human Services, but absent, or prior to the issuance of, a section 1135 waiver by the Secretary, MAOs must:
Waive in full, requirements for gatekeeper referrals where applicable;
Temporarily reduce plan-approved out-of-network cost-sharing to in-network cost-sharing amounts; and
Typically, the source that declared the disaster will clarify when the disaster or emergency is over. If, however, the disaster or emergency timeframe has not been closed 30 days from the initial declaration, and if CMS has not indicated an end date to the disaster or emergency, plans should resume normal operations 30 days from the initial declaration. MAOs not able to resume normal operations after 30 days should notify CMS.
MAOs must disclose their policies about providing benefits during disasters on their plan websites.
If the President has declared a major disaster or the Secretary has declared a public health emergency, MAOs must follow the guidance in chapter 5 of the Prescription Drug Benefit Manual, regarding refills of Part D medications. The Prescription Drug Benefit Manual may be found at: http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/Pub100_18.pdf.
Organization Determinations: An enrollee, or a provider acting on behalf of the enrollee, always has the right to request a pre-service organization determination if there is a question as to whether an item or service will be covered by the plan. If the plan denies an enrollee's (or his/her treating provider's) request for coverage as part of the organization determination process, the plan must provide the enrollee (and provider, as appropriate) with the standardized denial notice (Notice of Denial of Medical Coverage (or Payment)/CMS-10003). For the requirements related to organization determinations and issuance of the standardized denial notice (CMS-10003), see chapter 13 of the MMCM located at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/mc86c13.pdf.
Limitations on Enrollee Liability: CMS considers a contracted provider an agent of the MAO offering the plan. As stated in the preamble to the January 28, 2005 final rule (CMS-4069-F):
“MA organizations have a responsibility to ensure that contracting physicians and providers know whether specific items and services are covered in the MA plan in which their patients are enrolled. If a network physician furnishes a service or directs an MA beneficiary to another provider to receive a plan-covered service without following the plan's internal procedures (such as obtaining the appropriate plan pre-authorization),
then the beneficiary should not be penalized to the extent the physician did not follow plan rules.”
Consequently, when a contracted provider furnishes a service or refers an enrollee for a service that an enrollee reasonably believes is a plan-covered service, the enrollee cannot be financially liable for more than the applicable cost-sharing for that service. If a contracted provider believes an item or service may not be covered for an enrollee, or could be covered only under specific conditions, the appropriate process is for the enrollee or provider to request a pre-service organization determination from the plan.
If a contracted provider refers an enrollee to a non-contracted provider for a service that is covered by the plan upon referral, the enrollee is financially liable only for the applicable cost-sharing for that service. Contracted providers are expected to coordinate care or work with plans prior to referring an enrollee to a non-contracted provider to ensure, to the extent possible, that enrollees are receiving medically necessary services covered by their plan. Furthermore, plans are expected to work with their contracted providers to ensure that clear processes are in place and providers are educated about those processes, including appropriate documentation, to substantiate that a referral has been made.
If a service is never covered by the plan and the plan’s Evidence of Coverage (EOC) provided to the enrollee is clear that the service or item is never covered, the plan is not required to hold the enrollee harmless from the full cost of the service or item. For a service or item that is typically not covered, but could be covered under specific conditions (e.g., dental care that is necessary to treat an illness or injury), the EOC, in and of itself, is not adequate notice of non-coverage for purposes of determining enrollee liability. In such instances, the appropriate process is for the enrollee, or the provider acting on behalf of the enrollee, to request a pre-service organization determination. If the plan denies the service, the plan must issue the standardized denial notice with appeal rights. The enrollee has the right to appeal any denial of a service or item. Plans also must educate their contracted providers about the limits of plan coverage and the need to correctly advise enrollees when providing referrals for covered services. This will prevent confusion related to plan coverage and enrollee financial liability as well as ensure coordination of the care furnished.
When the provider, or the plan acting on behalf of the provider, can show that an enrollee was notified (via a clear exclusion in the EOC or the standardized denial notice) prior to receipt of the item or service that the item or service is not covered by the plan or that coverage is available only if the enrollee is referred for the service by a contracted provider but the enrollee nonetheless receives that item or service in the absence of a referral, the regulation at §422.105(a) does not require the MA plan to hold the enrollee harmless from the full cost of the service or item charged by the provider.
The guidance in this section applies to HMOs (Health Maintenance Organizations), HMOPOS (HMO Point of Service), PPOs (Preferred Provider Organizations), and RPPOs (Regional PPOs).
When enrollees obtain plan-covered services in an HMO, PPO, or RPPO, they may not be charged or held liable for more than plan-allowed cost-sharing. Providers who are permitted to 'balance bill' must obtain the amount in excess of the enrollee's cost-sharing (the balance) for services, directly from the MAO and not from the enrollee.
Note: Under original Medicare rules, a Medicare participating provider (hereinafter referred to as a participating provider) is a provider that signs an agreement with Medicare to always accept assignment. The MACs post lists of Medicare participating providers. Participating providers may never balance bill because they have agreed to always accept the Medicare allowed amount as payment in full. An original Medicare non-participating provider (hereinafter referred to as a non-participating, or non-par, provider) may accept assignment on a case-by-case basis and indicates this by checking affirmatively in field 27 on the CMS 5010 claims form. In these instances, no balance billing of enrollees by the provider is permitted.
The rules governing balance billing as well as the rules governing the MA payment of MA-plan contracting providers, non-contracting providers and original Medicare participating and non-participating providers are listed below by type of provider.
The coinsurance percentage multiplied by the limiting charge, if the MAO uses a coinsurance method for its cost-sharing.
MA-plan, non-contracting, non-participating DME supplier: The MAO must pay the non-contracting non-participating (non-par) DME supplier the difference between the enrollee's cost-sharing and the DME supplier's bill; the enrollee only pays plan-allowed cost-sharing, which equals:
o The copay amount, if the MAO uses a copay for its cost-sharing; or o The coinsurance percentage multiplied by the total provider bill, if the MAO uses a coinsurance method for its cost-sharing. Note that the total provider bill may include permitted balance billing.
For information about payment to providers that have “opted-out” of Medicare, refer to chapter 6 of the MMCM, “Relationships with Providers” at: http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/mc86c06.pdf
Additional useful information on payment requirements by MAOs to non-network providers may be found in “MA Payment Guide for Out-of-network Payments,” at: http://www.cms.hhs.gov/MedicareAdvtgSpecRateStats/downloads/oon-payments.pdf.
MA plans must clearly communicate to enrollees through the Evidence of Coverage (EOC) and Summary of Benefits (SB) their cost-sharing obligations as well as the enrollees' lack of obligation to pay more than the allowed plan cost-sharing as described above.
Advance directives are written instructions, such as living wills or durable powers of attorney for health care, recognized under state law and signed by a patient, that explain the patient's wishes concerning the provision of health care if the patient becomes incapacitated and is unable to make those wishes known.
Pursuant to 42 CFR §422.128, the MAO must:
decisions concerning their medical care, including the right to accept or refuse medical or surgical treatment, and the right to formulate advance directives.
The MAO is permitted to contract with other entities to furnish information concerning advance directive requirements. However, the MAO remains legally responsible for ensuring that the requirements of this section are met. Further details concerning the written information that must be given to enrollees as well as other obligations are outlined below in section 180.4.
The MA program’s advance directive requirements are guidelines that refer to state law, whether statutory or recognized by the courts of the state. Therefore, MAOs must comply with the advance directive requirements of the states in which they provide services. CMS cannot provide detailed guidelines as to what constitutes best efforts in each state. Medicare regulations give MAOs and states a great deal of flexibility, and CMS will work with the MAO (and the state, if needed) to ensure that advance directive requirements conform to Federal law. Changes in state law must be reflected in the information MAOs provide their enrollees as soon as possible, but no later than 90 days after the effective date of the state law or the date of the court order.
The written information provided to enrollees must, at a minimum, include a description of the MAO’s written policies on advance directives, including an explanation of the following:
If the MAO cannot implement an advance directive as a matter of conscience, it must issue a clear and precise written statement of this limitation. The statement must include information that:
If an enrollee is incapacitated at the time of initial enrollment and is unable to receive information due to an incapacitating condition, the MAO may give advance directive information to the enrollee’s family or surrogate. The MAO is not relieved of its obligation to provide this information to the enrollee once s/he is no longer incapacitated or unable to receive such information. Follow-up procedures must be in place to ensure that the information is given directly to the individual at the appropriate time.
The MAO must provide for community education regarding advance directives either directly or in concert with other providers or entities. Separate community education materials may be developed and used at the discretion of the MAO for separate parts of the community. Although the same written materials are not required for all settings, the material should define what constitutes an advance directive, emphasizing that an advance directive is designed to enhance an incapacitated individual’s control over medical treatment, and describe applicable state law concerning advance directives. An MAO must be able to document its community education efforts.
The MAO is not required to provide care that conflicts with an advance directive. The MAO is not required to implement an advance directive if, as a matter of conscience, the MAO cannot implement an advance directive and state law allows any health care provider or any agent of the provider to conscientiously object.
An MAO may not condition the provision of care or otherwise discriminate against an individual based on whether or not the individual has executed an advance directive. Furthermore, the MAO must inform individuals that complaints concerning noncompliance with the advance directive requirements may be filed with the State Survey and Certification Agency.
The Part C EOB is an ad hoc enrollee communication that provides MA enrollees with clear and timely information about their medical claims to support informed decisions about their healthcare options. MAOs are required to issue EOBs that include the information reflected in the CMS-developed templates. For additional information, please see the final templates and instructions at: http://www.cms.gov/Medicare/Health-Plans/ManagedCareMarketing/MarketingModelsStandardDocumentsandEducationalMaterial.html.
This guidance pertains to Medicare contracting organizations (and entities with which they contract) that educate their current Medicare (including Part C, Part D and Cost plan) enrollees about Medicaid and/or Medicare Savings Programs, assist enrollees with determining potential eligibility for those programs and helping enrollees actually enroll in those programs. This guidance also pertains to organizations that help enrollees maintain their eligibility and enrollment in these programs.
This guidance on educating and enrolling enrollees in financial assistance programs in no way affects or relates to an MAO's responsibility for determining an enrollee's, or potential enrollee's, eligibility to enroll in the MAO's Dual-Eligible Special Needs Plan (D-SNP). Refer to the MMCM chapter 2 for guidance on D-SNP eligibility and enrollment.
MAOs should be aware of how an enrollee's eligibility for Medicaid might affect their enrollees' continued plan enrollment in those states or counties where Financial
Alignment Initiative demonstrations with passive enrollment exist. More information, including state-specific names for the Financial Alignment Initiative, is available at https://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/FinancialAlignmentInitiative/FinancialModelstoSupportStatesEffortsinCareCoordination.html.
MAOs that provide education and/or enrollment assistance to enrollees must provide this across the full scope of Medicaid and Medicare Savings Programs:
MAOs may conduct education and enrollment assistance for only a portion of its plan membership. Selection of the focus population may be based upon demographic data or on a specific geographic area. However, the MAO must provide outreach to all enrollees within those pre-identified population segments. Additionally, if the MAO receives an inquiry from a plan enrollee not previously identified in the targeted group, it must provide assistance to that enrollee as if he or she had been included in the initial group.
In its education and enrollment assistance programs, the MAO must include the following elements in its written and oral communications with plan enrollees:
The MAO must coordinate its education and enrollment efforts with the appropriate State Medicaid Agency and local SHIP offices so that these entities are aware of the MAO’s efforts.
MAOs may provide assistance to the enrollee in completing applications for financial assistance including submitting the paperwork to the appropriate State office.
At any time, CMS may request, and the MAO must provide, any information related to the education and enrollment assistance program. This includes, but is not limited to, the information listed below. Should any of that information be unavailable or show lack of compliance with the required elements of the program, CMS may take compliance actions against the MAO.
Executed contracts with all external entities involved in the outreach process. This includes contracts with any subcontractors taking part in the activities;
Supporting documentation from the appropriate state agency providing specific state income requirements for each savings program level, and names and contacts within the appropriate state agency/agencies;
Telephone scripts or other outreach assistance scripts that will guide representatives in answering enrollees’ questions or discussing the assistance available to them. Such scripts must include a privacy statement clarifying that the enrollee is not required to provide any information to the representative and that the information provided will in no way affect the enrollee’s membership in the plan.
| Rev # | Issue Date | Subject | Impl Date | CR# |
|---|---|---|---|---|
| R116MCM | 01/16/2015 | Chapter 4, Quality Improvement Program | 01/01/2015 | N/A |
| R115MCM | 08/23/2013 | Chapter 4,'Benefits and Beneficiary Protections' | 08/23/2013 | N/A |
| R107MCM | 06/22/2012 | Chapter 4,'Benefits and Beneficiary Protections' | 06/22/2012 | N/A |
| R97MCM | 05/20/2011 | Chapter 4,'Benefits and Beneficiary Protections' | 05/20/2011 | N/A |
| R94MCM | 12/03/2010 | Chapter 4,'Benefits and Beneficiary Protections' | 12/03/2010 | N/A |
| R92MCM | 12/18/2009 | Chapter 4,'Benefits and Beneficiary Protections' | 12/18/2009 | N/A |
| R87MCM | 06/08/2007 | Update of Chapter 4,'Benefits and Beneficiary Protections' | 06/08/2007 | N/A |
| R72MCM | 09/30/2005 | Changes in Manual Instructions for Benefits and Beneficiary Protections | N/A | N/A |
| R61MCM | 09/03/2003 | Emergency and Urgently Needed Services | N/A | N/A |
| R49MCM | 04/09/2004 | Access and Availability Rules for Coordinated Care Plans and Continuity of Care | N/A | N/A |
| R43MCM | 01/09/2004 | Sources for Obtaining Information | N/A | N/A |
| R36MCM | 10/31/2003 | Miscellaneous Changes | N/A | N/A |
| R23MCM | 06/06/2003 | Initial Issuance of Chapter | N/A | N/A |
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