Medicare Program; Establishment of the Medicare Advantage Program, 76196-76198 [05-24446]

Agencies

• Centers for Medicare & Medicaid Services
• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 70, Number 246 (Friday, December 23, 2005)]
[Rules and Regulations]
[Pages 76196-76198]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-24446]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 422

[CMS-4069-F4]
RIN 0938-AN06


Medicare Program; Establishment of the Medicare Advantage Program

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Final rule; correcting amendment.

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SUMMARY: This document corrects technical errors that appeared in the 
final rule published in the Federal Register on January 28, 2005 
entitled ``Establishment of the Medicare Advantage Program.''

DATES: Except amendments to Sec. Sec.  422.316 and 422.503, this final 
rule is effective March 22, 2005. Section 422.316(a), which was stayed 
from September 1, 2005, until January 1, 2006, by FR Doc. 05-17280 
published on September 1, 2005 (70 FR 52023), is effective January 1, 
2006. Section 422.503(b)(4)(ii) is effective December 23, 2005.

FOR FURTHER INFORMATION CONTACT: Christopher McClintick, (410) 786-
4682.

SUPPLEMENTARY INFORMATION:

I. Background

    In FR Doc. 05-1322 of January 28, 2005 (70 FR 4588), there were 
several errors that we identified and corrected in a correcting 
amendment published September 1, 2005 (FR Doc. 05-17285, 70 FR 52023). 
Based on further review of the January 28, 2005, final rule, we are 
making additional typographical and conforming changes. We identify 
these changes in the ``Summary of Errors'' section and correct these 
errors in the ``Correction of Errors'' section below. The provisions in 
this correcting amendment are effective as if they were included in the 
final rule published on January 28, 2005. Accordingly, with the 
exception of the revisions to Sec.  422.316(a), which are stayed until 
January 1, 2006, and Sec.  422.503(b)(4)(ii), which are effective 
December 23, 2005, the corrections are effective retroactive to March 
22, 2005, the effective date of most of the provisions of the January 
28, 2005 final rule.

II. Summary of Errors

    The errors we are correcting in this correcting amendment pertain 
to the regulations text only. The changes follow the sequence of the 
CFR sections affected.
    In Sec.  422.2 of the final rule, in the definition of ``Provider 
network,'' we inadvertently did not include a reference to a ``network 
Private Fee-for-Service (PFFS) plan,'' a new option made possible by 
the Medicare Prescription Drug, Improvement, and Modernization Act of 
2003 (MMA).
    In Sec.  422.101, in paragraph (b)(4), we inadvertently referenced 
paragraph (b)(3) when specifying an exception to the requirements 
concerning the review of uniform local coverage policies, instead of 
(b)(3)(ii), the paragraph upon which the exception is based.
    In Sec.  422.112, we are revising paragraph (c)(5), which specifies 
the requirements for designation as an essential hospital, to clarify 
that the requirement applies to hospitals that are already designated 
as an essential hospital.
    In Sec.  422.216, we are revising paragraphs (b)(1)(i) and 
(b)(1)(iii) to conform to the changes we made in Sec.  422.114(c) as a 
result of the changes to section 1852(j) of the Social Security Act 
(the Act), which explicitly allows PFFS plans to charge differential 
cost sharing in certain instances.
    Also, in Sec.  422.216, which concerns provider credentialing 
requirements, in paragraph (i) we are correcting typographical errors 
that resulted in the reference to two non-existent regulations text 
sections.
    In Sec.  422.256, we are revising paragraph (b)(3) to remove a 
confusing and inadvertent reference to Medicare Savings Account (MSA) 
plans.
    In Sec.  422.316, we are revising paragraph (a) to more clearly 
indicate that, consistent with section 1833(a)(3)(B) of the Act, the 
supplemental payment CMS will make directly to the Federally Qualified 
Health Center (FQHC) is net of what the FQHC may charge as cost sharing 
under its contract with the Medicare Advantage (MA) organization, not 
the cost sharing amounts that the FQHC actually collects.
    In Sec.  422.503, we are revising paragraph (b)(4)(ii) to revert to 
a paragraph concerning the administrative and management arrangements 
necessary to qualify as an MA organization that was inadvertently 
replaced in the final rule. We are making one technical change to the 
provision, to refer to ``quality improvement'' instead of ``quality 
assurance,'' to conform to the change in terminology implemented as 
part of the MMA.

III. Waiver of Proposed Rulemaking

    We ordinarily publish a notice of proposed rulemaking in the 
Federal Register to provide a period for public comment before the 
provisions of a rule take effect in accordance with section 553(b) of 
the Administrative Procedure

[[Page 76197]]

Act (APA) (5 U.S.C. 553(b)). However, we can waive this notice and 
comment procedure if the Secretary finds, for good cause, that the 
notice and comment process is impracticable, unnecessary, or contrary 
to the public interest, and incorporates a statement of the finding and 
the reasons therefore in the notice.
    Section 553(d) of the Administrative Procedure Act ordinarily 
requires a 30-day delay in effective date of final rules after the date 
of their publication in the Federal Register. This 30-day delay in 
effective date can be waived, however, if an agency finds for good 
cause that the delay is impracticable, unnecessary, or contrary to the 
public interest, and the agency incorporates a statement of the 
findings and its reasons in the rule issued. In addition, section 
1871(e)(1)(B) of the Act provides that substantive changes may take 
effect before the end of the 30-day period that begins on the date that 
the Secretary has issued the substantive change only if the waiver of 
the 30-day period is necessary to comply with statutory requirements or 
the application of the 30-day delay is contrary to the public interest.
    Most of the revisions contained in this rule concern conforming 
changes, correcting cross references, and typographical errors, and 
therefore, are not substantive. Because they are not substantive, we 
find that public comment on these revisions is not necessary. The 
revisions do not represent changes to our policy, and the public 
interest would, as a result, be best served by timely correction of 
these technical errors. A delay in the applicability of the non-
substantive changes would be contrary to public interest in that such 
corrections are necessary for, especially, plans transitioning to the 
new Medicare Advantage program.
    One correction that could be viewed as substantive is the change to 
Sec.  422.503(b)(4)(ii). With respect to this provision, we are 
revising this paragraph to include language that we had inadvertently 
deleted pertaining to the administrative and management qualifications 
of an MA organization. In the case of this substantive correction, we 
find that public comment is unnecessary because the correction removes 
an unintended change that was never proposed, not commented on by the 
public, and not discussed in the preamble to the final rule, and 
reverts to the language that was in place prior to the effective date 
of the final rule (except for a technical change of ``quality 
assurance'' to ``quality improvement'' to reflect a terminology change 
implemented in the MMA). We believe that failure to correct this error 
would result in confusion for MA organizations, which is contrary to 
the public interest. We also find that the 30-day delay ordinarily 
called for under the APA and section 1871(e)(1)(B) of the Act is 
contrary to the public interest because the incorrect language that 
inadvertently replaced the affected section on administrative and 
management qualifications could, if left in place, result in confusion 
when the majority of changes to the MA program implemented as a result 
of the MMA begin on January 1, 2006.
    Section 1871(e)(1)(A) of the Act, as amended by section 903(a) of 
Pub. L. 108-173, provides that a substantive change in regulations 
shall not be applied retroactively to items and services furnished 
before the effective date of the change, unless the Secretary finds 
that such retroactive application is necessary to comply with statutory 
requirements or failure to apply the change retroactively would be 
contrary to the public interest.
    The provisions of this correcting amendment that apply 
retroactively make no substantive changes, but merely correct minor 
technical errors. Failure to make these changes retroactive to March 
22, 2005, is contrary to the public interest because of the confusion 
that could result from the technical errors identified above. It is in 
the public interest to make the corrections retroactive in that it will 
help prevent confusion among plans that must now follow these 
requirements beginning January 1, 2006.

IV. Correction of Errors

    Make the following corrections to the regulation text in the 
January 28, 2005 final rule (70 FR 4588):

List of Subjects in 42 CFR Part 422

    Administrative practice and procedure, Health facilities, Health 
maintenance organizations (HMO), Medicare, Penalties, Privacy, 
Reporting and recordkeeping requirements

0
Accordingly, 42 CFR chapter IV is corrected by making the following 
correcting amendments to part 422:

PART 422--MEDICARE ADVANTAGE PROGRAM

0
1. The authority citation for part 422 continues to read as follows:

    Authority: Secs. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395hh)

0
2. Amend Sec.  422.2, by revising the definition of ``Provider 
network'' to read as follows:


Sec.  422.2  Definitions.

* * * * *
    Provider network means the providers with which an MA organization 
contracts or makes arrangements to furnish covered health care services 
to Medicare enrollees under an MA coordinated care plan or network PFFS 
plan.
* * * * *


Sec.  422.101  [Corrected]

0
3. Amend Sec.  422.101 paragraph (b)(4), by removing the reference 
``(b)(3)'' and adding in its place the reference ``(b)(3)(ii).''

0
4. Amend Sec.  422.112, by revising paragraph (c)(5) to read as 
follows:


Sec.  422.112  Access to services.

* * * * *
    (c) * * *
    (5) The hospital that is an essential hospital under this paragraph 
provides convincing evidence to CMS that the amounts normally payable 
under section 1886 of the Act (and which the MA regional plan has 
agreed to pay) will be less than the hospital's actual costs of 
providing care to the MA regional plan's enrollee.
* * * * *

0
5. Amend Sec.  422.216 by--
0
A. Revising paragraph (b)(1)(i).
0
B. Revising paragraph (b)(1)(iii).
0
C. Revising paragraph (i).
    The revisions read as follows:


Sec.  422.216  Special rules for MA private fee-for-service plans.

* * * * *
    (b) * * *
    (1) * * *
    (i) Contract providers and ``deemed'' contract providers may charge 
enrollees no more than the cost-sharing and, subject to the limit in 
paragraph (b)(1)(ii) of this section, balance billing amounts that are 
permitted under the plan, and these amounts must be the same for 
``deemed'' contract providers as for those that have signed contracts 
in effect, unless access requirements with respect to a particular 
category of health care providers are met solely through Sec.  
422.114(a)(2)(ii) and the MA organization imposes higher beneficiary 
copayments as permitted under Sec.  422.114(c).
* * * * *
    (iii) The MA organization must specify the amount of cost-sharing 
and balance billing in its contracts with providers and these amounts 
must be the same for ``deemed'' contract providers as for those that 
have signed contracts in effect, unless access requirements with 
respect to a

[[Page 76198]]

particular category of health care providers are met solely through 
Sec.  422.114(a)(2)(ii) and the MA organization imposes higher 
beneficiary copayments as permitted under Sec.  422.114(c).
* * * * *
    (i) Provider credential requirements. Contracts with providers must 
provide that, in order to be paid to provide services to plan 
enrollees, providers must meet the requirements specified in Sec. Sec.  
422.204(b)(1)(i) and (b)(3).

0
6. Amend Sec.  422.256, by revising paragraph (b)(3) introductory text 
to read as follows:


Sec.  422.256  Review, negotiation and approval of bid.

* * * * *
    (b) * * *
    (2) * * *
    (3) Limitation on enrollee cost sharing. For coordinated care plans 
(including regional MA plans and specialized MA plans) and private fee-
for-service plans:
* * * * *

0
7. Amend Sec.  422.316 by revising paragraph (a) to read as follows:


Sec.  422.316  Special rules for payouts to Federally qualified health 
centers.

* * * * *
    (a) CMS will pay the amount determined under section 1833(a)(3)(B) 
of the Act directly to the FQHC at a minimum on a quarterly basis, less 
the amount the FQHC would receive for the MA enrollee from the MA 
organization (which includes the cost sharing amount the FQHC may 
charge an enrollee, as established in the contract between the FQHC and 
the MA organization); and
* * * * *

0
8. Amend Sec.  422.503 by revising paragraph (b)(4)(ii) to read as 
follows:


Sec.  422.503  General provisions.

* * * * *
    (b) * * *
    (4) * * *
    (ii) Personnel and systems sufficient for the MA organization to 
organize, implement, control, and evaluate financial and marketing 
activities, the furnishing of services, the quality improvement 
program, and the administrative and management aspects of the 
organization.
* * * * *

(Catalog of Federal Domestic Assistance Program No. 93.773, 
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)

    Dated: December 20, 2005.
Ann C. Agnew,
Executive Secretary to the Department.
[FR Doc. 05-24446 Filed 12-22-05; 8:45 am]
BILLING CODE 4120-01-P