Medicare Program; Implementing Certain Provisions of the Consolidated Appropriations Act, 2021 and Other Revisions to Medicare Enrollment and Eligibility Rules, 66454-66511 [2022-23407]

Agencies

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

[Federal Register Volume 87, Number 212 (Thursday, November 3, 2022)]
[Rules and Regulations]
[Pages 66454-66511]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-23407]



[[Page 66453]]

Vol. 87

Thursday,

No. 212

November 3, 2022

Part IV





 Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Parts 400, 406, 407, et al.





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

Federal Register / Vol. 87, No. 212 / Thursday, November 3, 2022 / 
Rules and Regulations

[[Page 66454]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

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

[CMS-4199-F]
RIN 0938-AU85


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

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

ACTION: Final rule.

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

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

FOR FURTHER INFORMATION CONTACT: 
    Major Bullock, (410) 786-8974, or Steve Manning (410) 786-1961--
General questions.
    Steve Manning, (410) 786-1961, or Carla Patterson (410) 786-8911--
For inquiries related to section 120 of the CAA.
    Gail Sexton, (410) 786-4583, or Major Bullock, (410) 786-8974--For 
inquiries related to section 402 of the CAA.
    Melissa Heitt, 410-786-4494--For inquiries related to section 
402(f) (Medicare Savings Programs) of the CAA.
    Carla Patterson, (410) 786-8911--For inquiries related to the 
Medicare enrollment form.
    Kim Glaun, (410) 786-3849--For inquiries related to State payment 
of Medicare premiums.

SUPPLEMENTARY INFORMATION:

I. Summary

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

    Medicare is a Federal program to provide health insurance for 
people age 65 and older, and those under 65 with certain disabilities 
or End-Stage Renal Disease (ESRD). Medicare consists of four distinct 
parts, commonly referred to as Medicare Parts A, B, C and D. Medicare 
Part A, sometimes referred to as hospital insurance (HI), covers 
inpatient hospital services, skilled nursing care, hospice care, and 
some home health services. Individuals must meet certain conditions to 
be entitled to Part A. Medicare Part B, or supplementary medical 
insurance (SMI), is an optional benefit that helps cover medically 
necessary services and supplies like physicians' services, durable 
medical equipment (DME), outpatient care, and other medical services 
that Part A does not cover, including many preventive services. 
Together, Medicare Parts A and B comprise ``original'' or 
``traditional'' Medicare. Most beneficiaries are automatically enrolled 
in Part A and Part B by the Social Security Administration (SSA) or the 
Railroad Retirement Board (RRB) when they turn 65 because they are 
already receiving social security or RRB retirement benefits. In 
addition, if an individual has been receiving Social Security or 
Railroad Retirement Disability benefits for 24 months, they will 
automatically be enrolled by SSA or the Railroad Retirement Board in 
Medicare Parts A and B.
    The first opportunity individuals have to enroll in Part B is 
during their initial enrollment period (IEP). The IEP is a 7-month 
period that usually begins 3 months before the month in which an 
eligible individual turns 65 and ends 3 months after the first month of 
eligibility. The next opportunity for eligible individuals who do not 
enroll in Part B during their IEP to enroll in Part B, if they choose 
to do so, is in the general enrollment period (GEP) which runs from 
January 1st through March 31st each year. Currently, an individual's 
entitlement (coverage period effective date) under Part B depends on 
the enrollment period and the month in which the individual enrolls, 
according to the requirements in sections 1837 and 1838 of the Social 
Security Act (the Act).
    For those who enroll in Medicare Part B during any of the first 3 
months of their IEP, coverage is effective the first month they become 
eligible for Medicare (such as age 65 or the 25th month of entitlement 
to monthly Social Security or railroad retirement benefits based on 
disability). However, for those who enroll in any of the last 4 months 
of their IEP, their coverage becomes effective after their month of 
enrollment, with the effective date of coverage varying depending on 
the month in which they enroll. For eligible individuals who enroll 
during the GEP, coverage is effective the July 1 following the month in 
which the individual enrolls.
    Section 120 of the Consolidated Appropriations Act, 2021 (CAA), 
Public Law (Pub. L.) 116-260, Division CC, title I, section 120 
(December 27, 2020), modified the requirements in section 1838 of the 
Act, pertaining to individuals enrolling in Part B after not being 
automatically enrolled, or who are re-enrolling in Part B after 
disenrollment. Specifically, the CAA revised sections 1838(a)(2)(C), 
1838(a)(3)(A), and 1838(a)(2)(D) of the Act to provide that for 
individuals who become eligible for Medicare on or after January 1, 
2023, and enroll in Part B during the last 3 months of their IEP, 
entitlement would begin the first day of the month following the month 
in which they enroll. We proposed conforming changes to our regulations 
at 42 CFR part 407 to implement these Part B changes. In addition, 
while the statutory provisions of section 120 of the CAA primarily 
affect individuals enrolling in Part B, those changes will also affect 
the requirements applicable to the limited number of individuals 
enrolling in Part A who are not entitled to premium-free Part A. We 
proposed conforming modifications to our regulations at 42 CFR part 406 
to reflect those Part A changes.
    Additionally, section 120 of the CAA established new section 
1837(m) of the Act, which provides authority for the Secretary of the 
Department of Health and Human Services (HHS) (the Secretary) to 
establish special enrollment periods (SEPs) for individuals who are 
eligible to enroll in Medicare and meet such exceptional conditions as 
the Secretary may provide, effective January 1, 2023. Corresponding 
changes in section 1838(g) of the Act provides the Secretary the 
discretion to determine the effective date of entitlement for 
individuals who enroll under an SEP for exceptional conditions, and 
amendments to section 1839(b) of the Act exempt individuals enrolling 
under such an SEP from being subject to a late enrollment penalty 
(LEP). We proposed to establish several SEPs for exceptional conditions 
that would be incorporated

[[Page 66455]]

in our regulations under 42 CFR parts 406 and 407.

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

    ESRD is a medical condition in which a person's kidneys cease 
functioning permanently, leading to the need for a regular course of 
long-term dialysis or a kidney transplant to maintain life. A kidney 
transplant is ultimately considered the best treatment for ESRD. 
Section 226A of the Act includes a provision that enables certain 
individuals diagnosed with ESRD to be entitled to Medicare, regardless 
of age. If an individual with ESRD applies for Medicare and is entitled 
to Medicare Part A and eligible for Part B benefits, Medicare provides 
coverage for all covered medical services, not only those related to 
the kidney failure condition. When an individual receives a kidney 
transplant, Medicare coverage extends for 36 months after the month in 
which the individual receives the transplant. Currently, after the 36th 
month, Medicare coverage ends unless the individual is eligible for 
Medicare on another basis, such as age or disability. Medicare Part B 
covers medical and other health services including, as specified in 
section 1861(s)(2)(J) of the Act, prescription drugs used in 
immunosuppressive therapy furnished to an individual who receives an 
organ transplant for which Medicare payment is made. Kidney transplant 
recipients must take immunosuppressive drugs to help prevent their 
immune systems from rejecting the transplanted kidney. If a 
transplanted kidney is rejected, the individual would revert to ESRD 
status and again need dialysis treatment or another transplant.
    Under current law, Medicare Part B beneficiaries have coverage for 
such immunosuppressive drug therapy for as long as they remain eligible 
for and enrolled in Medicare Part B. However, section 226A(b)(2) of the 
Act currently requires that entitlement to Medicare Part A and 
eligibility to enroll under Part B for ESRD beneficiaries ends with the 
36th month after the month in which the individual receives a kidney 
transplant (see also 42 CFR 406.13(f)(2)). Section 402 of the CAA 
amended sections 226A(b)(2) (and made conforming changes to sections 
1836, 1837, 1838, 1839, 1844, 1860D-1, 1902, and 1905 of the Act) to 
make certain individuals eligible for enrollment under Medicare Part B 
solely for the purpose of coverage of immunosuppressive drugs described 
in section 1861(s)(2)(J) of the Act. Effective January 1, 2023, this 
provision allows certain individuals whose Medicare entitlement based 
on ESRD would otherwise end after a kidney transplant to continue 
enrollment under Medicare Part B only for the coverage of 
immunosuppressive drugs described in section 1861(s)(2)(J) of the Act. 
These individuals would not receive Medicare coverage for any other 
items or services (under either Part A or Part B), and would only be 
eligible for immunosuppressive drug coverage under Part B if they are 
not enrolled in certain other types of coverage, as described in 
``Eligibility for the Part B-ID Benefit'' (section II.B.2.b. of this 
final rule). Section 402 of the CAA also amended the Medicare Savings 
Programs (MSPs) under sections 1905(p)(1)(A) and 1902(a)(10)(E) of the 
Act to pay the Part B premiums and in some cases the costs of the Part 
B deductible and coinsurance for immunosuppressive drug coverage for 
certain low-income individuals.

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

    Individuals who receive monthly Social Security or railroad 
retirement benefits at age 65 or have been entitled to monthly Social 
Security or railroad retirement benefits based on disability benefits 
for more than 24 months, are automatically entitled to Part A and do 
not have to file a separate application in order to enroll in premium-
free Part A. These individuals are automatically enrolled (auto-
enrolled) by the Social Security Administration or the Railroad 
Retirement Board into Part A when they reach age 65 or their 25th month 
of entitlement to Social Security or railroad retirement benefits based 
on disability. Individuals who become eligible for premium-free 
Medicare but who are not auto-enrolled, either because they have 
delayed receiving Social Security or railroad retirement benefits, or 
are not eligible for such benefits but are otherwise eligible to 
receive premium-free Medicare part A based on paying the Medicare 
payroll tax, must file a separate application to enroll in Medicare. 
Individuals who decide to collect Social Security benefits after they 
reach age 65, and thus did not get auto-enrolled in Medicare by virtue 
of receiving Social Security benefits, may use their application for 
Social Security benefits, as defined in 42 CFR 400.200, to apply for 
Medicare if they are eligible for Part A at that time. Individuals may 
also separately request enrollment in Part B by answering the Part B 
enrollment questions on an application for monthly Social Security 
retirement or spousal benefits. As an alternative, individuals may 
enroll in Part B by signing a simple statement of request, if they are 
eligible to enroll at that time.
    Currently, there are a total of seven enrollment forms for 
traditional Medicare--two enrollment forms for Part A and five 
enrollment forms for Part B, in Sec. Sec.  406.7 and 407.11, 
respectively. Medicare enrollment forms are available to individuals 
via mail from CMS or SSA, downloadable via the CMS \1\ and SSA \2\ 
websites, or in person at SSA field offices. CMS and SSA periodically 
review the enrollment forms to determine if updates are necessary to 
comply with statutory, regulatory, or operational changes. Our 
regulations currently identify each form by name and provide a brief 
description of its uses.
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    \1\ https://www.cms.gov/Medicare/CMS-Forms/CMS-Forms/CMS-Forms-List.
    \2\ https://www.ssa.gov/forms/.
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    We proposed to remove references to individual enrollment forms 
from our regulations, including their titles and brief descriptions, to 
provide greater administrative flexibility in updating, adding, or 
removing forms in the future. We also proposed to make technical edits 
to the text at Sec.  406.7 to state that an individual who files an 
application for monthly Social Security cash benefits as defined in 
Sec.  400.200 also applies for Medicare entitlement if he or she is 
eligible for hospital insurance at that time. Current regulations do 
not define Social Security cash benefits. We proposed to provide more 
clarity on when a Social Security application also applies for Medicare 
entitlement to Part A.

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

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

[[Page 66456]]

Columbia have buy-in agreements for Part B \3\ with the Secretary.
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    \3\ Thirty-seven States (including the District of Columbia) 
also have buy-in agreements for Part A.
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    States pay Medicare Part B premiums for approximately 10 million 
individuals and Part A premiums for approximately 700,000 individuals 
each year who are not entitled to Part A without a premium. For an 
individual who is eligible for but not yet enrolled in Medicare, State 
buy-in serves to both enroll the individual in Medicare and enable the 
Federal Government to bill the State for the new beneficiary's Medicare 
premiums. For an individual who is already enrolled in Medicare, State 
buy-ins enable the Federal Government to bill the State for the 
individual's Medicare premiums and stop collecting the premiums through 
deductions from the beneficiary's monthly Social Security (Old Age 
Insurance or Disability benefits or Supplemental Security Income), 
Railroad Retirement Board (RRB), or Office of Personnel Management 
(OPM) benefits, or through CMS direct billing.
    The impact of State buy-in is significant for many beneficiaries. 
Low-income individuals who receive assistance with Medicare premiums 
save critical funds to use for other necessities, including food and 
housing. Upon State buy-in, individuals who were paying the Medicare 
premiums through deductions from their Social Security benefits see a 
notable increase in their monthly social security checks (the standard 
Part B premium will be $164.90 per month in 2023), and individuals 
eligible but not enrolled in Medicare are able to enroll in the program 
and access Medicare services.
    We proposed several technical updates to the regulations pertaining 
to State buy-in that would better align them with federal statute, 
policy and operations that have evolved over time. We also proposed 
revising the regulations to provide that approved State plan provisions 
governing the buy-in process constitute a State's buy-in agreement and 
limiting retroactive Medicare Part B premium liability for States for 
full-benefit dually eligible beneficiaries.

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

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

1. Effective Dates of Entitlement
    While the majority of individuals are automatically enrolled in 
Medicare Parts A and B upon reaching age 65 or when they have been 
entitled to monthly Social Security or railroad retirement benefits 
based on disability for more than 24 months, certain individuals are 
required to take active steps to enroll. Specifically, individuals who 
are eligible for, but not receiving, monthly Social Security benefits 
under section 202 of the Act or qualified RRB benefits when they turn 
65, are not auto-enrolled because they have elected not to start 
receiving their Social Security or RRB benefits and have not filed an 
application for Social Security or RRB benefits and must take separate 
action to apply for Medicare. Certain individuals who are entitled to 
premium free Part A through government employment, but are not eligible 
for Social Security or RRB benefits also have to take action to apply 
for Medicare. Individuals may apply for Part A at any time, but can 
only apply for Part B during a specific enrollment period (IEP, GEP, or 
SEP). Further, under section 1818 of the Act, certain individuals who 
are not otherwise entitled to Part A but meet certain requirements, are 
eligible to enroll in Part A. These individuals are required to pay 
monthly premiums under section 1818(d) of the Act, and this benefit is 
frequently referred to as ``premium Part A.'' These individuals are 
required to take active steps to enroll in premium Part A and Part B.
     IEP: The period during which individuals eligible for 
premium Part A are entitled to receive benefits under Medicare, also 
known as the coverage period, can vary depending on when the individual 
enrolls. The first opportunity individuals have to enroll in Part B is 
during their IEP. Section 1837(d) of the Act defines the IEP for most 
individuals who become eligible for Medicare on or after March 1, 1966. 
For individuals age 65 and older enrolling in Part A, the IEP is the 7-
month period that begins 3 months before the month in which the 
individual is first eligible for Medicare and ends 3 months after the 
first month of eligibility.
     Deemed IEP: Section 1837(d) of the Act also defines what 
is commonly referred to as the ``deemed IEP.'' When an individual fails 
to enroll during their IEP because of a belief, based on documentary 
evidence, that he or she had not yet attained age 65, section 1837(d) 
of the Act requires the Secretary to establish an IEP for such 
individual based on the time shown in such documentary evidence of the 
individual attaining age 65. Such individuals are considered ``deemed'' 
to have enrolled for purposes of section 1838(a)(3) of the Act, and 
these individuals are subject to entitlement periods consistent with 
those for individuals not subject to a deemed initial enrollment period 
under 42 CFR 407.14.
     GEP: Eligible individuals who do not enroll in Part B 
during their IEP or deemed IEP, or who disenroll from Part B and wish 
to re-enroll, must generally do so during the GEP. The GEP is 
established under section 1837(e) of the Act, and is the period 
beginning on January 1 and ending on March 31 of each year.
    Section 1838(a) of the Act establishes the beginning of entitlement 
for Part B for individuals who enroll in their IEP or GEP. According to 
the current requirements established under sections 1838(a)(2)(A) and 
1838(a)(3)(A) of the Act individuals who become eligible to enroll in 
Medicare under section 1836(a) of the Act before January 1, 2023, and 
enroll:
     During the first 3 months of their IEP or deemed IEP, 
their entitlement would begin on the first day of the month they turn 
65.
     The month in which they become eligible, sections 
1838(a)(2)(B)(i) and 1838(a)(3)(B)(i) of the Act currently specify that 
their entitlement begins with the first day of the month following the 
month in which they enroll.
     The month in which they satisfy the requirements of 
section 1836(a) of the Act, their entitlement would begin with the 
first day of the second month after the month in which they enroll 
under sections 1838(a)(2)(B)(ii) and 1838(a)(3)(B)(i) of the Act.
     During the last 2 months of their IEP or deemed IEP, their 
entitlement under Medicare would be effective beginning with the first 
day of the third month after the month in which he or she enrolls 
according to sections 1838(a)(2)(B)(iii) and 1838(a)(3)(B)(i) of the 
Act.
     Under the GEP sections 1838(a)(2)(D)(i) and 
1838(a)(3)(B)(i) provide that their entitlement would begin with the 
first of July following their enrollment.
    Section 120(a)(1) of the CAA revised the entitlement periods for 
individuals who enroll in Medicare Part B in the last 3 months of their 
IEP, deemed IEP, or

[[Page 66457]]

during the GEP, beginning January 1, 2023. Specifically, the CAA 
modified section 1838 of the Act such that revised section 
1838(a)(2)(C) and (a)(3)(B)(ii) of the Act provide that for a Medicare 
eligible individual who satisfies the requirements of section 1836(a) 
of the Act (i.e., is entitled to Part A, or, is age 65, a resident of 
the United States, and is either (A) a citizen or (B) an alien lawfully 
admitted for permanent residence who has resided in the United States 
continuously during the 5 years immediately preceding the month in 
which he applies for enrollment), in a month beginning on or after 
January 1, 2023, and who enrolls in the month in which they satisfy 
those requirements, or in any subsequent month of their IEP, the 
individual's entitlement would begin with the first day of the month 
following the month of enrollment. The CAA also revised sections 
1838(a)(2)(D)(ii) and 1838(a)(3)(B)(ii) of the Act to provide that for 
individuals who enroll during the GEP in a month beginning on or after 
January 1, 2023, their entitlement would begin with the first day of 
the month following the month in which they enroll. An example of the 
current entitlement dates compared to the revisions made by the CAA is 
provided in the table:

------------------------------------------------------------------------
                                Prior to 1/1/23--   On or After 1/1/23--
       Enrolls in IEP:         Entitlement begins    Entitlement begins
                                       on:                   on:
------------------------------------------------------------------------
January.....................  April 1 (month        April 1 (month
                               eligibility           eligibility
                               requirements first    requirements first
                               met).                 met).
February....................  April 1.............  April 1.
March.......................  April 1.............  April 1.
April.......................  May 1 (month          May 1.
                               following month of
                               enrollment).
May.........................  July 1 (second month  June 1.
                               after month of
                               enrollment).
June........................  September 1 (third    July 1.
                               month after month
                               of enrollment).
July........................  October 1 (third      August 1.
                               month after month
                               of enrollment).
January.....................  July 1..............  February.
February....................  July 1..............  March.
March.......................  July 1..............  April.
------------------------------------------------------------------------

    As shown in the chart, the changes made to section 1838(a) of the 
Act according to section 120 of the CAA directly affect the 
requirements for individuals enrolling in Part B. However, these 
changes will also impact certain individuals enrolling in Part A. 
Section 1818(c) of the Act specifically requires in part that the 
provisions of section 1838 of the Act apply to individuals enrolling in 
premium Part A for purposes of determining the period of enrollment and 
other aspects of coverage. In light of this statute, the revised 
entitlement periods established in section 1838(a) of the Act will also 
apply to premium Part A enrollees.
    To implement the changes to 1838(a) of the Act, we proposed to 
revise language in both 42 CFR part 406 (for premium Part A) and 42 CFR 
part 407 (for Part B). Specifically, we proposed the following to 
reflect changes related to the start of entitlement for premium Part A 
IEP enrollments as summarized:
     Revised Sec.  406.22(a) would apply the existing 
requirements governing the entitlement period for individuals who are 
age 65 or older before January 1, 2023 who enroll in premium Part A 
during their IEP.
     New Sec.  406.22(b) would lay out the entitlement dates 
for individuals who attained age 65 on or after January 1, 2023, and 
who enroll during their IEP, including a deemed IEP.
     Newly redesignated and revised Sec.  406.22(c) would apply 
the existing entitlement date requirements for individuals under age 65 
who became eligible for Medicare prior to January 1, 2023.
     New Sec.  406.22(d) would set out the start dates for 
entitlement for individuals under age 65 who enroll in premium Part A 
on or after January 1, 2023.
    We also proposed the following to reflect changes related to the 
start of entitlement for individuals enrolling in Part B during their 
IEP:
     Revised Sec.  407.25(a)(1) applied the existing 
entitlement date requirements to individuals who first satisfy the Part 
B eligibility requirements before January 1, 2023 and enroll during 
their IEP or deemed IEP.
     Revised Sec.  407.25(a)(2) applied new entitlement dates 
requirements to individuals who first satisfy the Part B eligibility 
requirements on or after January 1, 2023.
    Section 120(a)(1)(A) of the CAA also modified section 1838(a)(2) of 
the Act, to address the beginning of the entitlement for individuals 
enrolling during their GEP according to 1837(e) of the Act. We proposed 
the following changes to reflect the updates in entitlement for 
individuals enrolling during the GEP:
     Revised Sec.  406.21(c)(3) reflected the revised 
entitlement periods for individuals who enroll or reenroll during a 
GEP.
     Revised Sec.  407.25(b)(1) specified that for individuals 
enrolling or reenrolling in Part B during a GEP before January 1, 2023, 
the current requirements governing the entitlement date would continue 
to apply.
     New Sec.  407.25(b)(3) specified that for individuals who 
enroll or reenroll in Part B during a GEP on or after January 1, 2023, 
entitlement would begin the first day of the month following the month 
of enrollment.
    We received a large number of comments related to our proposals for 
effective dates of entitlements. The comments on those proposals and 
our responses follow:
    Comment: All commenters on this proposal expressed support for the 
proposed changes to the effective dates. Many of the comments referred 
to the positive outcomes that will result from the proposal. The 
commenters expressed that the proposed changes to the effective dates 
will alleviate much of the confusion surrounding Medicare enrollment. 
Commenters also noted that the changes will ease the stress individuals 
face with regard to waiting months for their enrollment to start and 
allow them to receive coverage in a timelier manner. A few commenters 
noted that outreach and education materials, including translated 
materials, will need to be updated to reflect these changes.
    Response: We appreciate the overwhelming support for our proposal 
and thank those that took the time to give us feedback. We are in 
agreement with commenters that these changes will simplify the 
enrollment process and will result in a more efficient and positive 
experience for those seeking to enroll in Medicare. We will also take 
measures to update publications, training materials, and other outreach 
materials, as well as work with Medicare stakeholders, to update 
educational and outreach materials with the new changes. This includes 
that translation of materials into multiple different languages as 
needed.

[[Page 66458]]

    Comment: A commenter had a concern in regards to when the proposed 
changes would be implemented. Specifically, they stated that the 
Medicare Part A changes would be effective in 2023 and the Medicare 
Part B proposed changes would be effective in 2022, and they 
recommended that these proposals be implemented simultaneously.
    Response: We appreciate the feedback from the commenter and clarify 
that, as proposed, these changes for both Medicare Parts A and B are 
effective for enrollments on or after January 1, 2023. This timeframe 
is also articulated in Section 120 of the CAA.
    Comment: Another commenter expressed concern for individuals that 
may wish to delay their coverage to begin after retirement and provided 
an example of a teacher that becomes Medicare eligible in the fall but 
wishes to delay enrollment until retirement in May. The commenter 
requested an arrangement be made in this regulation to allow for 
individuals to delay enrollment until retirement.
    Response: When an individual is determining their plan for 
enrollment and considering when they want their Medicare coverage to 
become effective, they should keep in mind all enrollment opportunities 
available, such as the various enrollment periods and the group health 
plan (GHP) SEP (Sections 1837(i)(1) through (3)), which has different 
rules for when coverage becomes effective. The GHP SEP allows 
individuals to enroll at a later date as long as they were covered 
under insurance through their employer. Those wishing for their 
coverage to begin after retirement may be eligible and could consider 
this option.
    Comment: A few commenters expressed support for the proposed 
changes but provided feedback on areas that were not addressed in the 
proposed rule. A commenter believed that the 2-year waiting period to 
receive Medicare while receiving Social Security Disability Insurance 
(SSDI) benefits is too long and that SSDI beneficiaries seeking to 
enroll in Medicaid should not have to adhere to any income restrictions 
or waiting periods. Another commenter suggested that we include more 
detailed language related to beneficiary coverage through telehealth. 
Lastly, a commenter suggested that we update the SEP for Medicare 
Advantage Prescription Drug Plan or stand-alone Part D Prescription 
Drug Plan during the Part B GEP (located at Sec.  423.38(c)(16)) to 
align with the changes in the proposed rule.
    Response: We thank the commenters for their support of the proposed 
changes but note that these areas are outside of the scope of this 
rulemaking.
    We appreciate the feedback that we received on the entitlement date 
changes from commenters. Based on analysis of the public comments, we 
will be finalizing the proposals related to entitlement effective dates 
as proposed.
2. Special Enrollment Periods for Exceptional Conditions
    Under normal conditions, individuals who want to enroll in premium 
Part A, Part B, or both must submit a timely enrollment request during 
their IEP, the GEP, or an existing SEP for which they are eligible. 
Those who fail to enroll during their IEP may face an LEP \4\ and a 
potential gap in coverage. Prior to the enactment of the CAA, CMS did 
not have broad authority to create SEPs based on exceptional conditions 
for enrollees in Medicare Parts A and B.\5\ Section 120(a)(2)(A) of the 
CAA established section 1837(m) of the Act to provide the Secretary 
with authority to establish SEPs for individuals who satisfy the 
requirements in paragraph (1) or (2) of section 1836(a) of the Act, and 
meet such exceptional conditions as the Secretary may provide, 
beginning January 1, 2023. Section 120 of the CAA also created section 
1838(g) of the Act to provide the Secretary the discretion to determine 
the entitlement period for individuals who enroll pursuant to an SEP 
established according to section 1837(m) of the Act, in a manner that 
protects the continuity of health benefit coverage to the extent 
practicable. The CAA also modified section 1839(b) of the Act to exempt 
individuals who enroll pursuant to an SEP for exceptional conditions 
established under section 1838(m) of the Act, from paying an LEP. 
Section 1818(c) of the Act provides that individuals enrolling under 
premium Part A are generally afforded the same enrollment opportunities 
as those available under Part B, so our proposals would apply to both 
premium Part A and Part B, except where noted. Several SEPs currently 
exist that permit individuals to enroll in premium Part A or Part B 
outside of the IEP or GEP, including the following:
---------------------------------------------------------------------------

    \4\ An LEP is an amount added to the monthly premium that can be 
applied to individuals who do not sign up during their IEP. See 42 
CFR 406.32(a) and 408.22.
    \5\ CMS has separate authority for Medicare Parts C and D under 
sections 1851(e)(4)(d) and 1860D-1(b)(3)(C) of the Act, 
respectively.
---------------------------------------------------------------------------

     Sections 1837(i)(1) through (3) of the Act provide an SEP 
for certain individuals who are enrolled in a qualified group health 
plan (GHP) or large GHP (LGHP) at the time they first become eligible 
for Medicare and elect not to enroll (or to be deemed enrolled) in 
Medicare during their IEP.
     Section 1837(i)(4) of the Act establishes an SEP for 
certain individuals who, when first eligible for Medicare, were 
enrolled in a group health plan (GHP) or large group health plan (LGHP) 
by reason of their own (or a family member's) current or former 
employment, and whose coverage ended at a time when enrollment in the 
plan was not based on current employment.
     Section 1837(k) of the Act establishes an SEP for 
individuals serving as volunteers outside the United States at the time 
they first become eligible for Medicare, through a program covering at 
least a 12-month period, sponsored by a 501(c)(3) tax exempt 
organization, and who demonstrate health insurance coverage while 
serving in the program.
     Section 1837(l) of the Act establishes a 12-month SEP for 
certain individuals who are enrolled in TRICARE and become eligible to 
enroll in Part A on the basis of disability or ESRD status under 
sections 226(b) or 226A of the Act, respectively, but who elect not to 
enroll (or to be deemed enrolled) during their IEP.
    There is an appeal process, under SSA guidance, for individuals who 
are denied for one of the current SEPs. If an individual disagrees with 
an initial determination or decision, they may request further review 
under the administrative review process, also known as the appeal 
process. This process will also apply to the newly established SEPs. We 
proposed to establish five new exceptional conditions SEPs under 
section 1837(m) of the Act in Sec. Sec.  406.27 and 407.23 of the 
regulations for Medicare parts A and B, respectively. These five SEPs 
are for individuals impacted by an emergency or disaster, health plans 
or employers misrepresenting or providing incorrect information, the 
termination of Medicaid coverage, formally incarcerated, and other 
exceptional conditions. We proposed that these SEPs would be available 
to individuals who miss an IEP, GEP, or another SEP, such as the GHP 
SEP, due to a covered exceptional condition. (We note that in 
discussing these changes in the preamble of the proposed rule at 87 FR 
25092, 25126, and 25128 we erroneously referred to Sec.  407.22 instead 
of Sec.  407.23 and are now correcting that error.)
    In determining what new exceptional conditions SEPs would be 
beneficial to the Medicare program and its beneficiaries and that 
should be established in regulations, we

[[Page 66459]]

considered numerous factors including the following:
     Whether the conditions that caused the individual to miss 
an enrollment period are ``exceptional'' as required under the CAA, and 
whether the conditions are likely to be a one-time event.
     The SEP should not create an incentive for individuals to 
delay timely enrollment into Medicare.
     The SEP should not create an incentive for individuals to 
not educate themselves about the importance of enrolling in Medicare 
timely and make informed decisions during other available enrollment 
periods.
     Whether an SEP would be the most appropriate resolution to 
the exceptional conditions in question and whether other remedies such 
as individualized equitable relief under section 1837(h) of the Act, 
would more appropriately apply.
     The SEP should be expected to apply to a significant 
number or broad category of individuals, which would justify the 
establishment of a specific SEP in regulation instead of relying on the 
Secretary's authority under section 1837(h) of the Act to evaluate 
individual conditions and approve SEPs on a case-by-case basis.
    With these parameters in mind, we leveraged our previous program 
experience with Medicare enrollment in determining which SEPs to 
propose. We also considered the SEPs for exceptional conditions 
established under Medicare Parts C and D (section 1851(e)(4) of the 
Act), the Health Insurance Marketplace (29 U.S.C. 1163), and commercial 
health plans for insight into what SEPs are available in both public 
and private healthcare settings. Finally, we also considered whether 
the proposed new SEPs and the associated entitlement would protect 
access to continuous coverage for individuals eligible for Medicare 
Part A and Part B, such as through expediting individuals' entitlement 
date or by creating opportunities for individuals to enroll in coverage 
sooner.
    Based on these considerations, we proposed to establish five SEPs 
under Medicare Parts A and B based on the Secretary's authority in 
section 1837(m) of the Act. Four of the proposed SEPs address specific 
exceptional conditions. One SEP would permit CMS or SSA to evaluate 
individuals' particular conditions and grant SEPs on a case-by-case 
basis due to unanticipated conditions that may arise in the future.
    To accommodate these changes, we proposed to establish a new Sec.  
406.27, entitled ``Special enrollment periods for exceptional 
conditions'' to provide SEPs for individuals who missed enrolling in 
premium Part A during an enrollment period due to exceptional 
conditions. Similarly, we proposed to establish a new Sec.  407.23, 
also entitled ``Special enrollment periods for exceptional conditions'' 
to provide SEPs for individuals who missed enrolling in Part B during 
an enrollment period due to exceptional conditions. Both proposed 
Sec. Sec.  406.27(a) and 407.23(a) provided in part that the SEPs for 
exceptional conditions would be available beginning January 1, 2023. 
Specifically, the proposed SEPs for exceptional conditions would be 
applicable for exceptional conditions that took place on or after 
January 1, 2023 with the exception of the SEP to Coordinate with 
Termination of Medicaid Coverage discussed in section II.2.d. of this 
final rule.
a. Late Enrollment Penalties Associated With Special Enrollment Periods 
for Exceptional Conditions
    Section 120(a)(2)(C)(ii) of the CAA modified section 1839(b) of the 
Act and provides that individuals who enroll during an SEP established 
under the Secretary's authority under new section 1837(m) of the Act 
are not subject to the LEP. Specifically, section 1839(b) of the Act, 
as amended, provides that an individual who enrolls in Medicare ``after 
his initial enrollment period [. . .] and not pursuant to a special 
enrollment period under subsection (i)(4), (l), or (m) of section 1837 
[. . .] shall be increased by 10 percent of the monthly premium so 
determined for each full 12 months (in the same continuous period of 
eligibility) in which he could have been but was not enrolled.'' 
Therefore, we proposed the following:
     For enrollments on or after January 1, 2023 under one of 
the SEPs established pursuant to the Secretary's authority in section 
1837(m) of the Act and established in Sec.  406.27 (Special enrollment 
periods for exceptional conditions), we proposed at Sec.  406.33(c)(2) 
that any months of non-coverage would be excluded from the calculation 
of the LEP.
     For enrollments on or after January 1, 2023 under one of 
the SEPs established pursuant to the Secretary's authority in section 
1837(m) of the Act and established in Sec.  407.23 (Special enrollment 
periods for exceptional conditions), we proposed at Sec.  408.24(b)(2) 
that any months of non-coverage would be excluded from the calculation 
of the LEP.
     For individuals who reenroll prior to January 1, 2023, we 
proposed at Sec. Sec.  406.34(a) and 408.24(c) that requirements 
currently in place for determining the months taken into account for 
purposes of calculating the LEP would continue to apply.
     For reenrollments on or after January 1, 2023, pursuant to 
one of the SEPs for exceptional conditions established under the 
Secretary's authority in section 1837(m) of the Act and promulgated in 
Sec. Sec.  406.27 or 407.23, respectively, we proposed at Sec. Sec.  
406.34(e) and 408.24(d)(2)(ii) that any months of non-coverage would be 
excluded from the calculation of the LEP. We clarified in the proposed 
rule that if the individual fails to enroll or reenroll during the 
available exceptional condition SEP, any months of non-coverage, 
including the months during the exceptional condition SEP, would be 
taken into consideration for calculating the LEP in accordance with 
Sec. Sec.  406.33, 406.34, and 408.22.
    We received a large number of comments related our proposed SEPs. 
The discussion pertains to comments related to our overall SEP 
authority and provides our responses to those comments.
    Comment: Commenters supported the five proposed SEPs, including 
CMS's proposal to exclude months of non-coverage from the calculation 
of the LEP, and several commenters applauded our efforts to expand 
access to Medicare coverage with this new rule. Many cited that these 
new SEPs would add to the agency's commitment to health equity by 
helping to reduce disparities. A commenter stated that ``these 
provisions may also help maintain the financial viability of the 
emergency care safety net.'' Similarly, others agreed with our 
reasoning for these proposed SEPs, stating that they would address 
several of the barriers to timely Medicare enrollment and reduce 
coverage gaps and access to healthcare, including mental health 
services.
    Response: We thank all commenters for their support on the five 
proposed SEPs. Many of the inferences trumpeted by the commenters align 
with our reasoning for proposing these provisions. We remain committed 
to advancing health equity for all by improving access and eliminating 
barriers, to Medicare.
    Comment: A commenter strongly encouraged CMS and SSA to use 
existing data resources to automatically apply these SEPs for 
individuals who are able to provide basic documentation with their 
enrollment materials. They added that CMS and SSA should include 
information about how the process will be streamlined with notification 
of the SEP. Furthermore, this commenter urged CMS to consider

[[Page 66460]]

alternative communication methods, in addition to mail, to ensure 
individuals are aware of the SEPs.
    Response: We appreciate the suggestion to ease processes for 
beneficiaries, but we are unable to automatically apply these SEPs for 
individuals who wish to enroll in Medicare. Use of the proposed SEPs 
requires that an individual misses their enrollment period due to a 
qualifying event. For us to know that information, the individual must 
initiate contact with SSA, which will allow SSA to verify their 
validity for an exceptional condition SEP. For these reasons, we 
decline to adopt the commenter's recommendation to automatically apply 
this SEP to eligible individuals at this time, but we may consider 
options to work closely with stakeholders to streamline processes in 
future rulemaking. In regard to alternative methods of communication, 
we appreciate the suggestion, and CMS is committed to updating our 
websites and working with stakeholders to ensure adequate awareness of 
the availability of these new SEPs as appropriate.
    Comment: A commenter was concerned that the proposed SEPs were 
limited to a narrow group of individuals who were specifically enrolled 
in a group health plan when they first became eligible to enroll in 
Medicare.
    Response: To clarify, the proposed exceptional condition SEPs are 
available to any individual who qualifies and are not specific to those 
enrolled in a group health plan when first eligible for Medicare.
b. SEP for Individuals Impacted by an Emergency or Disaster
    We proposed an SEP for individuals impacted by a government-
declared emergency or disaster under the Secretary's authority to 
establish SEPs beginning January 1, 2023, under section 1837(m) of the 
Act. Establishing such an SEP would permit the agency to provide 
immediate relief to individuals impacted by certain government-declared 
emergencies and disasters without being subject to the requirements 
applicable under our existing equitable relief authority.\6\ These SEPs 
would apply for individuals enrolling in premium Part A or Part B and 
would eliminate potential gaps in coverage and otherwise applicable 
LEPs resulting from eligible individuals' inability to submit a timely 
enrollment request as a result of emergency or disaster.
---------------------------------------------------------------------------

    \6\ Equitable relief (section 1837(h) of the Act) is the tool by 
which we correct or eliminate inequity to the individual when their 
Medicare enrollment rights are prejudiced because of the error, 
misrepresentation, or inaction of the federal government.
---------------------------------------------------------------------------

    The proposed parameters of this SEP were as follows:
     At new Sec. Sec.  406.27(b) and 407.23(b), we proposed to 
create an SEP for individuals prevented from submitting a timely 
Medicare enrollment request by an emergency or disaster declared by 
either a Federal, State, or local government.
     At new Sec. Sec.  406.27(b)(1) and 407.23(b)(1), we 
proposed that the SEP would be available to those who were not able to 
enroll in premium Part A or Part B or both if they reside (or resided) 
in an area for which a Federal, State or local government entity newly 
declared a disaster or other emergency. The individual must demonstrate 
that they reside (or resided) in the area during the period covered by 
that declaration.
     At Sec. Sec.  406.27(b)(2) and 407.23(b)(2), we proposed 
that the SEP would begin on the date an emergency or disaster is 
declared, or if different, the start date identified in the 
declaration, whichever is earlier, so long as the date is on or after 
January 1, 2023. The SEP ends 2 months after the declaration has been 
determined to have ended or revoked. If the declaration is extended, 
the SEP ends 2 months after the end date of any extensions. We 
specifically requested comments regarding whether we should limit the 
time frame of the SEP based on the type of emergency, or specify that 
the type of emergency must explicitly restrict an individual's ability 
to enroll.
     We proposed in Sec. Sec.  406.27(b)(3) and 407.23(b)(3), 
according to the Secretary's authority under section 1838(g) of the Act 
to specify the coverage period for individuals enrolling during SEPs 
established under section 1837(m) of the Act, that the coverage period 
for individuals who enroll under this SEP would begin the first day of 
the month following the month of enrollment, so long as the date is on 
or after January 1, 2023.
    We received the following comments on the SEP for Individuals 
Impacted by an Emergency or Disaster:
    Comment: Commenters expressed strong and broad support for the 
establishment of this SEP. Commenters agree that this SEP would help 
mitigate disparities related to the access of healthcare for Medicare 
beneficiaries residing in areas impacted by disasters or emergencies. A 
few commenters suggested that the proposed duration of the SEP may not 
be enough time for individuals to recover from a disaster or emergency 
declaration has ended and one recommended the SEP extend a full year 
after the declaration has ended.
    Response: We appreciate the overwhelming support for this proposed 
SEP and thank those that gave us feedback. The vast majority of 
commenters expressed support for the SEP's duration, as proposed. 
However, we did receive comments suggesting that we extend the duration 
of the SEP beyond 2 months after the end of the emergency or disaster 
declaration. Upon review, we have decided to extend the SEP duration in 
order to provide greater flexibility for potential Medicare 
beneficiaries. Individuals will have the full duration of the emergency 
plus an additional 6 months to contact SSA to enroll in Medicare under 
this SEP. As such, we are revising Sec. Sec.  406.27(b)(2) and 
407.23(b)(2) to specify that the SEP begins on the earlier of the date 
an emergency or disaster is declared or, if different, the start date 
identified in such declaration and the SEP ends 6 months after the 
declaration has been determined to have ended or revoked. If the 
declaration is extended, the SEP ends 6 months after the end date of 
any extensions.
    Comment: A few commenters requested that CMS consider making the 
SEP applicable in situations where the individual may not live in an 
area impacted by a Federal, State or local government-declared disaster 
or emergency, but the person who makes healthcare decisions on behalf 
of that individual does, noting that it was consistent to what was 
allowed in Part C and Part D. Additionally, a commenter recommended 
that we ensure that moving forward the requirements related to this SEP 
remain equal across Medicare Parts A, B, C and D.
    Response: We thank commenters for this insight. Currently, in 
regard to the Medicare Part C and D emergency or disaster SEP, if a 
person who assists in making health care decisions on behalf of a 
Medicare enrollee is impacted by a government-declared emergency or 
disaster, then the SEP would be available to the enrollee. We would 
note that Medicare enrollees in Parts C and D have the option to make 
enrollment decisions on what plans best suit their financial and health 
care needs on an annual basis, and they often rely on friends and 
family members with these decisions. In contrast, enrolling in Parts A 
and B is normally a one-time decision that does not include the same 
level of complexity as Parts C and D enrollments. However, we do 
believe allowing some flexibility to individuals who require assistance 
in Medicare Parts A and B is important. As such, we will be revising 
Sec. Sec.  406.27(b)(1) and 407.23(b)(1) to specify that the SEP is

[[Page 66461]]

also available if the individual did not live in an area impacted by a 
Federal, State or local government-declared disaster or emergency, but 
the individual's authorized representative (as defined at 42 CFR 
405.910), their legal guardian, or the person who makes healthcare 
decisions on behalf of that individual, did live in such an impacted 
area.
    Comment: A commenter requested that we remove the requirement for 
the individual to submit proof of SSA office closings or mail 
disruptions, or provide proof that the emergency or disaster directly 
affected their ability to enroll in Medicare.
    Response: We appreciate the feedback but would like to clarify that 
impacted beneficiaries are not required to provide proof of SSA office 
closings or disruptions in mail service due to a disaster or emergency 
for this SEP. The individual must have missed an enrollment period in 
order to qualify for this SEP; however, the individual does not have to 
provide documented proof that the disaster or emergency impacted their 
ability to enroll as SSA will already have this information. 
Individuals or their authorized representative need only to demonstrate 
that they reside (or resided) in the area during the period covered by 
a disaster or emergency declaration.
    Comment: We solicited comments on whether we should limit the SEP 
timeframe based on the type of emergency or the explicit impact on the 
individual's ability to enroll. The majority of commenters believe such 
restriction would be harmful to individuals and administratively 
burdensome to the Social Security Administration, which is tasked with 
making enrollment determinations. Commenters believe it is extremely 
unlikely that anyone would intentionally delay Medicare enrollment in 
hopes of a tragedy. There also may be disasters or emergencies that do 
not impact an individual's ability to enroll in Medicare.
    Response: We agree with commenters and appreciate their feedback. 
The purpose of this SEP is to provide an enrollment opportunity for 
individual's impacted by an exceptional condition that may have impeded 
their ability to enroll during another valid enrollment period and as 
such we will not make any changes to the SEP timeframe based on the 
type of disaster or emergency.
    We appreciate the support and feedback received from commenters. As 
discussed, we will be finalizing this SEP as proposed with the 
following modifications. We will be revising Sec. Sec.  406.27(b)(1) 
and 407.23(b)(1) to specify that the SEP is also available if the 
individual did not live in an area impacted by a Federal, State or 
local government-declared disaster or emergency, but the individual's 
authorized representative (as defined at 42 CFR 405.910), legal 
guardian (as outlined by SSA), or person who makes healthcare decisions 
on behalf of the individuals, did live in such an impacted area. In 
addition, we will be revising Sec. Sec.  406.27(b)(2) and 407.23(b)(2) 
to extend the duration of the SEP from 2 months to 6 months after the 
end of the emergency or disaster declaration.
c. SEP for Health Plan or Employer Misrepresentation or Providing 
Incorrect Information
    In order to provide relief to individuals who missed an enrollment 
period because of misrepresentation by or incorrect information from 
their employer or GHP, we proposed to create a new SEP at Sec.  
406.27(c) and at Sec.  407.23(c) based on exceptional conditions. We 
proposed that this SEP would apply for individuals whose non-enrollment 
in premium Part A or Part B is unintentional, inadvertent, or erroneous 
and results from material misrepresentation or reliance on incorrect 
information provided by the individual's employer or GHP, or any person 
authorized to act on behalf of the employer or GHP.
    The proposed parameters of this SEP were as follows:
     At Sec. Sec.  406.27(c)(1) and 407.23(c)(1) we proposed 
that an individual is eligible for such an SEP if they can demonstrate 
that he or she did not enroll in premium Part A or Part B during an 
enrollment period in which they were eligible based on information 
received from an employer or GHP, or any person authorized to act on 
such organization's behalf, and an employer, GHP or their 
representative materially misrepresented information or provided 
incorrect information relating to enrollment in premium Part A or Part 
B, so long as the misrepresentation or error occurred on or after 
January 1, 2023. We stated that to demonstrate material 
misrepresentation, an individual would be required to provide 
documentation of the relevant misrepresentation to SSA and that it must 
show that the information was provided on or after January 1, 2023, was 
directly from an employer, GHP or their representative prior to an 
enrollment period, and that the inaccuracy caused the individual not to 
enroll timely.
     At Sec.  406.27(c)(2) and Sec.  407.23(c)(2) we proposed 
that this SEP would begin the day the individual notifies SSA of the 
employer or GHP misrepresentation or incorrect information provided, so 
long as the misrepresentation or error occurred on or after January 1, 
2023, and would end 2 months later.
     At Sec. Sec.  406.27(c)(3) and 407.23(c)(3), we propose 
that the coverage period would begin the first day of the month 
following enrollment.
    We received the following comments on the SEP for Health Plan or 
Employer Misrepresentation or Providing Incorrect Information:
    Comment: Commenters expressed general support for this SEP. 
Commenters indicated that this SEP will help to cure what they perceive 
to be one of the most widespread and common enrollment pitfalls facing 
beneficiaries and will potentially eliminate gaps in coverage. Multiple 
commenters, while supporting the SEP, recommended that we lower the 
evidence requirement for the SEP due to erroneous information that may 
have been provided orally or in another form in which the beneficiary 
may not be able to provide tangible evidence.
    Response: We acknowledge that employers and GHPs do not always 
communicate information in writing; therefore, it is reasonable to 
assume that individuals may not have tangible documentation to provide 
to SSA proving that they were misinformed by their employer or GHP. Not 
allowing an alternative type of documentation, other than written, 
would disadvantage beneficiaries who were misinformed through other 
communication methods. Upon review, we have decided to accept written 
attestation from the beneficiary when documented evidence from the 
employer or GHP is not available. We thank the commenters for their 
overall support, and agree with their assessment of the evidence 
requirement. We are modifying the regulations at Sec. Sec.  406.27(c) 
and 407.23(c) to expressly permit the use of either documentation of 
misrepresentation or written attestation.
    Comment: Many commenters, while supporting the SEP, recommended 
that we include non-employer insurance sources, such as insurance 
agents and individual policy sellers, as well as non-federal government 
entities and agents, including Medicaid, the Marketplace, and State 
Departments of Insurance or similar as trusted sources of information. 
Commenters also recommended to expand the definition of misinformation 
to include employer or health plan omission of information.
    Response: Upon review, we agree that other non-employer insurance 
sources could be considered trusted sources of information. Agents and 
brokers of health plans could be considered as

[[Page 66462]]

extensions of an individual's health plan and play a critical role in 
informing individuals of their enrollment options. We have modified the 
language in the regulation text accordingly.
    We are not adopting the suggested inclusion of non-federal 
government entities and agents, including Medicaid, the Marketplace, 
and State Departments of Insurance as trusted sources of information 
because this would substantially change the scope of this SEP. The 
purpose of this SEP is to provide relief to employees who have been 
misinformed by employers, GHPs, or agents or brokers of health plans. 
If another entity has misinformed the beneficiary, the individual may 
apply for relief under the SEP for Other Exceptional Conditions. 
Accordingly, we are revising Sec. Sec.  406.27(c)(1)(i) and 
407.23(c)(1)(i) to include brokers or agents of health plans as 
entities from whom the beneficiary may have received misinformation.
    Comment: Multiple commenters recommended that CMS expand the 
definition of misinformation to include employer or health plan 
omission of relevant information. For example, a commenter stated that 
an employer or health plan failing to convey pertinent information 
could impact an individual's decision making and cause them to miss 
their Medicare enrollment period.
    Response: While we understand that individuals need complete 
information about their options and responsibilities, the onus does not 
fall on the employer, GHP, or agents and brokers of health plans to 
provide any information that the individual requests. Information 
provided by these entities is often voluntary, as they are not legally 
obligated under the Medicare statute to provide any information to 
individuals related to Medicare enrollment. As such, we will not be 
revising this final rule to provide that omission of information can 
give support an SEP.
    Comment: Several commenters discussed beneficiaries' confusion with 
the interaction of COBRA coverage and Medicare, including that COBRA is 
not creditable coverage in the same way employer-group coverage is for 
Medicare and that COBRA cannot pay primary coverage once a person 
becomes eligible for Medicare. A few commenters recommended that 
enrollment in COBRA or retiree coverage alone should be used as 
evidence of misinformation, and therefore an individual in this 
circumstance should be considered eligible for the SEP.
    Response: While we understand that COBRA interaction with Medicare 
may be confusing, we are unable to make the assumption that enrollment 
in COBRA was caused by misinformation provided by an employer or group 
health plan. We cannot assume that the beneficiary did not deliberately 
choose to enroll in COBRA. As such, we do not consider this an 
exceptional condition and will not consider enrolling in COBRA alone as 
a basis for this SEP. If a beneficiary was erroneously instructed by an 
employer, group health plan, or agent and/or broker of the health plan 
to enroll in COBRA, they may provide the documented evidence or written 
attestation of the misinformation in order to qualify for the SEP. In 
addition, if there was another exceptional circumstance surrounding 
their enrollment in COBRA, they can apply for the SEP for other 
exceptional conditions.
    Comment: A commenter suggested that we increase the SEP duration 
from 2 months to 6 months to allow the beneficiary time to gather 
evidence of the misinformation.
    Response: We proposed that the SEP would end 2 months after the 
individual notified SSA of the misrepresentation and we believed this 
would be ample time since, in most cases, we assumed that the 
individual would enroll at the same time they identified the issue to 
SSA. However, upon review, we have decided to extend the SEP duration 
from 2 months to 6 months in order to provide greater flexibility for 
potential Medicare beneficiaries. In addition, we are modifying this 
SEP to allow for the acceptance of written attestation, which will 
allow an individual to provide evidence of misinformation even if they 
do not have or cannot find written evidence from their employer or 
health plan, it should not take longer than 6 months to satisfy the 
requirements of this SEP.
    We appreciate the support and feedback received from commenters. As 
discussed, we will be finalizing this SEP as proposed with the 
following modifications:
     We are modifying Sec. Sec.  406.27(c)(1) and 407.23(c)(1) 
to expressly permit the use of either documentation of 
misrepresentation or written attestation for this SEP.
     We are revising Sec. Sec.  406.27(c)(1)(i) and 
407.23(c)(1)(i) to include brokers or agents of health plans as 
entities that may have been a source of misinformation.
     We are revising Sec. Sec.  406.27(c)(2) and 407.23(c)(2) 
to increase the SEP duration from 2 months to 6 months.
d. SEP for Formerly Incarcerated Individuals
    Section 1862(a)(2) and (3) of the Act generally prohibits Medicare 
payment for otherwise covered services when the individual who is 
furnished the services is not obligated to pay for them (and no other 
person has a legal obligation to pay for them) and covered services 
that are paid for directly or indirectly by a governmental entity 
(other than under a health program under the Social Security Act). In 
implementing these provisions, CMS adopted a regulation that prohibits 
payment for otherwise covered services that are furnished while the 
recipient is in custody of penal authorities, as such individuals are 
provided healthcare through their penal institution. As a result, 
individuals who are enrolled in Medicare but who are in custody of 
penal authorities as described in 42 CFR 411.4(b) (here, 
``incarcerated'' for brevity) are subject to a payment exclusion in 
Medicare so Medicare does not pay for items and services that might 
otherwise be paid under Parts A and B. Further, section 202(x)(1)(A) of 
the Act prohibits the payment of Old-age, Survivors, and Disability 
Insurance (OASDI) benefits to individuals who meet one of several 
criteria that relate to being incarcerated.\7\ Therefore, if an 
individual turns 65 and qualifies for Medicare but is not yet receiving 
OASDI benefits because of section 202(x)(1) of the Act, that individual 
is not automatically enrolled in Medicare Part A. Further, an 
individual may elect not to enroll in Medicare while incarcerated to 
avoid having to pay out of pocket premiums only for Medicare to deny 
payment for services. Moreover, current law does not provide any 
special enrollment opportunities for formerly incarcerated individuals 
who miss a Medicare enrollment period while incarcerated. If these 
individuals do not enroll into Medicare because they are incarcerated, 
they may go months without health coverage upon their release.
---------------------------------------------------------------------------

    \7\ Section 202(x)(1)(A) lists several conditions of being 
confined in a jail, prison, other penal institution or correctional 
facility, or in an institution at public expense for certain reasons 
specified in the statute, or in a specific status with regard to 
criminal prosecution. Here, we use the term ``incarceration'' for 
brevity.
---------------------------------------------------------------------------

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

[[Page 66463]]

allow those formerly incarcerated individuals to avoid potential gaps 
in coverage and late enrollment penalties.
    The proposed parameters of this SEP were as follows:
     At Sec. Sec.  406.27(d)(1) and 407.23(d)(1), we proposed 
that an individual would be eligible for this SEP if they demonstrate 
that they are eligible for Medicare and failed to enroll or reenroll in 
Medicare premium Part A or Part B during another enrollment period in 
which they were eligible to enroll while they were incarcerated. 
Further, there must be a record of release either through discharge 
documents or data available to SSA.
     At Sec. Sec.  406.27(d)(2) and 407.23(d)(2), we proposed 
that this SEP would start the day of the individual's release from 
incarceration and end the last day of the 6th month after the month in 
which the individual is released from incarceration.
     At new Sec. Sec.  406.27(d)(3) and 407.23(d)(3), we 
proposed that entitlement would begin the first day of the month after 
the month of enrollment, so long as it is after January 1, 2023.
    We received the following comments on the SEP for Formerly 
Incarcerated Individuals:
    Comment: Commenters including advocacy groups, individuals, and 
State penal institutions provided broad support for this SEP. These 
commenters indicated that it could help this population as increasing 
health services and coverage during reentry have been associated with 
lower rates of recidivism and improved outcomes around employment, 
housing, and family support. Multiple commenters, while supporting the 
SEP, recommended that the duration be extended from 6 months as 
navigating reentry can be timely and daunting for this population, many 
of whom may have physical or cognitive impairments and/or low literacy 
and health literacy. Commenters also cited the heightened risk of 
competing priorities such as economic and housing insecurity during the 
period following release from incarceration as the need for an 
increased SEP duration. Most commenters recommended extending the SEP 
to 12 months, and a commenter recommended that the SEP last for 2 
years.
    Response: We appreciate the support for this SEP and understand and 
agree with the commenters' belief that this population faces many 
challenges in establishing stable conditions and reintegrating 
themselves into society. Upon review, and based on the issues raised by 
the commenters, we are extending the SEP duration to 12 months. We 
believe encouraging individuals to reestablish healthcare coverage 
through Medicare is a vital part of successfully re-entering and 
reintegrating into the community after incarceration and that a 12-
month timeframe provides sufficient time for a released individual to 
have OASDI benefits reinstated. Reinstating OASDI benefits is 
important, especially to this population, as they can then enroll or 
reenroll in Medicare and not have to pay out of pocket for Medicare 
premiums, but rather have their premiums deducted from their Social 
Security benefits. Not all formerly incarcerated individuals will delay 
enrollment or reenrollment into Medicare until after they have 
reinstated their OASDI benefits. However, for those who do, allowing 12 
months to enroll or reenroll in Medicare after release from 
incarceration allows ample time for formerly incarcerated individuals 
to first have their OASDI benefits reinstated. CMS will conduct 
education and outreach efforts to inform stakeholders on this SEP and 
the importance of prioritizing enrollment into Medicare for this 
population.
    Accordingly, we are revising the duration of this SEP at Sec. Sec.  
406.27(d)(2) and 407.23(d)(2) to reflect an SEP that starts the day of 
release from incarceration and concludes at the end of the 12th 
subsequent month. For example, if an incarcerated individual was 
released on January 14, 2023, their SEP would begin on January 14, 2023 
and end on January 31, 2024.
    Comment: Multiple comments recommended allowing for pre-release 
enrollment under this SEP in order to prevent against potential gaps in 
coverage for this population upon release from incarceration. 
Commenters calling for pre-release enrollment also cited the need for 
these individuals to receive assistance from the State or incarcerating 
entity in their enrollment.
    Response: We appreciate the feedback from commenters and understand 
the importance, especially for this vulnerable population, to lessen 
any risk of gaps of coverage. Further, we understand many individuals 
of this population may have economic factors that prevent them from 
enrolling in Medicare prior to their OASDI benefits being reinstated, 
thus requiring them to pay out of pocket for Medicare premiums. With 
these considerations in mind, we considered different options to best 
reduce any gaps of coverage that an individual may face upon release 
from incarceration and that included either revising the duration of 
the SEP or revising the entitlement start date. We believe this issue 
can best be addressed by finalizing our proposal with modifications to 
allow eligible individuals to choose between 2 effective dates of 
coverage:
     Option 1: Individuals enrolling in this SEP will have a 
prospective entitlement to begin the first day of the month following 
the month of enrollment.
     Option 2: Individuals enrolling in this SEP can opt for a 
retroactive entitlement date so long as their enrollment is on or after 
January 1, 2023. If the application is filed within the first 6 months 
of the SEP, the effective date is retroactive to the date of their 
release from incarceration. If the application is filed in the last 6 
months of the SEP, the coverage effective date is retroactive to 6 
months after the date of release from incarceration. In addition, 
beneficiaries who opt for retroactive coverage must pay the premiums 
for that coverage and we note that installment billing plans are 
available for beneficiaries who cannot pay the lump sum of retroactive 
premiums. Beneficiaries would contact their local Social Security field 
office for help paying any retroactive premium arrearages.
    We understand that this population of beneficiaries may face job 
insecurity and socio-economic barriers while reintegrating into their 
communities. If an individual opts for retroactive coverage, they would 
have to pay monthly premiums for those retroactive months of coverage. 
Some individuals may wish to delay Medicare enrollment until they have 
had their OASDI benefits reinstated, ensuring they are not paying out 
of pocket for Medicare premiums. Still others may be willing to pay out 
of pocket for coverage retroactive to their release date, not to exceed 
6 months, and before their OASDI benefits are reinstated. Providing 
individuals this option allows them the ability to make the healthcare 
decisions that are best suited to their needs. To implement this 
change, we are revising the entitlement date of this SEP at Sec. Sec.  
406.27(d)(3) and Sec.  407.23(d)(3) to provide that entitlement begins 
the first day of the month following the month of enrollment, so long 
as the date is on or after January 1, 2023 or, as we specify in 
Sec. Sec.  416.27(d)(3)(ii) and Sec.  407.23(d)(3)(ii), individuals 
have the option of choosing an entitlement date retroactive to the 
first day of the month of their release from incarceration, not to 
exceed 6 months. Individuals would have to pay premiums for the 
retroactive period of coverage.
    Comment: Multiple commenters suggested that CMS revise the

[[Page 66464]]

description of when someone is ``in custody of penal authorities'' 
under Sec.  411.4(b). Commenters identified that the current definition 
includes a broad range of individuals--including those who are under 
arrest (pre-conviction), on medical furlough, required to live under 
home detention, or are on parole, probation, or supervised release. 
Further, the commenters noted that the regulation at Sec.  411.4 does 
not absolutely preclude Medicare payment for these individuals; rather, 
it establishes the presumption that another payer is responsible, and 
provides that payment may be made for services furnished to individuals 
or groups of individuals who are in the custody of police or other 
penal authorities provided that certain conditions are met. However, 
commenters state the regulation assumes that penal authorities have 
responsibility to cover, and will cover, medical expenses during all 
these circumstances, an assumption that is inconsistent with actual 
coverage by corrections authorities.
    Commenters expressed concern that the existing regulation could 
leave some individuals who are ``in custody of penal authorities'' as 
that phrase is used in Sec.  411.4(b) without coverage from both the 
penal institution and Medicare. Commenters described their 
understanding that Medicaid coverage is permitted for individuals who 
are ``on parole, probation, or released to the community pending trial; 
living in a halfway house where individuals can exercise personal 
freedom; voluntarily living in a public institution; or on home 
confinement.''
    Response: We thank the commenters for their concerns and 
suggestions. However, changes to Sec.  411.4, such as to limit who is 
``in custody'' for purposes of the Medicare payment exclusion or to 
amend the exception that permits Medicare payment under certain 
conditions, are not within the scope of this rulemaking. Further, we 
are not addressing here the rules and definitions used in other 
programs, such as Medicaid or the Marketplace, for individuals who are 
incarcerated or in custody.
    We believe that it is important that the scope of the SEP we 
proposed and are finalizing is aligned with who Sec.  411.4(b) 
specifies are individuals in custody of penal authorities for purposes 
of the Medicare payment exclusion. However, we appreciate the 
commenters' considerations and will continue to consider the issues 
they have raised. As finalized in this rule, Sec. Sec.  406.27(d) and 
407.23(d) use the term ``in custody of penal authorities'' and cite 
Sec.  411.4(b) for its description of who is in custody of penal 
authorities to ensure this alignment is clear. As stated in the first 
paragraph for this section of this final rule, we are using the term 
``incarcerated'' in the preamble to describe the individuals who are in 
custody of penal authorities as described in Sec.  411.4(b). Further, 
if CMS amends Sec.  411.4(b) in the future to limit the description of 
who is in custody of penal authorities for purpose of the Medicare 
payment exclusion, this SEP will be automatically aligned to that 
change.
    Comment: Multiple commenters requested that CMS remove the overdue 
part B premiums (caused by the 90-day grace period) for incarcerated 
individuals. Currently, Medicare beneficiaries in a direct-bill 
agreement (for those who do not have Medicare premiums deducted from 
their OASDI benefits, a direct-bill agreement is an automatic deduction 
of Medicare premiums from a checking or savings account each month) are 
given 90 days to repay any past due premiums before their Medicare 
enrollment is terminated. After 90 days, Part B enrollment is normally 
terminated for non-payment of premiums (42 CFR 408.8(c)). Commenters 
noted this 90-day grace period places an unnecessary and unforeseen 
financial burden on people who are incarcerated but have not paid prior 
premiums and creates an additional barrier to reenrollment. The 
commenters explained this is because most enrolled beneficiaries have 
Medicare premium payments automatically deducted from a monthly SSA 
benefit. However, when the enrolled beneficiaries become incarcerated, 
they are switched to direct payment as their SSA benefits are suspended 
upon incarceration. If the individual later re-enrolls in Part B after 
release from incarceration, and upon restoring SSA benefits, SSA 
deducts premium payments owed under the earlier grace period from the 
first SSA benefit payment. Commenters noted this deduction can cause 
significant hardship upon reentry.
    Response: We thank commenters for their concerns and suggestions. 
However, this suggestion is outside the scope of this rulemaking. The 
Medicare premium grace period is designed to help Medicare 
beneficiaries who are enrolled in direct pay keep coverage during 
temporary periods of hardship, or common mishaps that may result in a 
beneficiary missing a premium payment. Further, incarcerated 
individuals do have the ability to voluntarily terminate their Medicare 
coverage upon incarceration to avoid any potential past-due payment 
issues, which they would do by contacting SSA. Finally, installment 
billing plans are available through SSA for those who might have 
trouble repaying back due premiums.
    Comment: A commenter requested that CMS use its discretionary 
authority to revise previous rules and waive all historic LEPs that 
were paid in the past or are being paid now by previously incarcerated 
individuals.
    Response: By referring to ``historic LEPs,'' we believe the 
commenter is referring to LEPs that were assessed--and were paid in the 
past and/or are currently being paid for current Medicare coverage--in 
connection with coverage periods for individuals who enrolled (or 
reenrolled) in Part B after ending a period of incarceration before 
January 1, 2023. This suggestion is outside the scope of this 
rulemaking, and CMS does not have the authority to unilaterally waive 
LEPs that were paid in the past or are currently part of an 
individual's Medicare premium(s) as the LEPs are governed by statute. 
The Part A LEP is found in the statute at 1818(c)(6) of the Act, and 
the Part B LEP at 1839(b) of the Act. Section 120(a)(2)(C)(ii) of the 
CAA modified section 1839(b) of the Act to provide that individuals who 
enroll during an SEP established under the Secretary's authority under 
new section 1837(m) of the Act are not subject to the LEP, but it did 
not provide for a waiver of all historic LEPs for individuals who 
previously enrolled in Medicare under a condition that now would be 
considered an exceptional condition or for individuals who may qualify 
for but do not use an SEP that is established under section 1837(m) of 
the Act. Therefore, we are unable to waive historic LEPs for 
individuals who enrolled prior to January 1, 2023, even if that prior 
enrollment had been under circumstances that will be part of the new 
SEPs being adopted under section 1837(m) of the Act. Beginning January 
1, 2023, an individual who enrolls using one of the SEPs adopted under 
section 1837(m) of the Act will not be assessed LEPs for the coverage 
period that begins with that SEP enrollment.
    Comment: Multiple commenters recommended that CMS provide education 
to individuals who may be eligible for this SEP prior to their release 
from incarceration. Commenters showed concern over this population 
navigating the Medicare enrollment process and lacking the community 
resources that non-incarcerated people may have. Further, commenters 
noted that it would be unlikely that incarcerated individuals would 
receive any information through the mail about their

[[Page 66465]]

IEP, GEP, or any other helpful Medicare literature, therefore causing 
Medicare enrollment to be a daunting, unfamiliar process. Commenters 
also recommended that CMS provide notification of this SEP to eligible 
individuals to ensure that formerly incarcerated individuals can 
benefit from this SEP.
    Response: We thank the commenters for their concerns and 
suggestions. As a part of implementing this final rule, we will be 
updating CMS publications, websites, and outreach materials. We also 
intend to work with stakeholders (for example, SHIPs, beneficiary 
advocacy groups, etc.) to raise awareness and understanding of all of 
the new SEPs.
    We appreciate the support and feedback received from commenters on 
this SEP. Based on feedback from commenters, we will be finalizing this 
SEP as proposed with the following modifications:
     We will be extending the SEP duration and revise 
Sec. Sec.  406.27(d)(2) and 407.23(d)(2) to reflect that the SEP starts 
the day of the individual's release from incarceration and ends the 
last day of the 12th month after the individual is released from 
incarceration.
     We are revising the text of the regulations at Sec. Sec.  
406.27(d) and 407.23(d) to use the phrase ``in custody of penal 
authorities'' as well as citing to Sec.  411.4(b) in order to be clear 
that the scope of this new SEP is aligned with the scope of Sec.  
411.4(b). This change in terminology is intended to eliminate any 
unintended ambiguity that using different terms in these regulations 
could produce.
     We are revising the entitlement date of this SEP at 
Sec. Sec.  406.27(d)(3) and 407.23(d)(3) to provide that entitlement 
begins the first day of the month following the month of enrollment. 
Individuals also have the option of choosing an entitlement date 
retroactive to the first day of the month of their release from 
incarceration (not to exceed 6 months).
e. SEP To Coordinate With Termination of Medicaid Coverage
    Many beneficiaries are already enrolled in Medicaid when they 
initially qualify for Medicare at age 65, or if they are under age 65, 
after receiving 24 months of Social Security Disability Insurance 
(SSDI). While some of these individuals retain Medicaid coverage after 
becoming eligible for Medicare, others lose Medicaid benefits and/or 
eligibility entirely. For example, when an individual enrolled in the 
adult group under section 1902(a)(10)(A)(i)(VIII) of the Act and 42 CFR 
435.119 becomes eligible for Medicare, they become ineligible for the 
Medicaid adult group per Sec.  435.119(b)(3).\8\
---------------------------------------------------------------------------

    \8\ To date, 39 States have chosen to cover the adult group 
under Sec.  435.119 (b). The adult group has an income limit of 133 
percent of the FPL, but a basic standard deduction of 5 percent of 
the FPL is applicable as described in section 6012(a)(1) of the 
Internal Revenue Service Code. (See 42 CFR 434.603(e).
---------------------------------------------------------------------------

    Unless such individuals are eligible for Medicaid on another basis, 
such as based on receiving supplemental security income (SSI), they 
will no longer be eligible for Medicaid. Many such individuals qualify 
for another Medicaid eligibility group, such as a Medicare Savings 
Program (MSP) group, but others lose Medicaid coverage entirely because 
they do not qualify for another Medicaid eligibility group.
    Low-income Medicare beneficiaries experience poorer health outcomes 
than their higher-income counterparts.\9\ Based on program experience 
and reports from stakeholders, we are aware that some individuals who 
lose all Medicaid coverage after newly qualifying for Medicare may 
experience confusion and administrative barriers that undermine a 
seamless transition from Medicaid to Medicare coverage, risking a 
period of time without health insurance and a possible LEP for these 
at-risk individuals.
---------------------------------------------------------------------------

    \9\ For information about the health outcomes of low-income 
Medicare beneficiaries, see HHS Office of the Assistant Secretary 
for Planning and Evaluation (2016, December). Social Risk Factors 
and Performance Under Medicare's Value-Based Purchasing Programs. 
https://aspe.hhs.gov/sites/default/files/migrated_legacy_files//171041/ASPESESRTCfull.pdf.
---------------------------------------------------------------------------

    Current Medicaid rules attempt to facilitate beneficiary 
transitions between Medicaid and other health coverage programs before 
the beneficiary loses Medicaid coverage. On September 7, 2022, the 
Federal Register included a notice of proposed CMS rulemaking entitled 
``Streamlining the Medicaid, Children's Health Insurance Program, and 
Basic Health Program Application, Eligibility Determination, 
Enrollment, and Renewal Processes'' that aims to improve continuity of 
health coverage; however, for purposes of this rulemaking CMS refers 
only to current regulations. Before terminating or reducing the scope 
of Medicaid coverage for individuals who become eligible for Medicare, 
the State Medicaid agency must conduct a redetermination of 
eligibility, including a determination of whether the individual is 
eligible for Medicaid on another basis under Sec. Sec.  435.916(d), 
435.916(f)(1) and 435.930(b). The State must continue the same level of 
Medicaid coverage until the State completes the eligibility 
redetermination and provides at least 10 days of advance notice and 
fair hearing rights in accordance with Sec.  435.917 and 42 CFR part 
431 subpart E. If, during the redetermination process, an individual is 
found to no longer be eligible for the eligibility group under which 
they had been most recently receiving coverage, the State must then: 
(1) move the individual to a different eligibility group for which the 
individual is eligible or, (2) in instances in which the individual is 
not eligible for another Medicaid eligibility group, determine the 
individual's potential eligibility for other insurance affordability 
programs, in accordance with Sec.  435.916(f)(2), and terminate the 
individual's Medicaid coverage.
    In the proposed rule (87 FR 25098), we noted that, despite these 
requirements, there are multiple scenarios that can prevent a seamless 
transition to Medicare coverage. We explained that States sometimes 
fail to complete redeterminations timely, sometimes not until months 
after the individual first qualifies for Medicare.\10\ When this 
happens, an individual may retain Medicaid even though the individual 
no longer technically meets the Medicaid eligibility criteria. State 
Health Insurance Assistance Programs (SHIPs) and beneficiary advocacy 
groups have reported that such individuals sometimes miss their IEP 
because they continue to be covered by Medicaid and assume it is not 
necessary for them to sign up for potentially duplicative health 
coverage. Moreover, many States do not cover the Part B premiums for 
individuals remaining in the adult group pending a redetermination 
under their buy-in agreement.\11\ Because individuals in

[[Page 66466]]

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

    \10\ Recent HHS Office of Inspector General reports and State 
audits have cited cases in which States continued to provide 
coverage for many months after a change impacting eligibility was 
identified that should have prompted a redetermination. See for 
example: Louisiana Legislative Auditor. (2018, November 8). Medicaid 
Eligibility: Wage Verification Process of the Expansion Population. 
https://www.lla.la.gov/PublicReports.nsf/
1CDD30D9C8286082862583400065E5F6/$FILE/0001ABC3.pdf; Colorado Did 
Not Correctly Determine Medicaid Eligibility for Some Newly Enrolled 
Beneficiaries. https://oig.hhs.gov/oas/reports/region7/71604228.pdf; 
HHS Office of the Inspector General. (2019b, August). California 
Made Medicaid Payments on Behalf of Newly Eligible Beneficiaries Who 
Did Not Meet Federal and State Requirements. https://oig.hhs.gov/oas/reports/region9/91602023.pdf; HHS Office of the Inspector 
General. (2018, February). New York Did Not Correctly Determine 
Medicaid Eligibility for Some Non-Newly Eligible Beneficiaries. 
https://oig.hhs.gov/oas/reports/region2/21601005.pdf; HHS Office of 
the Inspector General. (2019, July).
    \11\ Under their buy-in agreements with CMS, some States are 
required to enroll all Medicaid beneficiaries in Medicare Part B and 
to pay the premiums on their behalf (known as ``Part B buy-in''). If 
such a State has not completed the eligibility redetermination for 
an individual enrolled in the adult group before the first month 
they qualify for Medicare, the State must enroll the individual in 
Part B buy-in for all months in which the individual is enrolled in 
the adult group. CMS Manual for the State Payment of Medicare 
Premiums, chapter 1, section 1.4, https://www.cms.gov/files/document/chapter-1-program-overview-and-policy.pdf. See section 
II.D.3.e. of this proposed rule for a discussion of buy-in coverage 
groups available for Part B.
---------------------------------------------------------------------------

    During the ongoing Public Health Emergency in response to the 
Coronavirus Disease 2019 outbreak (COVID-19 PHE), as a condition of 
receiving the federal medical assistance percentage (FMAP) increase 
authorized by the Families First Coronavirus Response Act (FFCRA) (Pub. 
L. 116-127), States claiming the FMAP increase have been required to 
maintain Medicaid enrollment for nearly all individuals enrolled in 
Medicaid as of March 18, 2020, through the end of the month in which 
the COVID-19 PHE ends. This condition, known as the continuous 
enrollment requirement or continuous enrollment condition, applies to, 
among others, individuals who qualified for or were enrolled in 
Medicaid during this time period in the adult group and subsequently 
became eligible for Medicare.
    As discussed in the proposed rule (87 FR 25099), since the start of 
the COVID-19 PHE, beneficiary advocacy groups and SHIPs have reported 
to us that a substantial number of beneficiaries who became eligible 
for Medicare while enrolled in the Medicaid adult group may have 
interpreted States' notifications that their Medicaid coverage would 
remain intact throughout the COVID-19 PHE (and the ensuing months of 
continuous coverage after they qualified for Medicare) to mean they did 
not need to take any action during the COVID-19 PHE to secure or 
maintain health coverage, including enrolling in Medicare. 
Consequently, we anticipated that some beneficiaries who maintained 
adult group eligibility are likely to have missed their IEPs as a 
result of confusion based on the COVID-19 PHE. Based on these reports, 
we indicated concern that when the COVID-19 PHE ends and states resume 
routine eligibility and enrollment operations for Medicaid, including 
taking action on pending redeterminations necessitated by changes in 
beneficiary circumstances, such individuals would end up being 
terminated from Medicaid and would experience a gap in coverage and 
lose access to critical health care as a result. Further, we explained 
that once they do enroll in Medicare, they could incur late enrollment 
penalties.
    As mentioned previously, under an existing requirement under the 
Medicaid program designed to maximize continuity of coverage for 
beneficiaries whom States have determined ineligible for Medicaid, 
States must determine or assess their potential eligibility for other 
insurance affordability programs, such as the Children's Health 
Insurance Program (CHIP) and health insurance coverage available on the 
Marketplace with financial assistance and transfer their accounts to 
such programs as appropriate under Sec. Sec.  435.916(f)(2) and 
435.1200(e). As discussed in the proposed rule (87 FR 25099), although 
insurance affordability programs have not been defined to include 
Medicare, promoting a seamless transition from Medicaid to Medicare 
coverage is also very important. The ability to enroll in Medicare can 
be vital in preventing gaps in health coverage, especially if 
individuals lack access to other health insurance and may be subject to 
an LEP when they do enroll in Medicare.
    To remove barriers that present an exceptional condition that could 
prevent individuals from transitioning from coverage under the Medicaid 
program to coverage under the Medicare program, we proposed an SEP at 
Sec. Sec.  406.27(e) and 407.23(e) for individuals who lose Medicaid 
eligibility entirely after the COVID-19 PHE ends or on or after January 
1, 2023 (whichever is earlier) and have missed a Medicare enrollment 
period. We anticipated our proposals would advance health equity by 
improving low-income individuals' access to continuous, affordable 
health coverage and use of needed health care consistent with the 
Executive Order on Advancing Racial Equity and Support for Underserved 
Communities Through the Federal Government and the Executive Order on 
Continuing to Strengthen Americans' Access to Affordable, Quality 
Health Coverage.
    We proposed at Sec. Sec.  406.27(e)(1) and 407.23(e)(1) that to be 
eligible for this SEP, an individual must demonstrate they are eligible 
for Medicare and their Medicaid eligibility is terminated on or after 
January 1, 2023, or is terminated after the last day of the COVID-19 
PHE as determined by the Secretary, whichever is earlier. At Sec. Sec.  
406.27(e)(2)(i) and 407.23(e)(2)(i), we proposed that if the 
termination of Medicaid eligibility occurs after the last day of the 
COVID-19 PHE and before January 1, 2023, the SEP starts on January 1, 
2023 and ends on June 30, 2023. At Sec. Sec.  406.27(e)(2)(ii) and 
407.23(e)(2)(ii), we proposed that if the termination of Medicaid 
eligibility occurs on or after January 1, 2023, the SEP starts when the 
beneficiary receives notice of an upcoming termination of Medicaid 
eligibility and ends 6 months after the termination of eligibility. We 
anticipated that this extended duration would allow this at-risk 
population sufficient opportunity to enroll in Medicare.
    We also noted that, unlike the other proposed SEPs for exceptional 
conditions, this SEP could apply to a circumstance that occurs before 
January 1, 2023 (that is, if the end of the COVID-19 PHE and the 
individual's Medicaid termination occur before such time). We 
maintained that such a deviation was warranted in this limited 
circumstance given the novel COVID-19 outbreak and unprecedented 
Federal, State, and local efforts to combat it.
    We proposed at Sec. Sec.  406.27(e)(3) and 407.23(e)(3) that 
entitlement to Part A and Part B, respectively, would begin the first 
day of the month following the month of enrollment, so long as it is 
effective after the end of the COVID-19 PHE or January 1, 2023, 
whichever is earlier. We noted that individuals whose Medicaid 
eligibility is terminated after the end of the COVD-19 PHE, but before 
January 1, 2023 (if applicable), have the option of requesting that 
entitlement begin back to the first of the month following termination 
of Medicaid eligibility provided the individual pays the monthly 
premiums for the period of coverage.
    Lastly, we proposed at Sec. Sec.  406.27(e)(4) and 407.23(e)(4) 
that individuals who otherwise would be eligible for this SEP, but 
enrolled in Medicare during the COVID-19 PHE prior to January 1, 2023, 
if applicable, are eligible to have LEPs collected under Sec. Sec.  
406.32(d) or 408.22 reimbursed and ongoing penalties removed. Given the 
unique nature of this specific SEP, and the fact that we proposed that 
individuals could be eligible for the SEP if the COVID-19 PHE ends 
before January 1, 2023, we concluded that it is appropriate and fair 
that these individuals not be subject to an LEP that would not have 
been collected had they known about this remedy at the time of 
enrollment.
    We received the following comments, and our responses follow.
    Comment: Several commenters expressed general support for the SEP 
to Coordinate with Termination of Medicaid Coverage (Medicaid SEP) as

[[Page 66467]]

proposed. Some commenters were particularly appreciative of the 
reimbursement of the LEPs for individuals who would have been eligible 
for the Medicaid SEP, but already enrolled in Medicare.
    Response: We appreciate the comments in support of our proposal. We 
anticipate this proposal will help support continuous coverage for 
individuals as they transition from Medicaid to Medicare coverage after 
the COVID-19 PHE ends and beyond.
    Comment: A few comments sought to further address potential gaps in 
coverage during the transition from Medicaid to Medicare coverage. A 
commenter recommended that we require States to continue Medicaid 
enrollment until the individual is actually enrolled in Medicare.
    Response: We lack the statutory authority to require that Medicaid 
enrollment continue for individuals who are ineligible for Medicaid 
beyond the end of the COVID-19 PHE and until the individual is actually 
enrolled in Medicare. Beginning the month following the month in which 
the COVID-19 PHE has ended, individuals who are ineligible for Medicaid 
may not remain enrolled in Medicaid after the State makes a 
redetermination that they are ineligible for such coverage.\12\ 
Therefore, we are unable to accept the commenter's recommendation.
---------------------------------------------------------------------------

    \12\ The continuous enrollment provision in the FFCRA provides 
an exception to this rule, but it is limited to the COVID-19 PHE.
---------------------------------------------------------------------------

    However, we share the commenters' concerns about gaps in health 
coverage as individuals transition from Medicaid to Medicare health 
coverage. Under the proposal, the effective date of the Medicare 
enrollment is the month following the month of the SEP enrollment. 
Therefore, if individuals do not apply for this SEP upon receipt of the 
Medicaid termination notice, they would likely have a gap in coverage 
before Medicare coverage starts. Any delay in applying for this SEP 
after the loss of Medicaid coverage could be particularly harmful for 
people who may need to seek medical care in the intervening time. As 
such, to address the commenters' concerns and reduce gaps in coverage 
for individuals transitioning between Medicaid and Medicare coverage, 
we are finalizing revisions to Sec.  406.27(e)(3) to add paragraph 
(iii) and Sec.  407.27(e)(3) to add paragraph (iii) to allow 
individuals the option to elect retroactive Medicare entitlement back 
to the date of Medicaid termination but no earlier than January 1, 
2023. If an individual selects this option, they must pay the premiums 
for the retroactive covered time period.
    Comment: A few commenters requested clarification on whether 
individuals who are only entitled to Part A if they pay a premium 
(premium Part A) and live in group payer States can use this SEP to 
enroll in premium Part A for the purposes of enrolling in the Qualified 
Medicare Beneficiary (QMB) eligibility group.
    Response: Under proposed Sec.  406.27(e), individuals who are 
entitled to premium Part A, have missed their initial Medicare 
enrollment, and lose all Medicaid eligibility have access to this SEP. 
We do not make a distinction between access to this SEP for individuals 
who live in States that have elected to extend their buy-in agreement 
to include Medicare Part A (Part A buy-in States) and those that did 
not (group payer States).\13\ As such, individuals who are entitled to 
Part A and live in a group payer State may also use this SEP to enroll 
in premium Part A under existing SSA processes.
---------------------------------------------------------------------------

    \13\ For more information about the distinction between a Part A 
buy-in State and group payer State, please refer to section II.D.1. 
of this final rule.
---------------------------------------------------------------------------

    Comment: A few commenters expressed concern regarding the type of 
notice that would be required before an individual is able to use the 
SEP. The commenters expressed concern that individuals may not receive 
timely Medicaid termination notices because of recent relocations, 
homelessness, and/or mail delivery problems. The commenters suggested 
these problems may be magnified by the end of the COVID-19 PHE. As 
such, commenters suggested that CMS use actual knowledge of the 
Medicaid termination as the standard for when the Medicaid SEP time 
period should start. A commenter requested that CMS and SSA use 
existing data resources to automatically apply these SEPs for 
individuals who are able to provide basic documentation with their 
enrollment materials.
    Response: We share commenters' concerns about timely receipt of a 
State Medicaid termination notice and reducing barriers to qualifying 
for this SEP, but we decline to change the notice standard for the SEP 
to actual notice of termination. We think such a change would be 
problematic to operationalize because it would be very difficult to 
verify when any particular individual had actual knowledge of 
termination of their Medicaid coverage. This modification could also 
result in delaying the SEP until many months after the individual lost 
Medicaid coverage, which would undermine the goal of smooth transitions 
of coverage between the Medicaid and Medicare programs. However, if the 
individual lacks the original State termination notice, SSA will use 
alternative processes to verify the loss of Medicaid with the State 
Medicaid agency (for example, email and telephone contact).
    In addition, to prepare for the unwinding of the COVID-19 PHE, we 
have urged individuals to update their contact information with States 
at https://www.medicaid.gov/resources-for-states/coronavirus-disease-2019-covid-19/unwinding-and-returning-regular-operations-after-covid-19/renew-your-medicaid-or-chip-coverage/. We have also 
created a list of best practices for State Medicaid agencies as they 
prepare to unwind the COVID-19 PHE, which includes strategies to 
collect and verify updated enrollee contact information at https://www.medicaid.gov/resources-for-states/downloads/state-unwinding-best-practices.pdf. These principles and practices have been emphasized 
throughout CMS materials related to unwinding, which can be found at 
https://www.medicaid.gov/unwinding. We encourage the commenters to 
partner with us to help ensure State Medicaid agencies have updated 
contact information for beneficiaries.
    We appreciate the suggestion to ease processes for beneficiaries 
but we are unable to automatically apply the Medicaid SEP for 
individuals who try to enroll in Medicare at the end of the COVID-19 
PHE. While some individuals in Medicaid who are eligible for Medicare 
will lose eligibility for Medicaid upon the end of the COVID-19 PHE, 
others will not. Some individuals will transition to an MSP eligibility 
group or another eligibility group that is part of the State's buy-in 
group. Therefore, we decline to adopt the commenter's recommendation to 
automatically apply this SEP to eligible individuals at this time, but 
may consider options to streamline processes in future rulemaking based 
on program experience.
    Comment: Some commenters stated that our proposal to require 
Medicaid termination as the trigger for the SEP would complicate 
processes for individuals who missed their IEP during the PHE but who 
remain eligible for Medicaid after the PHE ends and redeterminations 
resume. The commenters stated, for example, that in a State that 
requires Medicare application as a condition of Medicaid eligibility, 
individuals who are otherwise eligible for Medicaid but failed to 
enroll in Medicare timely would only be able to qualify for the

[[Page 66468]]

SEP if the State terminates their Medicaid eligibility for failing to 
enroll in Medicare. However, once the individual enrolls in Medicare 
using the SEP, they would then need to re-apply for Medicaid to regain 
Medicaid coverage. The commenters therefore requested that CMS consider 
allowing individuals who missed their IEP to qualify for the SEP 
without being terminated from Medicaid.
    Response: We share the commenters' goal of avoiding administrative 
complications for individuals and States, but we decline to extend this 
SEP to individuals who missed their IEP but have not had their Medicaid 
coverage terminated. At the outset, as noted at 87 FR 25100, 
individuals who continue to qualify for a Medicaid eligibility group 
that is included in the State buy-in agreement would not need to use 
this SEP, as the State would already enroll them in Medicare without 
regard to Medicare enrollment periods and LEPs.
    However, individuals who missed their IEP and remain eligible for a 
Medicaid group that is not in the buy-in agreement could not enroll in 
Medicare outside of enrollment periods using the proposed SEP. While 
this group could benefit from the commenters' suggestion, we would need 
to further explore the policy and operational considerations of 
broadening the eligibility for this SEP (for example, how to 
effectively identify the specific affected population) and would 
benefit from additional public input and program experience. Lastly, we 
note that individuals who are ineligible for this SEP may still qualify 
for an SEP on a case-by-case basis for other unanticipated situations 
that involve exceptional conditions that occur on or after January 1, 
2023 at new Sec. Sec.  406.27(f) and 407.27(f).
    Finally, we would like to clarify CMS policy on requiring Medicare 
as a condition of Medicaid eligibility. As described in the buy-in 
provisions in the proposed rule at 87 FR 25120, States can require 
Medicaid applicants and beneficiaries to apply for Medicare as a 
condition of eligibility, only provided that the State pays their 
Medicare premiums under the State buy-in agreement. If the State does 
not pay the Medicare premiums for a Medicaid beneficiary under State 
buy-in and they do not enroll in Medicare, the State cannot terminate 
the individual for failing to apply for Medicare.
    Comment: Another commenter sought clarification on how the SEP 
would apply to individuals who failed to timely enroll in Medicare 
because they remained enrolled in adult group coverage during the PHE 
and are then enrolled in Medicaid with a spenddown amount after normal 
operations resume. These individuals have countable income over the 
eligibility limit for Medicaid and must deduct their incurred medical 
expenses to reduce their income down to the medically needy income 
level (``spenddown amount'') in order to be eligible for Medicaid in a 
given period. The commenter inquired whether individuals with a 
spenddown amount are eligible for this SEP, particularly if they do not 
meet their spenddown amount during a given period either because their 
medical expenses have dipped or they did not submit the necessary 
paperwork to prove they have met their spenddown amount.
    Response: We acknowledge the difficulties and variability of 
Medicaid eligibility for individuals who must meet a spenddown to 
qualify for Medicaid. We clarify that the proposed SEP would not apply 
to individuals who apply for Medicare when they have already met their 
spenddown amount because they are still eligible for Medicaid. On the 
other hand, the SEP would apply to individuals if they fail to meet 
their spenddown amount in a given period and apply using the SEP while 
their Medicaid coverage is not in effect. We will welcome feedback on 
experiences with this SEP among individuals who must meet a spenddown 
to qualify for Medicaid to inform future rulemaking.
    Comment: A commenter sought clarification on whether certain 
individuals would qualify for the proposed SEP. In particular, the 
commenter questioned whether the SEP applies to individuals who missed 
a Medicare enrollment period before the COVID-19 PHE began. The 
commenter also inquired whether individuals can qualify for the SEP if 
they voluntarily withdraw from Medicaid before the end of the COVID-19 
PHE. Finally, the commenter requested we explain if States or an 
individual can request exceptions to the parameters of the proposed 
SEP.
    Response: We appreciate the commenter's questions. Under Sec. Sec.  
406.27(e)(1)(ii) and 407.27(e)(i)(ii), the SEP is available to 
individuals who have missed a Medicare enrollment period and whose 
Medicaid eligibility is terminated on or after January 1, 2023 or is 
terminated after the last day of the COVID-19 PHE, whichever is 
earlier. We did not specify when an individual must have missed a 
Medicare enrollment period. Therefore, in the commenter's first 
example, an individual who missed a Medicare enrollment period prior to 
start of the COVID-19 PHE (for example, January 31, 2020) and meets 
other applicable requirements under Sec. Sec.  406.27(e) and 407.27(e) 
would qualify for the SEP.
    In response to the commenter's question about voluntary 
withdrawals, we note at the outset that voluntary terminations from 
Medicaid are exceedingly rare and, as such, we do not expect the issue 
the commenter raised to occur with any frequency. Nonetheless, we 
clarify that this SEP would not apply to individuals who were 
determined ineligible for Medicaid but kept enrolled due to the 
continuous coverage enrollment provision in the FFCRA and who 
voluntarily withdraw from Medicaid before the PHE ended (or individuals 
who give up Medicaid coverage on or after January 1, 2023). The 
rationale for this SEP was predicated on ensuring smooth transitions 
between the Medicaid and Medicare programs, trying to remedy the gaps 
in coverage that are created through involuntary delayed terminations 
of Medicaid and the challenges of navigating different States' 
processes with regard to redeterminations. It is our understanding that 
individuals who voluntarily terminate their Medicaid coverage would not 
experience the same gaps in health coverage that individuals facing 
involuntary terminations experience. Based on program experience, 
individuals who give up Medicaid coverage tend to have other available 
sources of health coverage. Additionally, individuals who voluntarily 
terminate Medicaid coverage do not have the same challenges with 
States' processes that individuals who are involuntarily terminated 
from Medicaid experience.
    Finally, we did not propose an option for individuals or States to 
request an exception to the parameters of this proposed SEP. However, 
as noted previously, individuals who are ineligible for this SEP may 
still qualify for an SEP on a case-by-case basis for other 
unanticipated situations that involve exceptional conditions that occur 
on or after January 1, 2023 at new Sec. Sec.  406.27(f) and 407.27(f). 
After considering the comments we received and for the reasons outlined 
in the proposed rule and our responses to comments, we are finalizing 
our proposal with a modification to our proposed SEP at Sec. Sec.  
406.27(e) and 407.27(e) to allow retroactive entitlement to the date of 
termination of Medicaid coverage but no earlier than January 1, 2023.

[[Page 66469]]

f. SEP for Other Exceptional Conditions
    We also proposed to retain the ability to provide SEPs on a case-
by-case basis for other unanticipated situations that involve 
exceptional conditions and warrant an SEP. This SEP would allow us to 
grant SEPs on a case-by-case basis for circumstances we do not have 
enough experience to consider or anticipate that could create a barrier 
to enrollment. We acknowledge that there is no way to predict the full 
range of circumstances that would warrant an SEP--they are 
``exceptional''--so we need this SEP for exceptional conditions to be 
timely in our response to beneficiaries with unique cases, given the 
time it takes to establish a more targeted SEP via rulemaking.
    The proposed parameters of this SEP were as follows:
     At Sec. Sec.  406.27(f) and 407.23(f), we proposed to 
create an SEP that would provide an enrollment opportunity for 
individuals where conditions beyond their control caused them to miss 
an enrollment period and prevented them from timely enrolling in 
premium Part A or Part B or both during the IEP, GEP or other 
prescribed SEPs.
     At Sec. Sec.  406.27(f)(1) and 407.23(f)(1), we proposed 
that such SEPs would be granted on or after January 1, 2023, if the 
individual demonstrates that conditions outside of their control caused 
them to miss an enrollment period and the condition was determined 
exceptional in nature.
     At Sec. Sec.  406.27(f)(2) and 407.23(f)(2), we proposed 
that the SEP duration would be determined on a case-by-case basis
     At Sec. Sec.  406.27(f)(3) and 407.23(f)(3), we proposed 
that entitlement would begin the first day of the month following the 
month of enrollment, and only for exceptional conditions that arise on 
or after January 1, 2023.
    We received the following comments on the SEP for Other Exceptional 
Conditions:
    Comment: Commenters expressed incredible support for the case-by-
case SEP, and many commenters included suggestions to establish new, 
separate SEPs along with those discussed in the proposed regulation. 
For example, some commenters urged us to expand this SEP to include 
certain socio-demographic groups. Notably, a few commenters expressed 
support and suggested a separate SEP for immigrants who have passed the 
5-year requirement, but are under the impression that they need to wait 
until citizenship before they can enroll in Medicare. This 
misinterpretation inadvertently causes them to miss their IEP. The 
commenter detailed that the underlying issue is a misunderstanding of 
eligibility for Medicare for immigrants and a lack of notice, hence the 
need for a new SEP instead of individual equitable relief.
    Similarly, another commenter urged CMS to grant a new SEP, or waive 
the LEP, to eligible American Indian and Alaska Native individuals if 
they inadvertently miss their IEP due to the complicated nature of the 
Indian health care delivery system. They cited that such an opportunity 
would fall in line with the agency's commitment to improving the health 
of this population and eliminate barriers to enrollment and coverage.
    Response: We acknowledge and appreciate all comments received. 
Under Sec. Sec.  406.20(b)(2)(ii) and Sec. Sec.  407.10(a)(2)(iii), 
immigrants over age 65 can qualify for, and enroll in, premium Medicare 
Part A and Part B after 5 continuous years of legal residency in the 
United States. Individuals who identify as American Indian and Alaska 
Native are able to seek and receive care through the Indian Health 
Service (IHS). Because the IHS works closely, and often in tandem with 
CMS, Medicare coverage information is readily provided to entitled 
beneficiaries who interact with the system.
    With this understanding, we believe there are avenues through which 
individuals within these populations can receive adequate and accurate 
information about Medicare eligibility and enrollment. While we are 
sensitive to the conditions presented, we do not see a need to revise 
our regulations or establish a new, separate specific SEP for these 
groups as it is not clear to CMS that they meet the definition as 
exceptional conditions and we do not have evidence that the potential 
exceptional conditions impact a broad enough group of individuals to 
necessitate the establishment of a specific SEP. An individual who can 
present documentation to SSA that an exceptional condition that was 
outside their control prevented that individual from enrolling in 
Medicare may qualify for the Other Exceptional Conditions SEP on a 
case-by-case basis. CMS will work with SSA to monitor the use of the 
Other Exceptional Conditions SEP, and if a particular exceptional 
condition that impacts a broad number of individuals becomes apparent 
in that data analysis, we will consider adding additional specific SEPs 
in the future.
    Ultimately, we remain committed to improving education and outreach 
efforts for these populations to remedy current misunderstandings, 
bridge knowledge gaps, and eliminate enrollment barriers. We will 
continue to partner with existing stakeholders to ensure that clear and 
comprehensive information is provided to beneficiaries so they are able 
to make an informed coverage choice in a timely manner. We will also 
continue to evaluate the data collected on the case-by-case exceptional 
conditions SEP to determine whether any issues arise that warrant the 
creation of a unique exceptional conditions SEP for these populations.
    Comment: A few commenters mentioned the existing SEP for 
individuals serving as volunteers outside the U.S. at the time they 
first become eligible for Medicare who are participating in a program 
sponsored by a 501(c)(3) covering at least a year, and who demonstrate 
health insurance coverage while serving in the program. Consequently, 
they urged CMS to expand the existing SEP for those living abroad who 
have been covered by private or national insurance, in that country and 
wish to return to the U.S. and enroll in Medicare.
    Response: We acknowledge and thank the commenters for their input. 
Under SSA publication No. EN-05-10137,\14\ for an individual living 
abroad who may be eligible for Medicare, there are generally no 
restrictions from collecting Social Security benefits and enrolling in 
Medicare. This applies regardless of if they return to reside in the 
United States or not. Additionally, individuals who live abroad are 
able to still pay their premium, if required, and be enrolled in 
Medicare Part A or Part B during their IEP. Given that there are not 
any exceptional conditions that prevent these individuals from 
enrolling in Medicare, we do not believe that an expansion on the 
current SEP, or creation of a new, separate SEP is warranted under this 
circumstance. (We note that Medicare generally does not pay for 
services that are not furnished within the United States. See 42 CFR 
411.9.)
---------------------------------------------------------------------------

    \14\ https://www.ssa.gov/pubs/EN-05-10137.pdf.
---------------------------------------------------------------------------

    Comment: Another commenter urged CMS to consider establishing an 
additional SEP for individuals who have relied on coverage from the 
Veterans Administration (VA). Specifically, they cited that after these 
individuals missed their IEP for Medicare and realized that the VA 
coverage no longer meets all of their needs, they want a new 
opportunity to enroll in Part B.
    Response: Veterans, like all other Medicare beneficiaries, who 
receive Social Security benefits at the time they reach age 65 receive 
a notice about

[[Page 66470]]

Medicare coverage, regardless of VA coverage. In addition, for those 
not collecting Social Security benefits at age 65, there are a number 
of resources available to those receiving VA health benefits that 
advise them to enroll in Medicare on their own, or if applicable, their 
spouse's record as described on pages 19 and 90 of the 2022 Medicare 
and You Handbook for additional information. The guidance also explains 
the resulting consequence for not filing, especially in situations 
where he or she is not eligible for premium-free Part A based on their 
own work record.
    For these reasons, we do not concur with the need for a specific 
SEP for this population. We will continue to refine awareness and 
education efforts on eligibility and enrollment for this target 
population to help to eliminate barriers to timely enrollment.
    Comment: Another commenter suggested that CMS create a permanent, 
separate SEP for individuals who were given erroneous information by an 
SSA or other federal employee. They note that, while equitable relief 
is typically available for such situations, SSA is not required to 
reply to these requests within a specific timeframe, therefore, causing 
beneficiaries to wait for months or initiate contact for a reply. The 
commenter also noted that there is no formal appeal process for a 
denied request.
    Response: We thank the commenter for this insight, however, the SEP 
is not intended to replace equitable relief available under section 
1837(h) of the Social Security Act and codified at 42 CFR 407.32. There 
are specific parameters for the exceptional conditions SEP, as outlined 
in the proposed rule, including that the reason for the SEP must be 
exceptional in nature, should not create incentive to delay enrollment 
in Medicare, and is the most appropriate resolution. The equitable 
relief process offers additional flexibility that goes beyond the 
parameters of the exceptional conditions SEP. By providing equitable 
relief, SSA has the ability to offer additional relief to enrollees 
such as retroactive coverage, waived premiums, or creation of an 
enrollment opportunity to essentially eliminate the effects of the 
government error and meet their coverage needs. Although SSA is not 
required to process equitable relief requests in a specific timeframe, 
they aim to process these requests within 30 days from the time it is 
assigned to a technician. Once the case is processed, the technician 
notifies the enrollee, in writing, to explain the type of relief 
granted or if the request for relief is denied. This timeline may be 
altered due to the need for SSA to solicit additional documentation or 
verify submitted documentation.
    Finally, in response to the commenter's concern about the appeals 
process for equitable relief. We will continue to collaborate closely 
with SSA to be as transparent as possible with the equitable relief 
process, and that options to enroll in Medicare remain accessible.
    Comment: A commenter recommended that CMS should consider 
implementing an SEP for individuals who lose Medicare coverage for 
failure to pay premiums such that it can only be used twice per 
beneficiary. They cited that this kind of SEP would avoid the cyclical 
re-enrollment process for individuals who are unable to pay their 
premiums.
    Response: As discussed in the proposed rule, the scope of the 
exceptional conditions SEP is intended to provide a new enrollment 
opportunity and remove any penalties for late enrollment, not to 
provide premium relief. CMS does not consider non-payment of premiums 
for economic reasons as a primary justification for an exceptional 
condition, therefore, this would not fall under the new SEP umbrella. 
Non-payment of premiums could qualify though as a secondary outcome of 
a major event that could qualify as an exceptional condition. Further, 
when individuals do not enroll in Medicare in a timely manner, it puts 
them at risk for experiencing gaps in coverage and delays in needed 
health care treatment. Also, as stated in the proposed rule, if an 
individual is experiencing financial constraints, there are mechanisms 
in place (including State buy-in, MSP and premium payment plans) that 
would more appropriately provide support for affected individuals while 
ensuring continuity in their health care coverage. For these reasons, 
we will not be establishing a new, separate SEP for this condition.
    Comment: A commenter recommended that SEPs be established in 
Medicare Parts C and D to coordinate with the enrollment period and 
effective date changes in this rule. They added that we also consider 
creating a new SEP for MA-only plans for those who enroll in Part B 
(and premium Part A) during the GEP.
    Response: We appreciate the thought supporting this comment. The 
establishment of new SEPs for Medicare Parts C and D is outside the 
scope of this rule making.
    Comment: Several commenters applauded our desire to use the 
information and experience gained from the flexibility of this newly 
established SEP to inform the creation of future SEPs. In their 
support, they also suggested that we and, to the extent relevant, the 
SSA track and report any trends or patterns in the use (and 
limitations) of these new SEPs.
    Response: We appreciate the support and recommendation. We expect 
that the flexibility of this SEP will inform any changes that may be 
desirable in the future. In order to provide for additional 
flexibility, and reduce confusion, we are revising the duration of the 
SEP to establish a minimum time period. Specifically, we are revising 
Sec. Sec.  406.27(f)(2) and 407.23(f)(2) to state that the SEP duration 
is determined on a case by case basis, but will be no less than 6 
months.
    We do plan to track trends and utilize the data from any frequently 
occurring situations to help guide discussions regarding the creation 
of new SEPs, which would be subject to further notice and comment 
rulemaking. In regards to publicly reporting these trends, we will 
consider in the future whether sharing data is appropriate and feasible 
given potential beneficiary privacy concerns.
    Comment: A commenter from a health plan supported our proposals, 
but had some questions with regard to the logistical technicalities. 
Specifically, they wanted to know how we will designate the SEP reason 
codes and if they will be released as part of new CY 2023 guidance. 
Another commenter also questioned if we will be making the 
determinations around the exceptional conditions and how the process 
will work overall.
    Response: We thank the commenters for their recommendations to 
clarify several factors of this new SEP. For Part C/D SEPs, health 
plans are required to submit reason codes to CMS, however, as the SEPs 
in this regulation are Medicare Part A/B SEPs, they will be submitted 
to, and determined by, SSA and SSA will code which SEP is used for 
enrollment. Health plans would have no role in this determination 
process. We will continue to work alongside SSA to clarify guidelines 
regarding the exceptional conditions.
    We acknowledge and appreciate all of the feedback and supportive 
comments we received on the proposed SEP for other exceptional 
conditions. As discussed above, we will be finalizing this SEP with 
modifications at Sec. Sec.  406.27(f)(2) and 407.23(f)(2) to state that 
the SEP duration is determined on a case-by-case-basis, but will be no 
less than 6 months.

[[Page 66471]]

3. Technical Correction to the Calculation of the Late Enrollment 
Penalty for Individuals Enrolling on or After January 1, 2023
    Currently, section 1839(b) of the Act specifies that the LEP is 
based on the number of months that have elapsed between the close of 
the individual's IEP and the close of the enrollment period during 
which they enroll, plus certain additional months for individuals who 
reenroll. However, section 120(a)(3) of the CAA amended section 1839(b) 
of the Act to specify that, for enrollments on or after January 1, 
2023, the months that will be taken into account for purposes of 
determining any LEP include months which elapse between the close of 
the individual's IEP and the close of the month in which they enroll, 
plus, for individuals who reenroll, the months that elapse between the 
date of termination of previous coverage and the close of the month in 
which the individual enrolls. We expect that these changes will 
decrease the number of months individuals are subject to the LEP. To 
implement these changes, we proposed the following changes to our 
regulations:
     At Sec.  406.33, we proposed to revise paragraph (a) to 
reflect the requirement that, for individuals enrolling for the first 
time, the existing Part A LEP calculation requirements continue to 
apply to enrollments before January 1, 2023.
     At Sec.  406.33, we specified that the months to be 
counted for calculating the Part A LEP begin with the end of the 
individual's IEP, and extend through the end of the month in which the 
individual enrolls.
     At Sec.  406.33(c)(1), we proposed to continue to exclude 
certain months from the calculation of the LEP, based on the 
requirements currently in effect under Sec.  406.33(a)(1) through (6).
     At Sec.  406.33(c)(2), we proposed to exclude additional 
months from the calculation of the LEP for enrollments on or after 
January 1, 2023.
     At Sec.  408.24, we proposed to revise paragraph (a) to 
apply the existing Part B LEP calculation months and exceptions to 
individuals who satisfy the requirements of Sec.  408.24 before January 
1, 2023.
     At Sec.  408.24, we proposed to require that for 
individuals who satisfy the requirements of Sec.  408.24 after January 
1, 2023, the months to be counted for calculating the Part B LEP begin 
with the end of the individual's IEP, and extends through the end of 
the month in which the individual enrolls.
     At Sec.  408.24(b)(1), we proposed to continue to exclude 
certain months from the calculation of the LEP, consistent with the 
requirements currently in effect under Sec.  408.24 (a)(1) through 
(10).
     At Sec.  408.24(b)(2), we proposed to exclude additional 
months from the calculation of the LEP for enrollments on or after 
January 1, 2023.
     At Sec.  406.34, we proposed to revise paragraph (a) to 
reflect the requirement that, for individuals reenrolling in premium 
Part A, the existing Part A LEP calculation requirements continue to 
apply to enrollments before January 1, 2023.
     At 406.34, we proposed to redesignate paragraph (e) as 
paragraph (f) and add new paragraph (e) to require that the months to 
be counted for calculating the Part A LEP begin with the end of the 
individual's IEP and extend through the end of the month in which the 
individual reenrolls, and we would continue to include the months 
currently specified in paragraphs (b) and (d) of this section, as 
applicable, and the months from the end of the first period of 
entitlement through the end of the month during the GEP in which the 
individual reenrolled.
     At Sec.  406.34(e)(2), we proposed to exclude the months 
of non-coverage in accordance with an individual's use of an 
exceptional condition SEP under Sec.  406.27.
     At Sec.  408.24, we proposed to amend Sec.  408.24, to 
revise newly redesignated paragraph (c) to apply the existing Part B 
LEP calculation months and exceptions for reenrollments to individuals 
who satisfy the requirements of Sec.  408.24 before January 1, 2023.
     At Sec.  408.24(d), we proposed to require that for 
individuals who satisfy the requirements of Sec.  408.24 after January 
1, 2023, the months to be counted for calculating the Part B LEP 
include the number of months elapsed between the close of the 
individual's IEP and the close of the month in which he or she first 
enrolled and the number of months elapsed between the individual's 
initial period of coverage and the close of the month in which he or 
she reenrolled (as well as the number of months elapsed between each 
subsequent period of coverage and the close of the month in which he or 
she reenrolled).
     At Sec.  408.24(d)(2)(i), we proposed to continue to 
exclude certain months from the calculation of the LEP, consistent with 
the requirements currently in effect under Sec.  408.24(a)(1) through 
(10) and also excluding months before April 1981 during which the 
individual was precluded from reenrolling by the two-enrollment 
limitation in effect before that date.
     At Sec.  408.24(d)(2)(ii), we proposed that if an 
individual uses an exceptional condition SEP under Sec.  407.23 any 
months of non-coverage would not be counted towards the calculation of 
the SEP, provided the individual enrolls within the duration of the 
SEP.
    We received a couple of comments related to the proposed technical 
corrections for the LEP.
    Comment: A few commenters expressed support specifically for the 
proposed changes to the LEP; however, the majority of that support was 
expressed in regards to how it related to the SEP proposals. Commenters 
stated that the proposed changes would ease the financial burden that 
Medicare premiums with added penalties can present for Medicare 
beneficiaries. To further reduce financial burdens, a commenter 
recommended that the LEP should reset once an individual reaches age 
65.
    Response: We appreciate the comments and support. We note that 
under 1837(g)(1) of the Act an individual will have a new IEP for each 
continuous period of Medicare eligibility as defined by section 1839(d) 
of the Act and upon attainment of age 65. Therefore, if an individual 
was subject to an LEP prior to attainment of age 65, the premium amount 
is reset without the LEP effective with the month of attainment of age 
65. In addition, no months prior to age 65 should be counted in the 
calculation of a premium increase.
    Based on analysis of the public comments, we will be finalizing 
these technical proposals related to LEP as proposed.

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

1. History and Definition of Benefit
    In 1972, Congress enacted section 299I of the Social Security 
Amendments of 1972 (Pub. L. 92-603), which amended section 226 of the 
Act to allow qualified individuals with ESRD \15\ under the age of 65, 
to enroll in the federal Medicare health care program, beginning in 
1973. These requirements are now codified in section 226A of the Act 
and implemented in our regulations at 42 CFR 406.13. As mentioned 
earlier, section 226A(a) of the Act provides that

[[Page 66472]]

certain individuals who are medically determined to have ESRD and apply 
for Medicare coverage are entitled to benefits under Medicare Part A 
and eligible to enroll in Part B. However, section 226A(b)(2) of the 
Act currently requires that an individual's entitlement under Part A 
and eligibility under Part B based on ESRD status ends with the 36th 
month after the month in which the individual receives a kidney 
transplant.
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    \15\ Under 42 CFR 406.13(b), ESRD means that stage of kidney 
impairment that appears irreversible and permanent and requires a 
regular course of dialysis or kidney transplantation to maintain 
life.
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    The termination of Medicare entitlement has led to some 
beneficiaries losing coverage of immunosuppressive drugs that 
transplant patients would still need. Per the 2018 US Renal Data System 
(USRDS) Annual Report, 32 percent of kidney transplant recipients ages 
45-64 years old have no known or other creditable prescription drug 
coverage.\16\ Section 402(a) of the CAA established an exception that 
permits certain beneficiaries who were kidney transplant patients to 
receive a limited Part B benefit effective January 1, 2023--covering 
only those immunosuppressive drugs described in section 1861(s)(2)(J) 
of the Act. Section 402(a) of the CAA also added section 1836(b) of the 
Act to support limited eligibility under Part B for beneficiaries whose 
entitlement to insurance benefits under Part A ends by reason of 
section 226A(b)(2). These individuals are eligible to enroll (or to be 
deemed enrolled) for the new Part B immunosuppressive drug benefit 
(herein referred to as the Part B-ID benefit).
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    \16\ United States Renal Data System: 2018 USRDS Annual Data 
Report: Epidemiology of Kidney Disease in the United States, 
Bethesda, MD, National Institutes of Health, National Institute of 
Diabetes and Digestive and Kidney Diseases, 2018, from https://cjasn.asnjournals.org/content/14/3/327.
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    Not all Medicare kidney transplant patients who lose entitlement to 
Part A coverage based on section 226A(b)(2), however, are eligible to 
enroll in the new Part B-ID benefit. The CAA provided that certain 
individuals are not eligible to enroll in the new program. In general, 
if the individuals are enrolled in certain specific forms of health 
insurance or other programs that cover immunosuppressive drugs, the 
individuals would not be eligible to enroll in the Part B-ID benefit. 
We discuss the excepted individuals and the specific forms of insurance 
and programs in greater detail in section II.B.2.b. of this final rule 
entitled ``Determination of Eligibility'' and in this final rule at 
Sec.  407.55(b). Individuals who are seeking entitlement under the new 
Part B-ID benefit would also need to meet additional statutory 
criteria, as discussed in section II.B.2.b. of this final rule, and in 
this final rule at Sec.  407.57.
    Individuals enrolled in the new Part B-ID benefit would not receive 
Medicare coverage for any other items or services, other than coverage 
of immunosuppressive drugs. Section 402 of the CAA made conforming 
amendments to sections 1836, 1837, 1838, 1839, 1844, 1860D-1, 1902, and 
1905 of the Act. We proposed to revise Sec. Sec.  407.1, 408.20, 
410.30, 423.30 and establish a new subpart D (Sec. Sec.  407.55 through 
407.62) in 42 CFR part 407, entitled Part B Immunosuppressive Drug 
Benefit to implement the new Part B-ID benefit. (We note that in 
discussing these changes in the proposed rule at 87 FR 25102 we 
erroneously referred to Sec.  407.65 instead of Sec.  407.62 and are 
now correcting that error.)
    Specifically, we proposed the following:
     At Sec.  407.1(a)(6) we proposed that, sections 1836(b) 
and 1837(n) of the Act will provide for coverage of immunosuppressive 
drugs as described in section 1861(s)(2)(J) of the Act under Part B 
beginning on or after January 1, 2023.
     At Sec.  407.1(b) we proposed to retain the language that 
states that part 407 sets forth the eligibility, enrollment, and 
entitlement requirements and procedures for supplementary medical 
insurance at Sec.  407.1(b)(1), including the reference to the rules 
governing premiums in part 408 of this chapter.
     At Sec.  407.1(b)(2), we proposed to add language stating 
that this part also sets forth the eligibility, enrollment, and 
entitlement requirements and procedures for the immunosuppressive drug 
benefit provided for under sections 1836(b) and 1837(n) of the Act, 
including the short title for the Part B-immunosuppressive drug benefit 
(Part B-ID benefit).
    We received comments from patient advocates, associations, States, 
health plans, and individuals offering broad support on our proposal to 
extend coverage of immunosuppressive drugs under Medicare Part B for 
eligible individuals whose benefits under Medicare based on ESRD would 
otherwise end the 36th month after the month an individual receives a 
kidney transplant. The comments on those proposals and our responses 
follow.
    Comment: Many commenters expressed that this benefit was long-
awaited and overdue, and they pointed out that the extended coverage of 
these drugs would help to prevent organ rejection in the post-
transplant patient, and thus, will save lives and conserve Medicare 
resources. Other commenters stated that extending coverage of 
immunosuppressive drugs is clinically and economically advantageous 
given the evidence of significant improvement in quality of life, 
health outcomes, and cost savings on dialysis and hospitalization after 
a kidney transplant. A commenter pointed out that their State currently 
covers similar groups with State-only funds, but supports the creation 
of the Part B-ID benefit under Medicare. The commenter stated that this 
limited expansion of Medicare Part B is very worthwhile, and even 
though it is quite limited in scope, it has the potential to be 
lifesaving for ESRD patients.
    Response: We appreciate the overwhelming support for our proposal 
and thank the commenters for their feedback. We agree with commenters 
that these changes are advantageous and will have a positive impact on 
this population.
    Several commenters supported, but had concerns or requested 
clarifications about, the Part B-ID benefit, particularly about the 
scope of the Part B-ID benefit. Those comments and our responses are as 
follows.
    Comment: A commenter stated that Congress adopted a narrowly 
crafted provision that will leave some patients still facing high, and 
possibly prohibitive, out-of-pocket costs, including co-insurance 
costs, as well as physician and lab services, since the patient is not 
allowed to have other insurance. Another commenter noted that, due to a 
potential lack of insurance coverage 36 months post-transplant, some 
patients have chosen not to seek a transplant due to the cost concerns 
after Medicare eligibility expires. The commenter stated that while the 
new benefit does not entirely address cost considerations that can 
inhibit transplant, it is important that transplant professionals are 
fully trained about the new benefit and that it is factored into 
assessments of patients' potential stewardship of a transplanted organ. 
A commenter suggested that this patient population would benefit from 
continuing to receive coverage for physical therapy under Medicare, as 
side effects from immunosuppressive drugs could have untoward effects 
on health, including weight gain, that could result in limitation of 
movement.
    Response: We thank the commenters for their feedback. Section 
402(a) of the CAA ensures that individuals without certain other types 
of coverage whose benefits under Medicare based on ESRD would otherwise 
end with the 36th month after the month in which the individual 
received a kidney transplant,

[[Page 66473]]

can maintain coverage for their immunosuppressive drugs essential to 
prevent rejection of their transplanted kidney. The benefit parameters 
of the statute are specific, and they do not allow coverage of other 
items and services. We refer the reader to section II.B.5 of this final 
rule for further information on education and outreach efforts for the 
implementation of the Part B-ID benefit.
    We received numerous comments requesting clarification on, and 
recommendations for, coverage of various dosage forms of these drugs 
and other ancillary items that may be used in the post-transplant 
clinical setting. Those comments and our responses follow.
    Comment: Several commenters questioned if the new benefit included 
coverage for compounded formulations of immunosuppressants (for 
example, a liquid formulation of an immunosuppressive medication not 
commercially available from the manufacturer that is prepared by a 
pharmacist), and a couple of commenters added that these formulations 
were frequently used in the treatment of pediatric kidney patients. 
Some commenters suggested that CMS consider coverage for mineral or 
electrolyte supplements, like magnesium, phosphorus, and bicarbonate 
related to post-transplant care that are particularly necessary in the 
care of pediatric patients. A commenter stated that transplant 
physicians must have uninterrupted access to all brand name drugs when 
he or she deems it necessary for a particular patient. A commenter 
questioned if drugs that are not categorized as immunosuppressive 
drugs, per se, such as anti-hypertensives, or drugs used for a 
patient's co-morbid conditions would be covered. A couple commenters 
inquired about the coverage of intramuscular (IM) and intravenous (IV) 
formulations, and asked if an administration fee is included in the 
Part B-ID benefit. A commenter stated that oral immunosuppressive drugs 
are clinically appropriate for the great majority of transplant 
recipients, but excluding coverage of the administration costs for 
those recipients who do require IV or IM drugs has the potential to 
impact access to an effective immunosuppressive drug regimen for 
patients who have no clinically appropriate alternative.
    Response: Payment may be made for prescription drugs used in 
immunosuppressive therapy as described in federal regulations at 42 CFR 
410.30(a). Further, Sec.  410.30(c) states that drugs are covered under 
this provision irrespective of whether they can be self-administered. 
The lists of formulations in the proposed rule were examples only. 
Other types of formulations of immunosuppressive drugs defined in 
section 1861(s)(2)(J) of the Act as described above in the Summary 
section, including those that are not self-administered, would be 
covered and paid under this benefit. As set forth at 42 CFR 410.30(a) 
and described in Sec.  50.5.1, Chapter 15 of the Medicare Benefit 
Policy Manual, covered drugs include those immunosuppressive drugs that 
have been specifically labeled as such and approved for marketing by 
the FDA. Drugs with indications for other conditions not described in 
42 CFR 410.30(a), such as mineral deficiencies or hypertension, would 
not be covered under the Part B-ID benefit. CMS does not maintain a 
list of drugs covered under this benefit; rather, the Medicare 
Administrative Contractors (MACs) are expected to maintain, a list of 
these drugs as set out in Sec.  80.3, Chapter 17 of the Medicare Claims 
Processing Manual. The MACs are expected to keep informed of U.S. Food 
and Drug Administration (FDA) additions to the list of the 
immunosuppressive drugs and update guidance as applicable. For 
inquiries regarding specific drugs with regards to coverage under 
section 1861(s)(2)(J) of the Act, individuals may contact the DME MAC 
that processes the claim.
    With regard to compounded formulations of immunosuppressants, such 
drugs are not approved for marketing by the FDA \17\ and, therefore, 
are not covered under the Part B-ID benefit. With regard to the 
commenters' question if a fee is included for the administration of IM 
and IV formulations under the Part B-ID benefit, as we stated above, 
section 402(a) of the CAA provides that the benefits are solely for 
purposes of coverage of immunosuppressant drugs described in section 
1861(s)(2)(J). We do not have flexibility to include payment for the 
administration of the product based on the statutory language of this 
benefit, as it only includes the actual drug products.
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    \17\ https://www.fda.gov/drugs/human-drug-compounding/compounding-and-fda-questions-and-answers.
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    Comment: A couple commenters expressed concern about whether a 
beneficiary would have uninterrupted access to these drugs in the case 
of a beneficiary having issues arise at the pharmacy counter. A 
commenter stated that the reimbursement system must be fully in place 
by the January 1, 2023 effective date, otherwise, patients will be 
presented a bill or denied their prescription altogether. The commenter 
also expressed concerns in the case where a pharmacy cannot verify an 
individual patient's eligibility for the new benefit. A commenter 
questioned how the beneficiary will be assured uninterrupted access to 
their drugs in the case of data errors at the pharmacy counter. A 
commenter urged CMS to make guidance and any related resources 
available to stakeholders including plans, providers, and beneficiary 
advocates as soon as possible given the January 1, 2023 effective date 
for key provisions in the rule. The commenter stated that technical 
guidance is needed to understand if and how entitlement for the Part B-
ID benefit would be reflected in the Medicare Advantage Prescription 
Drug (MARx) system, and also requested that technical assistance be 
provided on the transaction reply codes that will be used in the MARx 
system. A commenter urged CMS to consider having a dedicated pharmacy 
hotline during the first few months so that questions and concerns by 
pharmacists can be resolved in real time. Commenters requested that CMS 
take steps to ensure that there is a safety net, and they recommended 
that CMS put in place a system that ensures access to medications while 
back-end determinations of payment responsibility are sorted out.
    Response: We thank the commenters for their feedback and concern. 
In anticipation of the January 1, 2023 effective date for the Part B-ID 
benefit, Medicare payment systems, including the Common Working File 
(CWF), ViPS Medicare System (VMS), the Multi-Carrier System (MCS), and 
the Federal Intermediary Standard System (FISS) are being modified to 
properly process claims submitted for immunosuppressive drugs under the 
Part B-ID benefit. Other entities that will assist with claims 
processing, including the Medicare Part A and Part B MACs and the 
Durable Medical Equipment MACs, have also been engaged in the 
implementation efforts. Additionally, modifications are being made to 
ensure that eligible beneficiaries are accurately recognized within 
these systems. All operational and systems changes are slated to be 
completed prior to the January 1, 2023 effective date. Therefore, we 
expect beneficiaries' access will be uninterrupted as we implement this 
new benefit.
    With respect to the public comment related to the MARx system, that 
system is used for beneficiary eligibility and

[[Page 66474]]

enrollment for Medicare Part C and Part D plans, and cannot be used by 
pharmacy providers to verify eligibility for the Part B-ID benefit. We 
do not expect that there will be a dedicated pharmacy hotline specific 
to the Part B-ID benefit; however, Medicare providers, including 
pharmacists and suppliers, can check patient eligibility, (as well as 
billing and other pertinent information) by either utilizing their MAC 
online provider portal or Interactive Voice Response (IVR) system, the 
Health Insurance Portability and Accountability Act Eligibility 
Transaction System (HETS), or their billing agencies, clearinghouses, 
or software vendors. For further information, please see the Medicare 
Learning Network instructions here: https://www.cms.gov/files/document/checking-medicare-eligibility.pdf. If a beneficiary has an issue at the 
pharmacy counter they may call 1-800-MEDICARE, and the 1-800-MEDICARE 
Call Center will troubleshoot as they currently do with existing 
provider access concerns. If the issue cannot be resolved, it will be 
escalated to the CMS Offices of Hearings and Inquiries via the current 
Ombudsman escalation process.
    We note that individuals who enroll in the Part B-ID benefit will 
be provided with a new Medicare card that will include the specific 
language that describes the benefit. These beneficiaries will also 
receive a notice with that card which provides information on the 
benefit, including use of their prior and current Medicare cards, and 
contact information for further questions or concerns. We plan to 
educate pharmacies and other health care providers later this year on 
changes related to the Part B-ID benefit patient eligibility 
transaction that will reflect immunosuppressive drug coverage, 
including the eligibility inquiry transaction reply. Pharmacies should 
contact their MAC for claims processing technical assistance as they 
currently do for other claims processing issues. Further information on 
education and outreach to inform beneficiaries and stakeholders about 
the Part B-ID benefit is discussed in section II.B.5 of this final 
rule.
    Medicare regulations do not require a pharmacist to provide minimal 
amounts of immunosuppressive therapy if the beneficiary's coverage 
cannot be verified; this would be up to the established process at the 
individual pharmacy.
    Comment: A commenter stated that the proposed rule referred to 
``successful'' kidney transplantation. The commenter recommended 
striking the term ``successful'' and simply stating that the new Part 
B-ID benefit is extended to kidney transplant recipients.
    Response: We thank the commenter for their feedback and have 
removed successful from the description used in this final rule as 
official eligibility criteria. The term ``successful'' in the preamble 
of the proposed rule was used, generally, to describe a person whose 
Medicare Part A enrollment terminated 36-months after transplant and 
whose transplanted kidney functions to the point where the individual 
does not need a regular course of dialysis to sustain life. If the 
person's transplant was not successful, the patient would likely 
require a regular course of dialysis to sustain life, and eligibility 
for Medicare coverage under Part A and Part B based on ESRD would 
continue.
2. Part B-ID Benefit Eligibility, Enrollment, Entitlement, and 
Termination
a. Eligibility for the Part B-ID Benefit
    Section 402(a)(2) of the CAA adds section 1836(b) of the Act, which 
establishes specific eligibility criteria for the Part B-ID benefit. 
Subject to exceptions, new section 1836(b)(1) of the Act provides that 
individuals whose entitlement to insurance benefits under Part A ends 
(whether before, on, or after January 1, 2023) by reason of section 
226A(b)(2), and who meet certain additional requirements, would be 
eligible to enroll (or to be deemed enrolled) in Part B solely for 
purposes of coverage of immunosuppressive drugs in accordance with 
section 1837(n) of the Act. The principal limitations on eligibility 
for the Part B-ID benefit are set out in new section 1836(b)(2) of the 
Act. Under section 1836(b)(2)(A) of the Act, individuals enrolled in 
certain other types of health coverage would not be eligible for the 
Part B-ID benefit.
b. Determination of Eligibility
    Section 1836(b)(2)(B)(i) of the Act requires the Secretary, in 
coordination with the Commissioner of Social Security (Commissioner), 
to establish a process for determining whether an individual who is to 
be enrolled, or deemed to be enrolled, in the Part B-ID benefit meets 
the requirements for such enrollment, including the requirement that 
the individual not be enrolled in other health coverage that would make 
them ineligible for the Part B-ID benefit under 1836(b)(2)(A) of the 
Act.
    In order for an individual to be enrolled in the Part B-ID benefit, 
section 1836(b)(2)(B)(ii)(I) of the Act requires that an individual 
provide to the Commissioner an attestation that they are not enrolled 
and do not expect to enroll in the excepted coverage, as described in 
section II.B.2.a. of this final rule (``Eligibility for the Part B-ID 
Benefit''), that would make the individual ineligible for the Part B-ID 
benefit under section 1836(b)(2)(A) of the Act. Section 
1836(b)(2)(B)(ii)(II) of the Act requires that the individual notify 
SSA within 60 days of enrollment in such excepted coverage. Based on 
these requirements, we proposed at Sec.  407.59(a) and (b), that all 
prospective enrollees in the Part B-ID benefit must provide to the 
Commissioner, in either a verbal attestation or signed paper form, an 
attestation that the individual is not enrolled and does not expect to 
enroll in other health coverage that would make the individual 
ineligible for the Part B-ID benefit, and that the individual agrees to 
notify the Commissioner within 60 days of enrollment in such other 
coverage as described in Sec.  407.55(b).
    We proposed that beneficiaries will be able to primarily use a 
verbal (telephonic) attestation as part of enrolling in the Part B-ID 
benefit. Generally, for the verbal attestation, an individual would 
contact SSA, and an SSA representative, using a standard script, will 
convey the requirements to the individual that are in the CMS-10798 
\18\ attestation form, described in Sec.  407.59 of this final rule. 
The individual will then attest that the individual does not have 
coverage under any of the specified health programs or insurance. The 
individual will also affirm that the statement provided was true and 
correct and that the individual acknowledged that there may be criminal 
penalties for making a false statement for purposes of obtaining these 
Medicare benefits. After the individual provides the oral attestation, 
the SSA representative will document the content of the call, and the 
document will be retained as required under SSA processes. We also 
proposed that individuals would be permitted to provide the attestation 
in writing with a pen-and-ink signature, if they choose to do so. Under 
our proposal, individuals could download a PDF-fillable version of an 
attestation form from SSA or CMS websites to print, sign, and mail to 
SSA, or to call SSA to request the form in hard copy.
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    \18\ Medicare.gov/forms-help-other-resources/medicare-forms.
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    As mentioned previously, we proposed to establish the eligibility 
criteria for the Part B-ID benefit in new Sec.  407.55, entitled 
``Eligibility to enroll.'' Specifically, in Sec.  407.55(a), we 
proposed

[[Page 66475]]

that an individual would be eligible to enroll in, be deemed enrolled, 
or re-enroll in the Part B-ID benefit if their Part A entitlement ends 
at the end of the 36th month after the month in which the individual 
received a kidney transplant, as set out under revised Sec.  
406.13(f)(2), and discussed in section II.B.5 of this final rule.
    The types of coverage that would make an individual ineligible for 
the Part B-ID benefit are specified in section 1836(b)(2)(A)(i) through 
(v) of the Act. Specifically, the Act requires that individuals shall 
not be eligible for enrollment in the Part B-ID benefit during any 
period the individual is:
     Enrolled in a group health plan or group or individual 
health insurance coverage, as such terms are defined in section 2791 of 
the Public Health Service Act;
     Enrolled for coverage under the TRICARE for Life program 
under section 1086(d) of title 10, United States Code;
     Enrolled under a State plan (or waiver of such plan) under 
title XIX of the Act and is eligible to receive benefits for 
immunosuppressive drugs described in section 1836(b) of the Act under 
such plan (or such waiver);
     Enrolled under a State child health plan (or waiver of 
such plan) under title XXI of the Act and is eligible to receive 
benefits for such drugs under such plan (or such waiver); or
     Enrolled in the patient enrollment system of the 
Department of Veterans Affairs established and operated under section 
1705 of title 38, United States Code and is either of the following:
    ++ Is not required to enroll under section 1705 of such title to 
receive immunosuppressive drugs described in section 1836(b) of the 
Act; or
    ++ Is otherwise eligible under a provision of title 38 of the 
United States Code (other than section 1710), to receive 
immunosuppressive drugs described in section 1836(b) of the Act.
    We proposed regulation text at Sec.  407.55(b) that would mirror 
those requirements, as set out in sections 1836(b)(2)(A)(i) through (v) 
of the Act. Section 1836(b)(2) of the Act contains specific exceptions 
that prevent individuals from enrolling in the Part B-ID benefit. For 
some of those provisions, section 402 of the CAA includes an additional 
limitation that the coverage must include coverage of immunosuppressive 
drugs. For other coverage, the statute does not include this 
limitation. When specific restrictions are included in one section of a 
statute but not in another, we presume that the language of the statute 
is intentional and deliberate with respect to adding the limitations. 
This is sometimes called the negative implication canon or expessio 
unius est exclusion alterius.
c. Enrollment in the Part B-ID Benefit
    Section 1837(n)(1) of the Act states that any individual who is 
eligible for coverage of immunosuppressive drugs under section 1836(b) 
of the Act, that is, whose entitlement for hospital insurance benefits 
under part A ends by reason of section 226A(b)(2) may enroll or be 
deemed to have enrolled in the Part B-ID benefit as established in 
regulations and during an enrollment period described in statute. We 
proposed in Sec.  407.57(d) that, to enroll in the Part B-ID benefit, 
an individual must submit the required attestation as described in 
Sec.  407.59. We also proposed in Sec.  407.55(c) that, if SSA denies 
an individual's enrollment in the Part B-ID benefit, the individual 
will be afforded an initial determination entitlement appeal as 
described in Sec.  405.904(a)(1). This will ensure that the 
beneficiary's statutory and due process rights will be adequately 
protected.
    We proposed to establish the provisions relating to enrollment and 
the entitlement to the Part B-ID benefit in new Sec.  407.57, titled 
``Part B-ID benefit enrollment.'' Specifically, we proposed at Sec.  
407.57(a) that an individual whose Part A entitlement ends at the end 
of the 36th month after the month in which the individual received a 
kidney transplant, on or after January 1, 2023, is deemed to have 
enrolled into the Part B-ID benefit effective the first day of the 
month in which the individual first satisfies the eligibility 
requirements proposed at Sec.  407.55, and provides the attestation 
required in proposed Sec.  407.59, prior to the termination of their 
Part A benefits.
    In accordance with new subsections 1837(n)(2) and (3) of the Act, 
certain individuals have an ongoing opportunity to enroll in the Part 
B-ID benefit regardless of whether their entitlement under Part A ended 
before or after January 1, 2023. Therefore, we proposed at Sec.  
407.57(b) that an individual whose Part A entitlement ends in 
accordance with revised Sec.  406.13(f)(2) (as discussed in section 
II.B.5. of this final rule), and who meets the Part B-ID benefit 
eligibility requirements at Sec.  407.55 and provides the attestation 
required in Sec.  407.59, may enroll in the Part B-ID benefit as 
follows:
     An individual whose entitlement ended prior to January 1, 
2023 may enroll in the Part B-ID benefit beginning on October 1, 2022 
or later.
     An individual whose entitlement ends on or after January 
1, 2023 can enroll at any time after such entitlement ends.
    We further proposed at Sec.  407.57(c) that an individual who had 
previously enrolled in the Part B-ID benefit but whose participation in 
the benefit was terminated may re-enroll in the Part B-ID benefit at 
any time if they meet the eligibility requirements at Sec.  407.55 and 
provides the attestation required in Sec.  407.59. There are no late 
enrollment penalties assessed, regardless of when an individual enrolls 
or disenrolls from the benefit.
d. Effective Date of Entitlement
    Provided the individual meets the eligibility requirements 
described at Sec.  407.55 and provides the attestation as required 
under Sec.  407.59, we proposed the following entitlement dates in 
Sec.  407.57(e):
     For individuals whose Medicare Part A entitlement based on 
ESRD status ends on or after January 1, 2023, and who submit the 
attestation required under Sec.  407.59 before the end of the 36th 
month after the month in which they receive a kidney transplant, their 
entitlement begins with the month their Part A benefits under section 
226A of the Act would end.
     For individuals who do not provide an attestation as part 
of the enrollment process for the Part B-ID benefit before their Part A 
entitlement under section 226A of the Act ends, but later provides an 
attestation, their entitlement begins with the month following the 
month in which the individual provides the attestation required in 
Sec.  407.59.
     For individuals whose entitlement ended prior to January 
1, 2023 and who submit an attestation as part of the enrollment process 
from October 1, 2022 through December 31, 2022, their entitlement 
begins January 1, 2023.
e. Termination of the Part B-ID Benefit
    Under sections 1838(b) and (h)(4) of the Act, individuals are not 
required to enroll or remain enrolled in the Part B-ID benefit. 
Individuals enrolled in the Part B-ID benefit can terminate their 
enrollment in the Part B-ID benefit by notifying SSA that they no 
longer wish to participate in the Part B-ID benefit. SSA would also 
terminate the Part B-ID benefit under certain conditions. Consistent 
with these requirements, we proposed in new Sec.  407.62, ``Termination 
of coverage,'' that the effective date of the termination of an 
individual's entitlement under the Part B-ID benefit will depend upon 
the conditions of his or her termination, as described in this section.

[[Page 66476]]

    We proposed the following requirements related to termination of 
the Part B-ID benefit:
     Under proposed Sec.  407.62(a)(1), when an individual 
enrolls in such other health coverage that would make them ineligible 
for the Part B-ID benefit as set out in Sec.  407.55(b) and notifies 
the Commissioner of this health coverage consistent with Sec.  
407.59(b), their Part B-ID benefit would be terminated effective the 
first day of the month after the month of notification.
     We proposed in Sec.  407.62(a)(1) that when an individual 
enrolls in other coverage and provides notification consistent with 
Sec.  407.59(b), their enrollment in the Part B-ID benefit would end 
effective the first day of the month after the month they provide the 
required notification. We also proposed at Sec.  407.62(a)(1) that an 
individual may request a different, prospective termination date for 
the Part B-ID benefit to align with the coverage period under the other 
insurance plan or government program.
     We proposed in Sec.  407.62(a)(2) that for an individual 
who enrolls in the Part B-ID benefit, but who subsequently enrolls in 
other health coverage as described in Sec.  407.55(b) but does not 
notify SSA within 60 days consistent with Sec.  407.59(b), the 
individual's Part B-ID enrollment would be terminated effective the 
first day of the month after the month in which SSA determines the 
individual is enrolled in health coverage described in Sec.  407.55(b).
     We proposed in Sec.  407.62(f) that, if an individual is 
involuntarily disenrolled from the Part B-ID benefit based on Sec.  
407.62(a)(2), (b) or (c), they will be permitted an initial 
determination appeal as outlined in Sec.  405.904(a)(1), which is 
consistent with existing requirements applicable to Part B coverage.
     Consistent with existing requirements applicable to Part B 
benefits at Sec.  407.27(a), which state that entitlement to Part B 
benefits ends on the last day of the month in which an individual dies, 
we proposed that entitlement to the Part B-ID benefit would end on the 
last day of the month in which the individual dies under new proposed 
Sec.  407.62(b).
     We proposed at Sec.  407.62(c) that termination of the 
Part B-ID benefit for individuals who fail to pay their Part B-ID 
benefit premiums would end as set forth in 42 CFR part 408. An 
individual will receive a grace period in which overdue premiums may be 
paid and coverage continued.
     We proposed at new Sec.  407.62(d) that an individual may 
request disenrollment at any time by contacting SSA to inform them that 
they no longer want to be enrolled in the Part B-ID benefit. Such 
individuals' enrollment would end with the last day of the month in 
which the individual provides the disenrollment request.
     We proposed that an individuals' entitlement to the Part 
B-ID benefit will terminate effective the last day of the month prior 
to the month in which the individual becomes entitled to Medicare based 
on either age, disability, or ESRD under new proposed Sec.  407.62(e).
    We received numerous comments on our proposed requirements related 
to eligibility, enrollment, effective dates of coverage, and 
termination of the Part B-ID benefit. Those comments received and our 
responses are as follows.
    Comment: Many commenters supported CMS' approach to allow 
individuals to use various methods to attest to their eligibility and 
enroll in the Part B-ID benefit. A commenter stated that the options 
that CMS proposed did not appear to be burdensome. Many commenters 
supported the verbal attestation, citing that it was simple and 
efficient, and it would avoid potential delays with signing and mailing 
statements that could result in delays in accessing needed 
immunosuppressive drugs. A commenter stated that a written approach 
would alleviate long wait times on SSA phone lines, but supported both 
verbal and written options. A commenter strongly opposed use of the 
written-only option for submitting an attestation. Other commenters 
recommended that CMS consider additional methods of attestation, 
particularly electronic submission, fax, or other signed documents.
    A commenter stated that CMS took an open-minded and forward-
thinking approach to attestation and enrollment in the Part B-ID 
benefit, and they were encouraged by the Agency's expedient use of the 
Executive Order (E.O.) on Transforming Federal Customer Experience and 
Service Delivery to Rebuild Trust in Government. The commenter also 
stated that CMS' plans for defining a suitable process and criteria for 
beneficiary enrollment in the Part B-ID program is simple, 
straightforward, and customer-centric.
    Response: We appreciate the feedback we received on our Part B-ID 
eligibility and enrollment proposals. CMS will be partnering with SSA 
to employ both a verbal and written attestation process for an 
individual to enroll in the Part B-ID benefit. An individual will be 
able to contact SSA to verbally provide an attestation to enroll in the 
Part B-ID benefit, or they can download a PDF-fillable form from the 
CMS or SSA website, complete the form, and mail to SSA. If an 
individual does not have internet access, an SSA representative can 
download the form and mail the form to the caller to complete and mail. 
At this time, forms will be accepted via U.S. mail delivery, but SSA 
plans to include an option to receive completed forms via facsimile 
(fax) in the future. We are also continuing to explore the future 
development of an electronic process to submit the attestation. To 
provide for flexibility for other attestation methods in the future, we 
are revising Sec.  407.59 to state that an individual must attest to 
SSA in either a verbal attestation, signed paper form provided by SSA, 
by electronic submission, or fax under procedures determined by SSA. 
This will give SSA the flexibility to implement a fax or electronic 
attestation process in the future, when these options become available.
    Comment: A commenter stated that submission of an attestation and 
confirmation of an individual's eligibility will be sufficient for SSA 
to enroll individuals in the Part B-ID benefit. The commenter expressed 
satisfaction with CMS' plan for monitoring and oversight that will 
enable it to address any concerns that may arise. Another commenter 
stated that we proposed that all prospective Part B-ID beneficiaries 
provide proof they lack insurance coverage of immunosuppressive drugs.
    Response: In the proposed rule, we did not propose that individuals 
would have to provide proof that they do not have coverage of 
immunosuppressive drugs. In order for an individual to be enrolled in 
the Part B-ID benefit, the statute requires that an individual submit 
an attestation to SSA that they are not enrolled in, and do not expect 
to enroll in, coverage under any of the specified health programs or 
insurance described in law that make an individual ineligible for the 
Part B-ID benefit. It also requires that the individual notify SSA 
within 60 days of enrollment in the coverage described in law. We 
proposed that an individual would be able to provide this attestation 
verbally or in writing. We agree with the first commenter that 
submission of an attestation and confirmation of an individual's 
eligibility from their previous entitlement to Medicare based on ESRD 
is sufficient for SSA to enroll individuals in the Part B-ID benefit. 
As we stated in the proposed rule, we will monitor developments in the 
Part B-ID benefit program and take appropriate action to address any 
potential areas of concern, including with respect to

[[Page 66477]]

inaccurate attestations or other conditions involving ineligible 
individuals enrolling or remaining enrolled in the Part B-ID benefit. 
We will continue to evaluate opportunities to enhance our oversight to 
ensure compliance with the eligibility requirements on an ongoing 
basis.
    Comment: A commenter questioned if an individual needs an SEP to 
enroll in the Part B-ID benefit.
    Response: Individuals do not need an SEP to enroll in the Part B-ID 
benefit. Unlike Part B (or other parts of the Medicare program) where 
individuals can only enroll during an enrollment period, if an 
individual is eligible for the Part B-ID benefit, they can enroll at 
any time and will not be subject to an LEP for months of non-coverage. 
Because individuals can gain or lose health coverage throughout their 
lifetime, it is important to extend flexibility to those needing 
coverage of their immunosuppressive drugs.
    A couple commenters provided feedback on the effective date of 
coverage for the Part B-ID benefit.
    Comment: A commenter stated that, in order to prevent kidney 
allograft rejection and maintain kidney allograft function, 
immunosuppressive drugs must be taken every day, without exception. 
Therefore, it is essential that Part B-ID enrollment processes are 
straightforward, the steps are efficient, and that coverage be 
activated immediately upon enrollment (that is, and not the first day 
of the month that follows). Another commenter stated they supported CMS 
granting the Part B-ID benefit for eligible individuals in 2022.
    Response: We appreciate the commenter's concern about an individual 
having uninterrupted access to these important drugs. However, 
enrollment in the Part B-ID benefit is a process--the individual has to 
submit an attestation; then SSA needs to verify the eligibility for the 
benefit and complete all operational processes established in SSA 
policy for enrollment. Based on reasonable timeframes to accomplish 
these actions, it would not be feasible for an individual to gain 
entitlement to the Part B-ID benefit on the actual date that the 
individual begins the process of enrollment. Also, Medicare coverage 
across programs starts on the first of the month, and premiums are 
based on a whole month of enrollment.
    An eligible individual will be deemed to be enrolled in the Part B-
ID benefit if they complete a timely attestation prior to the end of 
their 36th month of Medicare coverage based on ESRD, which ensures that 
the individual has seamless coverage of immunosuppressive drugs. To 
clarify, eligible individuals will be able to start the enrollment 
process in late 2022, but the Part B-ID benefit will not be effective 
until January 1, 2023.
    A couple of commenters provided feedback on the proposed appeal and 
re-enrollment process for the Part B-ID benefit.
    Comment: A couple commenters supported that individuals should be 
afforded an appeal process if their enrollment in the Part B-ID benefit 
is denied or terminated. Commenters also supported the re-enrollment 
option for individuals that have, and then lose, other comprehensive 
coverage. A couple of commenters also supported that no late enrollment 
penalties would be assessed for re-enrollment.
    Response: We appreciate the support for our proposal to provide 
initial determination entitlement appeals upon denial of enrollment in 
or termination from the Part B-ID benefit. This ensures that the 
beneficiary's statutory and due process rights will be adequately 
protected. Also, we appreciate the support for our re-enrollment 
policy, as we understand that individuals can come in and out of health 
coverage during their lifetime. We agree that the re-enrollment option 
will provide a safety net for these important drugs, without the 
concern of a penalty, and we thank the commenters for their support of 
the late enrollment penalty policy.
    We received several comments asking for clarification as to what 
individuals or groups were eligible for the Part B-ID benefit. Those 
comments and responses are as follows.
    Comment: A commenter questioned whether CMS misinterpreted the 
statute with respect to the exception for eligibility under the new 
Part B in section 1836(b)(2) of the Act. The statute expressly provides 
that:
    (2) EXCEPTION IF OTHER COVERAGE IS AVAILABLE.--
    (A) IN GENERAL.--An individual described in paragraph (1) shall not 
be eligible for enrollment in the program for purposes of coverage 
described in such paragraph with respect to any period in which the 
individual, as determined in accordance with subparagraph (B)--
    (i) is enrolled in a group health plan or group or individual 
health insurance coverage, as such terms are defined in section 2791 of 
the Public Health Service Act;
    (ii) is enrolled for coverage under the TRICARE for Life program 
under section 1086(d) of title 10, United States Code;
    (iii) is enrolled under a State plan (or waiver of such plan) under 
title XIX and is eligible to receive benefits for immunosuppressive 
drugs described in this subsection under such plan (or such waiver);
    (iv) is enrolled under a State child health plan (or waiver of such 
plan) under title XXI and is eligible to receive benefits for such 
drugs under such plan (or such waiver); or
    (v)(I) is enrolled in the patient enrollment system of the 
Department of Veterans Affairs established and operated under section 
1705 of title 38, United States Code;
    (II) is not required to enroll under section 1705 of such title to 
receive immunosuppressive drugs described in this subsection; or
    (III) is otherwise eligible under a provision of title 38, United 
States Code, other than section 1710 of such title to receive 
immunosuppressive drugs described in this subsection.
    (B) ELIGIBILITY DETERMINATIONS.--
    (i) IN GENERAL.--The Secretary, in coordination with the 
Commissioner of Social Security, shall establish a process for 
determining whether an individual described in paragraph (1) who is to 
be enrolled or deemed to be enrolled in the medical insurance program 
described in such paragraph meets the requirements for such enrollment 
under this subsection, including the requirement that the individual 
not be enrolled in other coverage as described in subparagraph (A).
    The commenter suggested that, under our proposed interpretation, an 
individual would not be entitled to Part B-ID even if the excepted 
health plan did not expressly cover post-transplant immunosuppressive 
therapy. The commenter also suggested that the statutorily identified 
excepted plans may not be as robust as Medicare Part B-ID, but the 
individuals would still be precluded from enrolling in Part B-ID. The 
commenter stated that transplant recipients with coverage other than 
Title XIX would be disadvantaged. The commenter also stated that they 
doubted that is what Congress set out to do and requested that CMS 
reconsider its interpretation. Another commenter stated that, for other 
coverage to render a patient ineligible for the Part B-ID benefit, the 
``other'' coverage must cover immunosuppressive drugs.
    Response: We disagree with the commenter's suggestion that our 
interpretation of the statute is incorrect. We trust that our 
interpretation of the statute, as described in the proposed rule(87 FR 
25104), and in this final rule, is correct because it is consistent 
with

[[Page 66478]]

the plain language of the statute. If an individual has coverage that 
satisfies the conditions in section 1836(b)(2)(A)(1) of the Act, that 
individual is not eligible for enrollment in the Part B-ID benefit, 
even if the program does not expressly include coverage for 
immunosuppressive drugs. As we noted in the preamble to the proposed 
rule, only some of the programs identified in section 1836(b)(2)(A) of 
the Act expressly require that the patient have access to 
immunosuppressive drug coverage while other programs identified in 
section 1836(b)(2)(A) of the Act do not expressly require access to 
immunosuppressive drug coverage.
    Comment: Another commenter stated that the Part B-ID benefit was 
for individuals whose Medicare eligibility has terminated after a 
kidney transplant and who do not have other access to coverage of such 
medication.
    Response: The actual language of the statute is more precise than 
the commenter's general summary. To clarify, an individual's enrollment 
in any of the coverage specified under section 1836(b)(2)(A) of the Act 
would make the individual ineligible for the Part B-ID benefit.
    Comment: Several commenters questioned Part B-ID eligibility for 
other populations/groups such as those in Indian Health Service (IHS), 
those who receive State kidney disease financial assistance, and those 
enrolled in programs such as a Medicaid program with limited coverage 
(for example, mental health coverage only). Another commenter inquired 
if enrollment in a charity program (for example, manufacturer-based 
free drug programs) constitutes ``a program that covers 
immunosuppressive drugs'' and questioned if it would preclude 
eligibility for the new Part B-ID benefit.
    Response: As noted in the response to the previous comment, 
eligibility for the Part B-ID benefit is limited, but only individuals 
who are covered only under one of the express statutory provisions are 
excluded from eligibility. Generally, the programs that were identified 
by these commenters would not prevent an individual from enrolling in 
Part B-ID. Thus, if an individual only has coverage from the Indian 
Health Service (IHS), State kidney disease financial assistance, or 
charity/manufacturer assistance programs, the individual could still be 
eligible for Part B-ID. The same is true for an individual that is only 
eligible for restricted eligibility under Medicaid and CHIP, if the 
limited coverage does not make the individual eligible to receive 
benefits for immunosuppressive drugs.
    Comment: A commenter questioned if an individual is eligible for 
the Part B-ID benefit if they were not entitled to Medicare at the time 
of their kidney transplant.
    Response: Eligibility for the Part B-ID benefit in section 1836(b) 
does not depend on whether the individual was entitled to Medicare at 
the time of the kidney transplant. Instead, eligibility is based on 
whether the individual's Medicare coverage under Part A ended after the 
kidney transplant under section 226A(b)(2) of the Social Security Act.
    Comment: A commenter requested that CMS clarify the status of the 
Part B-ID benefit with regard to beneficiaries who received pre-emptive 
transplants.
    Response: An individual who has a pre-emptive kidney transplant, 
and meets the requirements for entitlement to Medicare Part A by reason 
of section 226A(b)(2),) of the Act, as outlined in at Sec.  406.13(c), 
and, whose entitlement to insurance benefits under Medicare Part A ends 
(whether before, on, or after January 1, 2023) by reason of section 
226A(b)(2) of the Act, would be eligible for Part B-ID, as long as they 
meet all other requirements for entitlement to the Part B-ID 
benefit.\19\
---------------------------------------------------------------------------

    \19\ According to Mayo Clinic, ``A preemptive kidney transplant 
is when you receive a kidney transplant before your kidney function 
deteriorates to the point of needing dialysis to replace the normal 
filtering function of the kidneys.''
    https://www.mayoclinic.org/tests-procedures/preemptive-kidney-transplant/pyc-20384830.
---------------------------------------------------------------------------

    Comment: A commenter questioned if MA plans will have any role in 
the coverage of Part B-ID benefits. The commenter stated it was unclear 
as to whether those ESRD-eligible beneficiaries who are enrolled in MA 
plans and who have no alternative sources of coverage will have the 
opportunity to remain enrolled in these plans past 36 months post-
transplant solely for the purpose of obtaining immunosuppressive drug 
coverage.
    Response: Individuals enrolled in MA plans are not eligible for the 
Part B-ID benefit. Individuals who have Medicare Part A and B, 
regardless of the basis for which they are entitled to Medicare 
coverage (age, disability, ESRD, etc.), can enroll in an MA plan. 
However, if an individual has Medicare based on ESRD, and that 
individual's Medicare entitlement ends the 36th month after the month 
in which they receive a kidney transplant, they no longer have Medicare 
Part A and B, and therefore, are not eligible to remain in the MA plan. 
Individuals who meet all of the requirements to enroll in the Part B-ID 
benefit are also not eligible to enroll in or receive immunosuppressive 
drugs from an MA plan.
3. Ensuring Coverage Under the Medicare Savings Programs
    The MSPs includes three primary \20\ Medicaid eligibility groups 
that cover the Medicare Part A and/or B premiums and sometimes cost 
sharing for over 10 million low-income individuals and are defined at 
sections 1905(p)(1) and 1902(a)(10)(E) of the Act. One MSP eligibility 
group is the Qualified Medicare Beneficiary (QMB) group, which provides 
medical assistance through coverage of Medicare Part A and B premiums 
and cost sharing for certain individuals that meet specific 
requirements. In general, the individual must have income that does not 
exceed 100 percent of the federal poverty line (FPL) and resources that 
do not exceed 3 times the limit for SSI with adjustments for inflation 
as described in section 1905(p)(1) of the Act. A second MSP eligibility 
group is the Specified Low-Income Medicare Beneficiary (SLMB) group, 
which provides medical assistance through coverage of Part B premiums 
for individuals who would otherwise be eligible in the QMB eligibility 
group, except that their income exceeds 100 percent of the FPL and is 
below 120 percent of the FPL as defined at section 1902(a)(10)(E)(iii) 
of the Act. A third MSP eligibility group is the Qualifying Individuals 
(QI) group, which provides medical assistance of coverage of Part B 
premiums for individuals who would otherwise be eligible in the QMB 
group, except that their income exceeds 120 percent of the FPL and is 
below 135 percent of the FPL as defined at section 1902(a)(10)(E)(iv) 
of the Act. Federal statute does not allow States to implement MSP 
eligibility criteria (that is, income and resource limits and 
methodologies) that are more restrictive than those federal baselines. 
However, through authority granted by section 1902(r)(2) of the Act, 
many States have elected to implement income and/or resource 
methodologies that are more generous than the federal baselines for 
QMB, SLMB, and QI.
---------------------------------------------------------------------------

    \20\ There is a fourth and much smaller MSP eligibility group 
that is the Qualified Disabled Working Individuals (QDWI) group, 
which provides medical assistance of coverage of Part A premiums for 
individuals who are entitled to Part A under section 1818A of the 
Act, and with income that does not exceed 200 percent of the FPL and 
whose resources do not exceed twice the maximum amount permitted 
under the SSI program. Section 402 of the CAA does not apply to 
QDWIs.
---------------------------------------------------------------------------

    As a result of changes made under section 402(f) of the CAA, low-
income individuals who are entitled to Medicare based on enrollment in 
the Part B-ID benefit may also be eligible

[[Page 66479]]

for enrollment in QMB, SLMB, or QI eligibility groups for payment of 
some or all of their Part B-ID benefit premiums and cost sharing.
    Section 402(f) of the CAA revised section 1905(p)(1)(A) of the Act 
to change the definition of QMB to allow for individuals enrolled in 
the Part B-ID benefit to be eligible for medical assistance through 
Medicare cost sharing as QMBs if they otherwise meet the income and 
resource limits established at 1905(p)(1)(B) and (C) of the Act. The 
CAA also made similar changes under section 1902(a)(10)(E)(iii) and 
(iv) of the Act to make medical assistance available for Medicare cost 
sharing for Part B-ID benefit enrollees who qualify for the SLMB and QI 
eligibility groups. These changes would allow individuals enrolled in 
the Part B-ID benefit to attain eligibility for these MSPs for payment 
of their Part B-ID benefit premium and cost sharing for QMBs, and for 
payment of their Part B-ID benefit premium as SLMBs and QIs, if such 
beneficiaries also meet the relevant income and resource criteria. We 
proposed to codify this expansion of MSPs to apply to the Part B-ID 
benefit at new Sec.  435.123.
    Under sections 1905(p)(1) and 1902(a)(10)(E) of the Act, as 
modified by section 402(f) of the CAA, individuals eligible for the 
Part B-ID benefit could become enrolled in MSPs for payment of the Part 
B-ID benefit (MSP Part B-ID) through two paths on or after January 1, 
2023. First, individuals could enroll in the Part B-ID benefit and 
newly apply for Medicaid and be determined eligible for the QMB, SLMB, 
or QI eligibility groups by their State. Second, individuals who are 
enrolled in an MSP eligibility group and whose Medicare eligibility is 
based on ESRD can transition to an MSP based on Part B-ID (MSP Part B-
ID) the month after 36 months after transplant if they enroll in the 
Part B-ID benefit under certain conditions. In order to transition to 
MSP Part B-ID under this latter condition, the individual must (a) 
provide an attestation to SSA to be deemed to enroll in the Part B-ID 
benefit by the end of the 36th month after the month in which they 
receive a kidney transplant in accordance with the attestation 
requirements in section 1836(b)(2)(B) of the Act and (b) continue to 
meet the other eligibility criteria for an MSP eligibility group 
described in section 1905(p)(1), 1902(a)(10)(E)(iii), or (iv) of the 
Act. We focused our discussion on the second path for MSP Part B-ID 
enrollment, noting our aim of promoting continuity of coverage for 
individuals who are enrolled in an MSP eligibility group and whose 
Medicare eligibility based on ESRD is ending and that multiple 
variables can affect whether an individual can seamlessly transition to 
the MSP Part B-ID benefit.
    In the proposed rule (87 FR 25107), we confirmed that loss of 
Medicare entitlement based on ESRD status constitutes a change in 
circumstances that may affect ongoing Medicaid eligibility. 
Accordingly, we stated that, under Sec.  435.916(d)(1), State Medicaid 
agencies are required to promptly redetermine an individual's 
eligibility for Medicaid whenever it receives information about an 
individual's loss of Medicare entitlement based on ESRD status.
    We explained that individuals who remain or are determined eligible 
for full-benefit Medicaid after this redetermination process would not 
be eligible for the Part B-ID benefit, because all States currently opt 
to cover immunosuppressive drug coverage for all full-benefit Medicaid 
eligibility groups and, by virtue of having such drug coverage under 
Medicaid, they would be ineligible according to section 
1836(b)(2)(A)(iii) of the Act.
    On the other hand, we explained that if the individual is not 
eligible for Medicaid on any basis, the State is required to screen the 
individual for potential eligibility for other insurance affordability 
programs as defined in Sec.  435.4 in accordance with Sec.  
435.1200(e), as required under Sec.  435.916(f). This would include 
referring the individual to an Exchange to determine whether the 
individual is eligible for enrollment in a Qualified Health Plan with 
advance premium tax credits (APTCs), cost sharing reductions (CSRs) or 
both as described in Sec.  435.4. We also encouraged States to inform 
individuals who do not qualify for full-benefit Medicaid or the 
Exchange with either APTCs or CSRs of the MSP Part B-ID benefit as part 
of the redetermination process. Specifically, States can refer 
individuals to engage with SSA, State Health Insurance Assistance 
Programs (SHIPs), and beneficiary advocacy groups, among others, to 
obtain information about the Part B-ID benefit.
    In order to prevent gaps in coverage of critical immunosuppressive 
medication when individuals transition off Medicare entitlement based 
on ESRD status, for partial-benefit Medicaid beneficiaries 
(beneficiaries enrolled in an MSP and not full-benefit Medicaid), we 
strongly recommended that States conduct early advance redeterminations 
under Sec.  435.916(d) before individuals' Medicare eligibility based 
on ESRD status ends. We anticipated this early redetermination process, 
along with planned CMS outreach efforts for beneficiaries and multiple 
external partners, would improve the customer service experience of 
kidney transplant recipients, consistent with the Executive Order on 
Transforming Federal Customer Experience and Service Delivery to 
Rebuild Trust in Government. We also stated our belief that these 
measures would have a positive health equity impact consistent with the 
Executive Order on Advancing Racial Equity and Support for Underserved 
Communities Through the Federal Government. Finally, by helping to 
avoid gaps in Medicaid and Marketplace coverage, we noted that these 
efforts are consistent with the Executive Order on Strengthening 
Medicaid and the Affordable Care Act.
    In general, individuals with ESRD are more likely to be from racial 
or ethnic minority groups.\21\ Additionally, individuals who are 
younger, poorer, and less educated have more difficulty affording 
transplant medication, which has led to lower rates of graft survival 
among those populations.\22\ Making immunosuppressive drugs more 
affordable to individuals through MSPs would improve lower income 
individuals' access to immunosuppressive drugs critical to prevent 
transplant failure. For a more comprehensive discussion of how the 
Medicaid redetermination process will operate for both full-benefit and 
partial-benefit Medicaid beneficiaries who have Medicare entitlement 
based on ESRD status and then lose full Medicare coverage, please see 
87 FR 25107 through 25110 in the proposed rule.
---------------------------------------------------------------------------

    \21\ See https://www.niddk.nih.gov/health-information/health-statistics/kidney-disease discussing that ESRD prevalence is about 
3.7 times greater in African Americans, 1.4 times greater in Native 
Americans, and 1.5 times greater in Asian Americans.
    \22\ Gordon, Elisa J., Prohaska, Thomas R., and Sehgal, Ashwin 
R. The Financial Impact of Immunosuppressant Expenses on New Kidney 
Transplant Recipients Clin Transplant 2008: 22, 736. Available at 
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2592494/.
---------------------------------------------------------------------------

    Additionally, we noted that if an individual who had MSP coverage 
while entitled to Medicare based on ESRD status fails to enroll in the 
Part B-ID benefit after losing Medicare entitlement based on ESRD 
status, by the end of the 36th month after the month in which the 
individual received a kidney transplant, the individual would also lose 
access to the MSPs after the State provides appropriate notice and fair 
hearing rights. However, we explained that an individual may re-apply 
for the MSPs if they later enroll in the Part B-ID benefit under 
section 402(f) of the CAA. We also noted that

[[Page 66480]]

if an individual did not previously enroll in an MSP while entitled to 
Medicare based on ESRD status, once they enroll in the Part B-ID 
benefit they may apply for and enroll in an MSP provided they meet the 
applicable eligibility criteria.
    We also noted that States would be required to enroll individuals 
in an MSP if they are enrolled in the Part B-ID benefit, apply for an 
MSP, and meet the income and resource requirements of an MSP. Finally, 
we stated that individuals enrolled in the Part B-ID benefit and an MSP 
would lose coverage under both programs if any of four conditions exist 
for the individual: (1) enrolls in other health insurance that makes 
them ineligible for the Part B-ID benefit as described in Sec.  
407.55(b); (2) becomes eligible for Medicare Part A on the basis of 
age, disability or ESRD status; (3) voluntarily terminates coverage; or 
(4) dies. For a more fulsome discussion of how individuals lose 
eligibility for MSP Part B-ID, see 87 FR 25109 through 25110 of the 
proposed rule.
    We received a number of comments on our proposals to implement MSP 
Part B-ID.
    Comment: Several commenters offered general support for our 
proposals to implement MSP Part B-ID. A few commenters thanked us for 
highlighting the Medicaid redetermination process and the critical role 
it will play in providing continuity of health coverage, including for 
children. Another commenter supported our efforts for making the Part 
B-ID benefit affordable through MSPs to individuals living in Medicaid 
non-expansion States.
    Response: We appreciate the support. As noted in the proposed rule 
at 87 FR 25125, we anticipate that most individuals who are eligible 
for MSPs and living in States that have opted to expand Medicaid would 
qualify for the adult group with full Medicaid benefits, including 
immunosuppressive drugs, and thus we focused our discussion on the MSP 
Part B-ID benefit for individuals who are eligible for MSP in non-
expansion States. We thank the commenters for supporting our efforts to 
ensure that individuals are aware both of more comprehensive coverage 
options and that individuals who are unable to afford the Part B-ID 
benefit are able to seek assistance with premiums and cost sharing 
through enrollment in the MSPs.
    Comment: In addition to the general comments on conducting 
education and outreach for the Part B-ID benefit, we describe and 
respond to in section II.B.5. of this rule, several commenters weighed 
in on conducting education and outreach specific to how the benefit 
intersects with Medicaid policy and processes. A commenter noted 
specific support for training Medicaid staff in addition to SHIPs, 
advocacy groups, providers and community organizations. Another 
commenter expressed support for our recommendation that States perform 
early Medicaid redeterminations for individuals who are partial-benefit 
dually eligible and losing Medicare entitlement based on ESRD. This 
commenter went on to suggest that CMS send States data on such 
individuals in advance of the termination from Medicare to facilitate 
early Medicaid redeterminations. A commenter suggested we educate 
transplant recipients and their providers about options for continuing 
coverage, including both the Medicaid redetermination process and 
subsidies available in the Marketplace. The commenter also stated that 
CMS could also do more than ``encourage'' States to inform 
beneficiaries about Part B-ID, by including it as part of their 
responsibilities under the Medicaid redetermination process at Sec.  
435.916. Another commenter recommended that CMS collaborate with SSA 
and other stakeholders in the transplant sector to help transplant 
recipients apply for Part B-ID prior to their loss of Medicare 
entitlement, thereby protecting their rights during the Medicaid 
redetermination process and MSP Part B-ID determination.
    Response: We appreciate the comments focused on outreach and 
educational efforts around how Medicaid intersects with Part B-ID. We 
intend to make educational materials available to Medicaid staff as 
well as advocacy and provider groups. We plan to send States 
information on individuals enrolled in MSPs before they lose 
entitlement to Medicare on the basis of ESRD in order to help States 
conduct early Medicaid redeterminations. We also plan to mail letters 
to all individuals losing Medicare on the basis of ESRD that describe 
their health coverage options and list contacts for assistance and 
additional information.
    Comment: Some commenters shared recommendations on operationalizing 
the MSP Part B-ID benefit, including the need: to ensure States, CMS 
and SSA can distinguish the limited Part B-ID benefit from full Part B 
benefits in the various data sources; for CMS to verify inactive 
Medicaid status for proper eligibility determinations and claims 
adjudication; and for CMS to issue guidance as quickly as possible 
given the tight implementation timeframes with the benefit.
    Response: We agree that it is very important to provide States 
timely operational guidance. We have already provided States 
preliminary operational guidance in advance of finalizing the rule and 
will be providing more details in the coming months.
    We have also been working with SSA over the past several months in 
order to ensure a smooth implementation of this benefit from an 
operational perspective. Among other tasks, we have worked on ways to 
identify the limited Part B-ID benefit from the full Part B benefits in 
various data sources and how to distinguish between premium and cost 
sharing payments for Part A and B benefits and MSP Part B-ID benefits 
to ensure proper payments.
    Comment: A commenter requested a delay in the implementation of the 
Part B-ID benefit until October 1, 2023 or, in the alternative, a 
waiver of implementation until October 1, 2023. The commenter described 
several competing system priority updates in the next calendar year and 
inability to add any new coverage group and benefit not already in its 
previously planned system updates until the end of 2023.
    Response: The CAA mandates that individuals can start signing up 
for the benefit on October 1, 2022 and that enrollment will begin on 
January 1, 2023.
    Therefore, we cannot delay the effective date of this benefit. 
There is also no provision in the CAA statute that would allow us to 
grant a waiver to a particular State to delay enrollment in the MSP 
Part B-ID benefit. However, States that are not able to accept new 
values in existing fields from SSA and CMS by the dates prescribed in 
statute can work with us to manually enroll and report individuals in 
the MSP Part B-ID benefit. We are available to provide technical 
assistance to States with either manual workarounds or interpreting 
buy-in data.
    Comment: A commenter expressed concern about inaccuracies in data 
exchanges between States and federal agencies regarding individuals' 
Part B-ID status at the start of the program. This commenter stated 
that there are currently challenges with the data exchange, especially 
for individuals in QMB and that adding Part B-ID data, particularly 
during a timeframe that is likely to overlap with the unwinding of the 
COVID-19 PHE, would create additional challenges.
    Response: We agree that it is important to ensure the accuracy of 
data exchanges between States and federal agencies for the MSP Part B-
ID benefit. As stated above, CMS has been working with SSA over the 
past several months

[[Page 66481]]

to ensure a smooth implementation of this benefit from an operational 
perspective and has already provided States some preliminary 
operational guidance. We will continue to make ourselves available to 
provide technical assistance to States as we move closer to the 
implementation date.
    Comment: A commenter inquired whether State Medicaid programs need 
to expand coverage for immunosuppressive drugs that may not be on a 
formulary for individuals with Medicaid who are enrolled in the Part B-
ID benefit.
    Response: We surmise the commenter is specifically referring to 
individuals who enroll in MSP Part B-ID as a QMB because States are not 
responsible for paying for Part B-ID cost sharing for individuals 
enrolled either as SLMB Part B-ID or QI Part B-ID. The Part B-ID 
benefit is a continuation of the Part B drug coverage for 
immunosuppressive drugs, and as such, will work the same way for QMBs 
as it does currently for Part B immunosuppressive drug benefits. This 
means that to the extent States do not cover a particular 
immunosuppressive drug on their formulary that is covered as part of 
the Part B-ID benefit, the State must cover the benefit and pay the 
Part B-ID cost sharing after Medicare has paid primary. As a QMB, the 
individual would also be protected from paying any Medicare cost 
sharing charges out-of-pocket for Medicare-covered immunosuppressive 
drugs.
    Comment: A commenter inquired when buy-in coverage should end for 
individuals enrolled in the new MSP Part B-ID eligibility groups who 
provide notice to SSA that they have other health insurance coverage. 
In particular, the commenter wanted to know whether State payment of 
the Part B-ID premiums should stop after a particular period of time or 
if buy-in should continue as long as CMS continues to bill States for 
the Part B-ID premiums. The commenter further requested that CMS 
clarify whether Part B-ID coverage continue to pay primary to other 
coverage until the Part B-ID benefit is terminated.
    Response: Under new Sec.  407.62(a)(1), if an individual notifies 
SSA they are enrolled in other coverage, their Part B-ID enrollment 
will end the first day of the month after the notification unless the 
individual requests and qualifies for a different prospective 
termination date. As long as an individual who reports other coverage 
continues to meet the other requirements for MSP Part B-ID, buy-in 
should continue until the individual is disenrolled from the Part B-ID 
benefit. For individuals enrolled in MSP Part B-ID, Medicare pays 
primary for Part B-ID until the individual is disenrolled from the Part 
B-ID benefit.
    Comment: A commenter inquired who is responsible for disenrolling 
individuals in Part B-ID once they receive other health insurance 
coverage. In particular, the commenter sought to know if it is the 
responsibility of SSA or the State Medicaid program to notify SSA of 
other health insurance coverage.
    Response: The CAA provides that individuals enrolled in certain 
other health coverage are not eligible for Part B-ID. As noted 
previously, new Sec.  407.57 would require that individuals enrolling 
in Part B-ID attest that they are not enrolled in certain other health 
coverage, do not expect to enroll in such coverage, and will notify SSA 
within 60 days of enrolling in other coverage. As such, the individual 
has the responsibility to notify SSA of other coverage and SSA receipt 
of this information will trigger termination of Part B-ID under new 
Sec.  407.62(a)(1). We encourage States to remind individuals to inform 
SSA as soon as possible, but no later than 60 days of enrolling in 
Medicaid.
    Comment: A commenter inquired whether dual eligible special needs 
plans (D-SNPs) will help with the coordination of Part B-ID benefits 
and help ensure continuity of immunosuppressive drug coverage for D-SNP 
enrollees.
    Response: A D-SNP is a type of Medicare Advantage (MA) plan. Under 
Sec.  422.52(b)(3) in order to be eligible for a special needs plan, an 
individual must meet the eligibility criteria for an MA plan, which 
requires an individual be entitled to Medicare Part A and enrolled in 
Medicare Part B under Sec.  422.50(a)(1). Because Part B-ID is a 
limited benefit that is distinct from Part B, an individual enrolled in 
the Part B-ID benefit would not be entitled to Medicare Part A or 
enrolled in Medicare Part B and would therefore, be ineligible for all 
MA plans, including a D-SNP. As such, they would have no role in 
coordination of benefits for Part B-ID. Moreover, any individual 
enrolled in a D-SNP would need to disenroll upon loss of Medicare 
entitlement based on ESRD. Similar to any other circumstance when 
individuals lose their entitlement to Medicare, we would expect the 
individual's D-SNP to inform them that they are ineligible for 
continuing D-SNP enrollment. Finally, individuals enrolled in MA plans 
are enrolled in Medicare Parts A and B, and are thus ineligible for the 
Part B-ID benefit. After considering the comments we received and for 
the reasons outlined in the proposed rule and our responses to 
comments, we are finalizing without modification our proposals to 
implement MSP Part B-ID.
4. Part B-ID Benefit Premiums
    The Secretary is required by section 1839 of the Act to announce 
the Part B monthly actuarial rates for aged and disabled beneficiaries. 
These amounts, according to actuarial estimates, will equal, 
respectively, one half of the expected average monthly cost of Part B 
for each aged enrollee (age 65 or over) and one half of the expected 
average monthly cost of Part B for each disabled enrollee (under age 
65). The standard monthly Part B premium represents roughly 25 percent 
of estimated program costs for aged enrollees and is calculated to be 
50 percent of this aged actuarial rate, plus the $3.00 repayment amount 
required under current law. (Although the costs to the program per 
disabled enrollee are different than for the aged, the statute provides 
that the two groups pay the same premium amount.) Premiums may be 
further adjusted based on an individual's conditions, such as based on 
late enrollment or reenrollment (Sec.  408.22), the income-related 
monthly adjustment amount (Sec.  408.28), or for beneficiaries subject 
to non-standard premiums (Sec.  408.20).
    We proposed to create a new paragraph Sec.  408.20(f) to implement 
the requirements established under section 1839(j) of the Act and 
propose to modify other existing requirements for Part B premiums found 
in 42 CFR part 408 as required by statute for the Part B-ID benefit. 
Specifically, we proposed the following:
     In Sec.  408.20(f)(1), we proposed that beginning in 2022, 
as required by new section 1839(j) of the Act, the Secretary would 
determine and promulgate a monthly premium rate in September of each 
year for the succeeding calendar year for individuals enrolled only in 
the Part B-ID benefit. Such premium would be equal to 15 percent of an 
actuarial rate that represents 100 percent of the estimated average 
monthly cost of Part B for each aged enrollee (age 65 or over). This 
amount is then rounded to the nearest $0.10.
     In Sec.  408.20(f)(2)(i), the Part B-ID benefit premium 
would be subject to adjustments specified in Sec. Sec.  408.20(e) 
(Nonstandard premiums for certain cases), 408.27 (Rounding the monthly 
premium), and 408.28 (Increased premiums due to the income-related 
monthly adjustment amount (IRMAA)).
     In section Sec.  408.20(f)(2)(ii), we proposed that 
premiums for the Part B-ID benefit would not be subject to

[[Page 66482]]

increased premiums for late enrollment or reenrollment under Sec.  
408.22.
     In Sec.  408.20(f)(3), we proposed that that the 
collection of premiums for the Part B-ID benefit would follow the 
existing requirements governing the collection of Part B premiums set 
out in Sec.  408.6 and part 408, subpart C of title 42.
    We received a comment on our proposals related to premiums for the 
Part B-ID benefit. The comment and our response follows:
    Comment: A commenter was concerned that the monthly premium for 
Part B-ID would be higher than the monthly premium for regular Part B.
    Response: To clarify, the monthly Part B-ID premium for 2023 will 
be $97.10. This is lower than the otherwise regular Part B premium. The 
CAA revised section 1839(j) of the Act to require that the Part B-ID 
premium should be equal to 15 percent of the monthly actuarial rate, 
that represents 100 percent of the estimated average cost of Part B for 
enrollees age 65 and over, for that succeeding calendar year. This 
amount is then rounded to the nearest $0.10.
5. Conforming Changes
    Certain individuals are entitled to hospital insurance coverage 
under Medicare Part A on the basis of ESRD, as provided under section 
226A of the Act. Section 406.13(f)(2) currently specifies that the 
period of entitlement to Medicare Part A for individuals whose Medicare 
entitlement is based on ESRD ends with the end of the 36th month after 
the month in which the individual has received a kidney transplant. We 
proposed to revise Sec.  406.13(f)(2) to provide that beginning January 
1, 2023, individuals no longer entitled to Part A benefits due to their 
coverage ending at the end of the 36th month after the month in which 
the individual received a kidney transplant, may be eligible to enroll 
in Part B solely for purposes of coverage of immunosuppressive drugs as 
described in Sec.  407.55.
    Medicare Part B covers health services including prescription drugs 
used in immunosuppressive therapy furnished to an individual who 
receives an organ transplant for which Medicare payment is made. 
Section 410.30(b) currently lays out the requirements governing 
eligibility for coverage of prescription drugs used in 
immunosuppressive therapy, stating that coverage is only available for 
prescription drugs used in immunosuppressive therapy, furnished to an 
individual who received an organ or tissue transplant for which 
Medicare payment is made, and provided the individual is eligible to 
receive Medicare Part B benefits. Chapter 15 of the Medicare 
Prescription Drug Benefit Policy Manual, section 50.5.1,\23\ lists some 
of the FDA-approved, specifically labeled immunosuppressive drugs. They 
are: Sandimmune (cyclosporine), Imuran (azathioprine), Atgam 
(antithymocyte globulin), Orthoclone OKT3 (Muromonab-CD3), Prograf 
(tacrolimus), Celicept (mycophenolate mefetil, Daclizumab (Zenapax); 
Cyclophosphamide (Cytoxan); Prednisone; and Prednosolone. However, this 
is not intended to be an all-inclusive list and is subject to change. 
The manual guidance states that CMS ``expects contractors to keep 
informed of FDA additions to the list of the immunosuppressive drugs.'' 
This expectation would carry over to the Part B-ID benefit. MACs have 
issued articles on this topic and, generally speaking, covered 
immunosuppressive drugs are oral tablets or capsules. However, certain 
immunosuppressive drugs may be intravenously infused or intramuscularly 
injected. The majority of the immunosuppressive drugs have generic 
equivalents; however, certain newer agents remain available as brand 
only.
---------------------------------------------------------------------------

    \23\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c15.pdf.
---------------------------------------------------------------------------

    Where the conditions require an infused or injectable 
immunosuppressive therapy, these would be administered in the physician 
office or outpatient setting. In this case of the Part B-ID benefit, 
only the cost of the drug would be covered (not the service of 
administration). Immunosuppressive therapies covered under Part B are 
paid based on pricing methodology in 1847A of the SSA (typically, this 
is an ASP-based payment limit). Payment limits for many 
immunosuppressive therapies can be found on the ASP Drug Pricing 
File,\24\ which is updated quarterly. Cost sharing is typically 20 
percent.
---------------------------------------------------------------------------

    \24\ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice.
---------------------------------------------------------------------------

    We proposed to revise Sec.  410.30(b) to specify that beginning 
January 1, 2023, individuals who meet the requirements as specified in 
section Sec.  407.55 are eligible to receive prescription drugs used in 
immunosuppressive therapy.
    An individual is eligible for enrollment into a Part D plan if 
certain conditions are met, as set out in section 1860D-1(a) of the 
Act. Section 423.30(a)(1)(i) of the regulations establishes that an 
individual is eligible for Part D if they are entitled to Medicare 
benefits under Part A or are enrolled in Medicare Part B. Section 
423.30(a)(1)(i) would be revised to specify that an individual is 
eligible for Part D if they are entitled to Medicare benefits under 
Part A or enrolled in Part B, but does not include an individual 
enrolled solely in Part B for coverage of immunosuppressive drugs under 
Sec.  407.1(a)(6).
    Section 402 of the CAA states that the Secretary may conduct public 
education activities to raise awareness of the availability of more 
comprehensive, individual health insurance coverage (as defined in 
section 2791 of the Public Health Service Act) for individuals eligible 
under section 1836(b) of the Act to enroll or to be deemed enrolled in 
the medical insurance program established under this part for purposes 
of coverage of immunosuppressive drugs.
    As a part of implementation, CMS will conduct education and 
outreach across the broad span of partners (that is, beneficiary 
advocacy groups, providers, associations, etc.) to ensure awareness and 
understanding of this benefit. Also, we note that all appropriate 
beneficiary notices, such as the Medicare based on ESRD pre-termination 
notice, (discussed in this final rule), the notice that will be 
provided to individuals who were previously terminated from Medicare 
based on ESRD to inform of the Part B-ID benefit, as well as the annual 
notice to individuals that have the Part B-ID benefit, will include 
information on the availability of, and contact information for, other 
comprehensive coverage that an individual may want to explore, such as 
Marketplace or Medicaid coverage. Additionally, as discussed in section 
II.B.3. of this final rule, we are encouraging States to provide 
education and assistance to individuals as part of the Medicaid 
redetermination process. We are also exploring steps to conduct 
outreach and education for beneficiaries and multiple external 
partners, including those who regularly assist beneficiaries with 
health insurance counseling, regarding the most appropriate coverage 
options for MSP beneficiaries transitioning off Medicare entitlement 
based on ESRD.
    A significant number of the comments we received on the proposed 
Part B-ID benefit were related to education and outreach efforts needed 
for successful implementation of the benefit. Those comments and our 
responses are as follows.
    Comment: Several commenters stated that education and outreach 
efforts were needed to educate beneficiaries, including advocacy groups 
and SHIPs, as well as States, medical providers, pharmacists, 
transplant centers, and ESRD Networks on the availability and

[[Page 66483]]

scope of this new benefit. A commenter stated that eligibility criteria 
will not be readily apparent to individuals, and another commenter 
stated that an effective education and outreach campaign will be 
critical to ensure individuals do not have gaps in coverage and 
understand their options for enrollment in the most comprehensive 
coverage that is available to them. Commenters suggested many forums 
and methods for messaging, including open forum calls to specifically 
address technical issues relating to the new Part B-ID benefit. Another 
commenter suggested that CMS create a detailed booklet (like Medicare & 
You) as well as a one-pager highlighting the essential details, and 
requested that CMS create streamlined/simple web-based education 
specific to the new Part B-ID coverage. A commenter stated that 
materials should address varying levels of health literacy for this 
vulnerable community, including pediatric-specific outreach materials.
    Several commenters welcomed the opportunity to engage with CMS and 
other stakeholders on informative notifications and outreach to 
affected beneficiaries. A commenter suggested that the ESRD Networks be 
consulted in the development and delivery of culturally and 
educationally appropriate information.
    Response: We thank the commenters for their feedback. We agree that 
education and outreach efforts should be wide-ranging, timely, and 
concise, and should be appropriate to inform all impacted stakeholders 
and beneficiaries. We appreciate the offer to assist us in developing 
and disseminating information on this important benefit change, and we 
will take all suggestions under advisement, including recommendations 
for messaging beneficiaries.
    To note, some of our education and outreach efforts will include, 
but may not be limited to, engaging CMS Regional Offices' Local 
Engagement & Administration (LEA) teams, communication leads, and CMS 
clinical arenas--in other words, this will be an all-hands-on-deck 
initiative. CMS also plans to educate Marketplace Assisters, 
Navigators, and Agent/Brokers who assist with Marketplace enrollment so 
they properly understand the Part B-ID benefit as they counsel 
individuals on more comprehensive coverage options. Coordination with 
HHS Administration for Community Living (ACL) and their grantees, such 
as the State Health Insurance Assistance Programs (SHIPs) will also be 
critical.
    Comment: Several commenters supported our proposed processes to 
notify beneficiaries of the Part B-ID benefit using the pre-termination 
notice issued by SSA. A commenter stated that information on the Part 
B-ID benefit, as well as information on other comprehensive coverage 
options, should be provided earlier in the process to raise awareness 
and give beneficiaries more time to consider their future coverage 
options and prepare for their health care needs after their 36-month 
post-transplant coverage ends. A commenter expressed that specific 
guidance be provided for those who will lose eligibility for MA 
coverage because they would no longer be entitled to Part A and 
enrolled in Part B. Another commenter stated that beneficiaries 
enrolled in MA Plans should receive the same information in their 
termination notices as the information made available to beneficiaries 
who are covered under Medicare Fee-for-Service (FFS).
    A couple commenters stated that they shared CMS' concern that 
individuals might mistake this coverage as equal or similar to 
comprehensive coverage under other parts of Medicare. They urged CMS to 
conduct consumer and community testing to evaluate whether such 
confusion is increased or decreased with different naming conventions 
and descriptive strategies. Specifically, they suggested testing naming 
designations that use more plain language and highlight the fact that 
the coverage is distinct from Part B by putting the modifying word or 
words before Part B in the name.
    Response: Beneficiaries are sent a pre-termination notice by SSA 
several months before the end of their Medicare entitlement. This pre-
termination notice will include notification that the beneficiary's 
Medicare based on ESRD is ending, other comprehensive coverage options 
that may be available, and availability of the Part B-ID benefit, 
including how to apply for the Part B-ID benefit and financial 
assistance available for the benefit. All beneficiaries whose Medicare 
based on ESRD is terminating 36 months after a kidney transplant, 
regardless of whether those beneficiaries are receiving their benefits 
through Original Medicare (FFS), or through an MA plan, will receive 
the same pre-termination notice from SSA. We note that individuals who 
enroll in Part B-ID benefit will be provided with a new Medicare card 
which will include the specific language that describes the benefit.
    We appreciate the support and feedback we have received from the 
commenters on our proposals related to eligibility, enrollment, 
effective dates of coverage, termination of, and premiums/cost sharing 
for the Part B-ID benefit. After review and consideration of all 
comments, we finalizing all of the Part B-ID benefit regulations as 
proposed with the exception of the attestation language at Sec.  
407.59. We will be finalizing that language to clarify that an 
individual must attest to SSA in either a verbal attestation, signed 
paper form provided by SSA, electronic submission, or fax, using 
procedures determined by SSA.

C. Proposal on Simplifying Regulations Related to Medicare Enrollment 
Forms (Sec.  406.7 and 407.11)

    We proposed to revise Sec. Sec.  406.7 and 407.11 to remove 
references to specific forms that are used to enroll in Medicare Part A 
and Part B, respectively. This is an administrative change that would 
simplify existing regulations and would have no impact on current 
eligibility requirements or enrollment processes or the use or 
availability of these forms. We proposed to continue to update our 
forms, including form numbers, and the conditions in which each form is 
used, through subregulatory guidance because these are procedural, and 
not substantive rules.
    Specifically, we proposed to revise Sec.  406.7 to provide that 
forms used to apply for Medicare entitlement are available free of 
charge by mail from CMS or at any Social Security branch or district 
office or online at the CMS and SSA websites. We also proposed to make 
technical edits to the text to state that an individual who files an 
application for monthly Social Security cash benefits as described in 
Sec.  400.200 to apply also applies for Medicare entitlement if he or 
she is eligible for hospital insurance at that time. Similarly, we also 
proposed to revise Sec.  407.11 to provide that forms used to apply for 
enrollment under the supplementary medical insurance program are 
available free of charge by mail from CMS, or at any Social Security 
branch or district office and online at the CMS and SSA websites. 
Lastly, we also proposed a technical change in the last paragraph of 
Sec.  406.7 to refer to ``monthly Social Security benefits'' instead of 
``monthly social benefits.''
    We received some comments on this proposal on Simplifying 
Regulations Related to Medicare Enrollment Forms. The comments and our 
responses follow.
    Comment: While most commenters were in support of the proposal to 
remove specific form references from

[[Page 66484]]

the regulation to allow future flexibility in updating, creating and 
removing forms, a commenter was not in support of this proposal because 
it will confuse beneficiaries and reduce the ability of some to make 
decisions that benefit them.
    Response: Removing the references of specific forms from the 
regulation text will not confuse beneficiaries nor will it have an 
adverse effect on a beneficiary's ability to make decisions. As 
written, the regulation describes the avenues in which a beneficiary 
can obtain the enrollment forms. Through any of these channels, the 
beneficiary will be clearly informed of which forms they need to make 
an enrollment. The forms are not changing as a result of our proposal, 
nor is the way the forms can be obtained. Removing the form references 
from regulation will allow CMS to make quick changes to the forms, as 
needed, which will in turn assist beneficiaries in having clear forms 
that present the information needed to make an informed enrollment 
decision.
    Comment: A few commenters provided recommendations related to 
Medicare enrollment forms, while still supporting the changes as 
proposed. A commenter recommended that CMS use the Health Plan 
Management System (HPMS) system to notify MA plans about any changes 
made to Part A and B enrollment forms, in addition to the Paperwork 
Reduction Act (PRA) information collection comment process. Another 
commenter recommended that CMS and SSA take this opportunity to create 
new forms that are easier to understand and to routinely make the forms 
available in multiple non-English languages and accessible formats.
    Response: As noted above, this would be an administrative change 
that would not affect the use and availability of enrollment forms, nor 
would it specifically result in the creation of new forms. If, in the 
future, forms are revised or created, they would have to go through the 
PRA approval process. In addition, as there are no operational changes 
resulting from this change, and a separate notification is not needed 
via HPMS.
    We thank the commenters for their feedback on this proposal. After 
consideration of the comments, we are moving forward with finalizing 
this proposal and removing the specific form references from 
regulation. This will allow us the opportunity to explore the suggested 
form updates provided here, as well as other suggested updates such as 
alternate formats and multiple languages in the future, in order to 
make impactful changes that will improve the beneficiary experience.

D. Modernizing State Payment of Medicare Premiums (Sec. Sec.  400.200, 
406.21, 406.26, 407.40 Through 407.48, 431.625, 435.4, 435.123 Through 
126)

    CMS seeks to modernize the Medicare Savings Programs (MSPs) through 
which States cover Medicare premiums and cost sharing. As part of these 
efforts, we proposed updating the various federal regulations that 
affect a State's payment of Medicare Part A and B premiums (also known 
as State buy-in) for beneficiaries enrolled in the MSPs and other 
Medicaid eligibility groups. The proposed rule included policy 
proposals based on program experience intended to modernize the State 
buy-in program and technical updates to reflect statutory changes over 
the last 3-plus decades. We also proposed to codify in the regulations 
certain administrative practices that have evolved over the years, 
clarify minimum requirements for the State payment of Medicare 
premiums, and present options for States to streamline eligibility and 
enrollment in the MSPs and other Medicaid eligibility groups.
    We proposed two major policy proposals: (1) replace decades-old 
stand-alone buy-in agreements by specifying that all provisions of the 
buy-in agreement are now set forth in the State's Medicaid State plan; 
and (2) limit State liability for retroactive Part B premiums for full-
benefit Medicaid beneficiaries under a buy-in agreement to a maximum of 
36 months prior to Medicare enrollment determination with a good cause 
exception. These changes will not limit access to benefits, create new 
liability, or cause other negative impacts for beneficiaries.
    With regard to the technical updates, we proposed updates to (1) 
Sec.  406.21 (individual enrollment), which was last revised in 1996; 
(2) Sec. Sec.  406.26 (enrollment under State buy-in), and 407.40 
through 48 (State buy-in agreements), which were last revised in 1991; 
\25\ (3) Sec.  431.625 (coordination of Medicaid with Medicare Part B), 
which was last revised in 1988; and (4) Sec.  400.200 (general 
definitions), which was last revised in 1983. These revisions would 
update the buy-in coverage groups, clarify beneficiary protections 
related to buy-in coverage groups and clarify populations for whom 
States can obtain federal financial participation. We also proposed to 
add new Sec. Sec.  435.123 through 435.126 and to revise Sec.  435.4 
(definitions and use of terms) to codify in CMS Medicaid regulations 
all MSPs under section 1902(a)(10)(E) of the Act.
---------------------------------------------------------------------------

    \25\ We note that CMS made a minor technical update to Sec.  
407.42 to remove the reference to the obsolete regulatory provision, 
Sec.  435.114 (Individuals Who Would Be Eligible for AFDC Except for 
Increased OASDI in the Income Under Pub. L. 92-336) in the November 
30, 2016 Federal Register (81 FR 86382), entitled ``Medicaid and 
Children's Health Insurance Programs: Eligibility Notices, Fair 
Hearing and Appeal Processes for Medicaid and Other Provisions 
Related to Eligibility and Enrollment for Medicaid and CHIP,'' 
(hereinafter referred to as the November 2016 final rule).
---------------------------------------------------------------------------

    We noted that these policies would improve the customer service 
experience of dually eligible beneficiaries as called for under 
Executive Order on Transforming Federal Customer Experience and Service 
Delivery to Rebuild Trust in Government. We anticipated our proposals 
would also advance health equity by improving low income individuals' 
access to continuous, affordable health coverage and use of needed 
health care consistent with Executive Order on Advancing Racial Equity 
and Support for Underserved Communities Through the Federal Government.
    We received multiple comments that were not tied to specific 
regulatory proposals.
    Comment: Many commenters expressed general support for updating the 
various regulations affecting the State payment of Medicare premiums. 
Some commenters noted that the proposals would provide additional 
clarity to States. Others noted that our proposals would expand access 
to the Medicare Savings Programs and improve their functionality.
    Response: We thank commenters for their support. The impact of 
State buy-in is significant for many beneficiaries. State buy-in 
provides individuals with extra money in their pocket each month (the 
standard Part B premium is $164.90 per month in 2023) and helps 
eligible individuals access the Medicare benefits to which they are 
entitled. We agree that our proposals would clarify requirements for 
States and promote access to affordable health coverage and essential 
medical treatment for underserved individuals.
    Comment: A commenter requested that CMS require States to accept 
and process MSP applications submitted by individuals during the first 
3 months of their initial enrollment period for premium Part A or Part 
B (that is, the 3 months prior to the month they first qualify for 
Medicare), provided the Social Security Administration has already 
determined them eligible for Medicare. The commenter contended that 
State practices to deny MSP applications submitted before the

[[Page 66485]]

individual is entitled to Part A or enrolled in Part B often result in 
an obligation to pay multiple months of premiums before their MSP 
coverage starts. According to the commenter, these upfront costs can 
prevent low-income individuals from accessing their Medicare benefits, 
lead individuals to delay needed health care, and cause genuine 
financial hardship.
    Response: Although we appreciate the commenter's perspectives on 
this issue, these comments are outside the scope of the proposed rule. 
As such, we do not address them in this final rule.
1. State Plan Amendment as Agreement Between State and CMS (Sec.  
407.40)
    Section 1843 of the Act provides for ``agreements'' between a State 
Medicaid agency and the Secretary to facilitate the payment of Part B 
premiums for Medicare-eligible Medicaid beneficiaries (``buy-in 
agreements''). All States currently have elected to enter into such 
agreements and process Part B premium payments as provided under 
section 1843. Under section 1818(g) of the Act, starting January 1, 
1990, States could expand their buy-in agreements to enroll Qualified 
Medicare Beneficiaries (QMBs) in premium Part A, with the State paying 
the Part A premiums on their behalf. As of the date of this final rule, 
36 States and the District of Columbia include the payment of Part A 
premiums for QMBs in their buy-in agreement (``Part A buy-in States''), 
but 14 States use the group payer arrangement to pay Part A on behalf 
of QMBs under Sec.  406.32(g) (``group payer States'').\26\
---------------------------------------------------------------------------

    \26\ The group payer arrangement allows certain parties (for 
example, States) to pay Part A premiums for a class of 
beneficiaries. See Program Operations Manual System (POMS) HI 
01001.230 Group Collection-General at https://policynet.ba.ssa.gov/poms.nsf/lnx/0601001230.
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    To execute agreements under section 1843 of the Act, the Secretary 
and States initially signed free-standing, written agreements that 
defined the then-scope of a State's buy-in agreement for Part B and 
bind the States to follow federal regulations and guidance under 
section 1843 of the Act. However, none of these original signed 
agreements have been updated for decades. In lieu of amending the 
decades-old free-standing written agreements, CMS and States have used 
Medicaid State plans and State plan amendments (SPAs) to document 
current State buy-in election choices and modifications. However, there 
are provisions in the free-standing buy-in agreements that are not 
reflected in these State plan provisions, and these non-current 
agreements have never officially been superseded. As such, for a 
complete picture of the full obligations a State has agreed to under 
section 1843, it is necessary to review both the free-standing 
agreement and deemed amendments to this agreement done through the SPA 
process. This is not an efficient or effective way to reflect the 
State's obligations under its buy-in agreement with CMS.
    As described in the April 2022 proposed rule (87 FR 25113 through 
25114), we proposed to use our authority under section 1902(a)(4) of 
the Act to amend the definition of a State buy-in agreement at Sec.  
407.40(b) by specifying that State plan provisions addressing what a 
State has agreed to under sections 1843 and 1818(g) of the Act 
constitute the State's buy-in agreement for purposes of those sections, 
including the scope of a State's buy-in practice, and that all aspects 
of a State's buy-in agreement with the Secretary, including what is set 
forth in the original buy-in agreements that is not currently in the 
State plan, should be set forth in the State's Medicaid State plan. We 
proposed that the State's submission of a SPA addressing what it is 
agreeing to under sections 1843 or 1818(g) of the Act or both, and 
CMS's approval, would thus constitute the ``agreement'' between the two 
parties for purposes of sections 1843 and 1818(g). We noted that this 
proposal codifies CMS' long-standing practice of effectuating changes 
in buy-in policy through the Medicaid State plans, rather than through 
the free-standing written agreements originally executed with each 
State. As a result, we stated that all free-standing buy-in agreements 
would be superseded by provisions related to buy-in practices within a 
State Medicaid plan.
    Further, because approved State plan provisions addressing what a 
State has agreed to under sections 1843 or 1818(g) or both would 
constitute the buy-in agreement referenced in those sections, and 
because there are existing mechanisms for both State modification or 
termination and CMS enforcement of State compliance, we also proposed 
to delete Sec.  407.45, which currently addresses a decision by a State 
to terminate its buy-in agreement, and CMS termination of a State's 
buy-in agreement for a State failure to comply with it.
    We received the following comments, and our responses follow.
    Comment: Several comments expressed support for our proposal to 
replace the old stand-alone agreements by specifying that the 
provisions of a State buy-in agreement shall be set forth in the State 
Medicaid plan. The Medicaid and CHIP Payment and Access Commission 
(MACPAC) noted this change codifies existing policies and helps to 
clarify State buy-in policies going forward. Other commenters indicated 
the provision would reduce administrative burden and improve 
efficiency. A commenter pointed out that this change would improve 
transparency, as SPAs are typically posted online while the stand-alone 
buy-in agreements are not.
    Response: We thank the commenters for their support and agree that 
retiring the stand-alone agreements and housing the state buy-in 
agreement in the State Medicaid plan would promote greater efficiency, 
clarity, transparency and accountability.
    Comment: A commenter contended that there is no place in the 
current State Medicaid plan that includes the State's buy-in agreement 
or that reflects the State's buy-in elections and requested that CMS 
specify whether we will issue a separate template in the State plan to 
describe State buy-in choices. Other commenters encouraged CMS to work 
actively with States to update their State plans, and proactively 
coordinate with all States that utilize a stand-alone agreement to 
prevent disruption to beneficiaries.
    Response: We thank the commenters for their perspectives and agree 
with the importance of avoiding ambiguity about the prevailing State 
buy-in elections in each state and preventing disruptions in buy-in 
coverage for individuals. We do not agree that the State Medicaid plan 
lacks provisions related to State buy-in practices. As noted in the 
proposed rule (87 FR 25112), Section 3.2 ``Coordination of Medicaid 
with Medicare and Other Insurance'' of the State Plan currently 
includes the State's selection for buy-in. Nonetheless, we anticipate 
revising the Medicaid State plan template material for States to make 
buy-in group elections, consistent with this final rule. We also plan 
to provide technical assistance to States on updating their State plans 
and retiring stand-alone buy-in agreements, as needed, with the goal of 
avoiding disruptions to State buy-in. Because the provisions related to 
State buy-in practices in the State Medicaid plan will supersede the 
free-standing buy-in agreements, the State Medicaid plan will bind 
States to follow regulations and guidance under sections 1843 and 
1818(g) of the Act.
    We did not receive comments on our proposed deletion of Sec.  
407.45.
    After considering the comments we received and for the reasons 
outlined in the proposed rule and our responses to comments, we are 
finalizing without modification our proposed amendments

[[Page 66486]]

to Sec.  407.40 and Sec.  407.45 specifying that State plan provisions 
addressing what a State has agreed to under sections 1843 and 1818(g) 
constitute the State's buy-in agreement.
2. Limiting State Liability for Retroactive Changes and Related Updates 
(Sec.  407.47)
    Under section 1843 of the Act, States must pay Part B premiums for 
any individual starting the first month they are both a member of the 
State buy-in coverage group specified in the buy-in agreement and 
eligible for Part B. In some instances, SSA determines Medicaid 
beneficiaries eligible for Medicare for a retroactive period. This 
generally occurs when an individual under age 65 who files a claim for 
disability benefits at SSA \27\ receives a favorable Social Security 
Disability Insurance (SSDI) award multiple years after the initial 
application, and SSA determines the individual eligible for SSDI 
benefits at or up to 12 months prior to the point of application, even 
though they were not able to receive SSDI payments timely because 
eligibility had not yet been determined. Individuals entitled to SSDI 
become entitled to premium-free Medicare Part A after 24 months of 
entitlement to SSDI, but in certain cases, an individual's favorable 
determination of SSDI is retroactive more than 24 months. In that case 
the determination of SSDI eligibility for a retroactive period for the 
individual means that the individual's premium-free Part A entitlement 
is retroactive as well. The individual is also retroactively eligible 
to enroll in Part B over this period.\28\
---------------------------------------------------------------------------

    \27\ When individuals file for disability benefits, SSA 
determines eligibility for both SSDI and supplemental security 
income (SSI). The same disability requirements apply to both 
programs, but other requirements differ. As a result, some 
individuals receive an SSI award while their SSDI claim or appeal is 
pending.
    \28\ SSA does not enroll the individual in Part B for the past 
months unless the individual pays SSA a lump sum amount reflecting 
the total costs of Part B premiums the individual would have paid 
had they been enrolled in Part B during that time or the individual 
is a member of the State buy-in coverage group.
---------------------------------------------------------------------------

    As described in the April 2022 proposed rule (87 FR 25113 through 
25114), retroactive Medicare Part A entitlement for a Medicaid-eligible 
individual can have multiple implications for State Medicaid agencies. 
First, States may, under their buy-in agreement, be liable for Medicare 
Part B premiums for the retroactive period. If a State learns that SSA 
established retroactive premium-free Medicare Part A entitlement for a 
member of a buy-in coverage group, the State must review the 
individual's eligibility for Part B buy-in over the retroactive period. 
Under section 1843(d)(2) of the Act and the current version of Sec.  
407.47(a), States must pay Medicare Part B premiums for individuals 
beginning the first month a Medicaid beneficiary is enrolled in 
Medicaid and qualifies for Medicare, with no limit on retroactivity. 
Second, when Medicare enrollment is established retroactively for 
Medicaid beneficiaries, the State must determine if it has already paid 
a Medicaid claim for the individual, because Medicare is the primary 
payer for dually eligible beneficiaries when services are covered by 
both programs. In this situation, under section 1902(a)(25)(B) of the 
Act and Sec.  433.139(d), the State must seek to recoup Medicaid 
payments to providers for any Medicare-covered services during the 
period of retroactive Medicare coverage, unless the State determines it 
is not cost-effective to do so. If Medicaid recoups funds paid to a 
provider, the provider may bill Medicare, which may require the 
provider to obtain an exception to Medicare's 1-year timely filing 
requirement as described in CMS guidance published in Pub. 100-04, 
Medicare Claims Processing Manual, Chapter 1, Section 70.7.3. However, 
the greater the length of time from the date of service, the more 
labor-intensive and administratively burdensome it is for the State to 
recoup Medicaid payments from providers, for the provider to submit a 
claim to Medicare, and for Medicare to process it.
    As discussed in the proposed rule (87 FR 25114 through 25115), 
under section 1843(d)(2) of the Act and the current version of Sec.  
407.47(g), States technically became liable for retroactive Part B 
premiums for such beneficiaries going many years back, starting the 
first month SSA retroactively established Part A entitlement, with no 
limit on this retroactivity.\29\ However, in implementing a court 
ruling in NY State v. Sebelius (N.D. NY, June 22, 2009), CMS adopted a 
policy under which it does not impose an obligation on States to make 
retroactive Part B premium payments when SSA operational and systems 
errors cause lengthy delays in SSDI awards and Medicare eligibility 
determinations for full-benefit Medicaid beneficiaries and the State 
cannot obtain the benefit of the Medicare coverage associated with the 
Part B premium payments the State would otherwise be obligated to make. 
In addition, CMS currently allows States to request relief on a case-
by-case basis from retroactive premiums for periods involving lengthy 
delays in Medicare determinations to the extent that such delays cover 
periods for which the State asserts it is too late to benefit from 
Medicare coverage. CMS considers the potential for beneficiary harm 
(liability for uncovered medical costs) and the State's recoupment 
policy (that is, time limits on State actions to recoup Medicaid 
payments from providers) as factors in assessing these State requests. 
Similar to the current policy, the proposed rule also ensures that 
beneficiaries are protected from uncovered medical costs by limiting 
the application to full-benefit Medicaid beneficiaries and granting a 
good cause exception if the beneficiary will be harmed, as discussed in 
87 FR 25115.
---------------------------------------------------------------------------

    \29\ In States with 1634 agreements (``1634 States''), SSA 
automatically qualifies individuals entitled to SSI for Medicaid 
and, once they qualify for Medicare, CMS automatically enrolls those 
individuals in Part B buy-in. In such States, the retroactive 
disability and Medicare determinations for the SDW individuals 
resulted in CMS billing for retroactive Part B premiums going back 
several years. States without 1634 agreements also owed Part B 
premiums for the individuals enrolled in SSI and Medicaid during 
past period, but CMS only billed the state after the State requested 
buy-in for these individuals.
---------------------------------------------------------------------------

    In the proposed rule (87 FR 25114 through 25115), we noted that 
rulemaking is warranted to ensure that the regulations reflect a clear 
and consistent policy, transparent to all States, on how CMS is 
addressing the equitable concerns addressed in the previously discussed 
court decision and subsequent CMS policy implementing it. Therefore, we 
proposed to add a new paragraph (f)(1) at Sec.  407.47 under which 
State liability for retroactive Medicare Part B premiums for full-
benefit \30\ Medicaid beneficiaries under a buy-in agreement would be 
limited to a period no greater than 36 months prior to the date of the 
Medicare enrollment determination. We noted that this proposed revision 
conceptually aligns with the 2009 court decision limiting State 
liability for retroactive Medicare Part B premiums for full-benefit 
Medicaid beneficiaries.
---------------------------------------------------------------------------

    \30\ ``Full-benefit'' Medicaid coverage, in the context of 
individuals who are considered dually eligible, generally refers to 
the package of services, beyond coverage for Medicare premiums and 
cost sharing, that certain individuals are entitled to under Sec.  
440.210 and Sec.  440.330.
---------------------------------------------------------------------------

    Based on the most recent CMS data, we estimate that out of an 
average of nearly 150,000 individuals who are newly enrolled in Part B 
buy-in each month, fewer than 750 Medicaid beneficiaries, or 0.5 
percent, require retroactive Part B buy-in for more than 36 months. (In 
a typical month, approximately 2,250 Medicaid

[[Page 66487]]

beneficiaries are retroactively enrolled in Part B buy-in for 12 months 
or more.)
    In the proposed rule (87 FR 25115), we anticipated that our 
proposal would reduce administrative burden on providers for 
beneficiaries with Medicare determinations more than 36 months in the 
past, by relieving providers of Medicaid recoupment activities States 
may find cost-effective to pursue and the need, therefore, to resubmit 
the claim to Medicare. Additionally, we noted that it would not create 
beneficiary liability since Medicaid would have covered any medical 
costs the beneficiary incurred, and absent State buy-in, the individual 
would not be enrolled in Part B and, therefore, would not owe any 
premiums for periods greater than 36 months in the past.
    Because this proposal reduces burden and promotes efficiencies, 
clarity and predictability for providers, States, and CMS, we found it 
consistent with the authority under section 1902(a)(4) of the Act for 
the Secretary to find methods of administration ``necessary for proper 
and efficient administration'' of the Medicaid program.
    Although we considered proposing limits on State premium liability 
for time periods longer or shorter than 36 months, including a range 
from 24 to 60 months, we proposed a 36-month limit for two primary 
reasons. First, we stated our belief that Medicaid Management 
Information Systems (MMIS) would still have Medicaid claims data for 
dates of service going back at least 36 months. Second, we maintained 
that the length of time in our proposal is consistent with section 
1902(a)(25)(I)(iv) of the Act, under which States must require health 
insurers, including Parts C and D plans, to accept claims submitted by 
the State within a minimum of 3 years from the date of service.
    As discussed in the proposed rule (87 FR 25115), our proposal to 
limit State liability for retroactive Part B premiums applies only when 
Medicaid beneficiaries receive retroactive SSDI and Medicare 
eligibility determinations from SSA, not when Medicare entitlement 
delays stem solely from federal buy-in system errors or delays. Under 
section 1837(h) of the Act, the Secretary has discretion to grant 
relief to correct or eliminate the effects of such errors or inaction. 
Our proposal also does not address enrollment delays which can affect 
all members of a State buy-in coverage group, including individuals 
enrolled in partial-benefit Medicaid. The existing process for these 
cases allows the Secretary to consider the conditions of each case, and 
avoid harm to the beneficiaries.
    We requested comment on our proposed 36-month limit, including how 
it compares with State Medicaid recoupment time-limits, or on 
alternative options to balance accuracy and burden. We also proposed a 
``good cause'' exception to the 36-month limit in proposed paragraph 
(f)(2). This proposed provision would allow an exception for 
retroactive periods of more or less than 36 months if a currently 
unforeseen situation arises in which application of the proposed 
paragraph (f)(1) would result in harm to a beneficiary. In evaluating 
the good cause exception, the primary consideration would be whether 
the beneficiary has unpaid medical bills and needs Medicare coverage 
during the retroactive period for unpaid medical bills. We noted that 
new paragraph (f)(2) would also allow CMS to provide relief to States 
for periods of less than 36 months if we determine the State could not 
benefit from Medicare and limiting State liability would not result in 
harm to the beneficiary.
    We received the following comments, and our responses follow.
    Comment: Many commenters expressed general support for our proposal 
to limit State buy-in liability for the retroactive periods greater 
than 36 months. A commenter noted that it would reduce administrative 
burdens for States and providers without negatively impacting access to 
care for beneficiaries. MACPAC stated that the 36-month limit is in 
line with previous MACPAC recommendations for Medicaid program 
integrity efforts to make efficient use of federal resources and to 
minimize undue burden on States or providers. Some commenters supported 
the 36-month limit on retroactive liability in light of its inclusion 
of a ``good cause'' exception to allow for retroactive periods of more 
or less than 36 months. A commenter explained that an exception to 
cover a period exceeding 36 months may be needed on the rare instance 
that a beneficiary receives care from a non-Medicaid provider who 
accepts Medicare during an earlier period and needs Medicare coverage 
to address an outstanding medical debt incurred. Another commenter 
supported the ability for States to request relief for periods of less 
than 36 months if CMS determines the State cannot benefit from Medicare 
and limiting State liability would not result in harm to the 
beneficiary.
    Response: We appreciate the widespread support for our proposal. 
The comments bolster our belief that this change would reduce 
unnecessary burden on providers and help State Medicaid programs run 
more efficiently without negative impact for beneficiaries. We agree 
with the need for the good cause exception to address rare cases in 
which a Medicaid beneficiary needs Medicare coverage to pay for care 
that Medicaid does not cover during a period further than 36 months in 
the past. We also concur that the 36-month limit strikes the right 
balance between payment accuracy and efficiency while the good cause 
exception provides CMS the flexibility to provide relief to States for 
periods of less than 36 months if we find that Medicare was unavailable 
during that time and the beneficiary would not be harmed.
    Comment: A commenter asserted that the holding of the court in NY 
State v. Sebelius resulted in a 24-month retroactive buy-in limit in a 
particular State and questioned whether our proposal in the proposed 
rule would change the State's current 24-month limit. The commenter 
also questioned whether under our proposal, a State Medicaid program is 
only required to pay the premium for the retroactive period if there is 
a benefit to both the State and the beneficiary, and not necessarily 
back to when the beneficiary is entitled to Part A.
    Response: We thank the commenter for the feedback, but we do not 
agree that the federal court ruling required a blanket 24-month 
retroactive limit in any particular State. In our implementation of the 
court's ruling, CMS began granting States' requests for relief, on a 
case-by-case basis, from retroactive premiums that cover periods for 
which the State contends it is too late to benefit from Medicare 
coverage. In assessing these State requests, CMS has considered the 
potential for beneficiary harm and the State's recoupment policy. We 
clarify, that under the good cause exception in new Sec.  407.47(f)(2), 
we would grant a request for a retroactive limit of 24 months if we 
conclude that Medicare is unavailable beyond that period (for example, 
the State has a recoupment policy of 24 months) and the beneficiary 
would not be harmed. Absent approval of a good cause exception, the 36-
limit would apply in all States.
    Comment: Some commenters expressed support for this policy, but 
requested clarification on CMS' intention to reject buy-in records from 
beyond 36 months in the past. A few commenters noted the likely need 
for States to alter their own buy-in systems to refrain from submitting 
records from periods prior to 36 months.
    Response: We appreciate the commenters' request for clarification 
on

[[Page 66488]]

the State and system changes required for this provision. We are still 
exploring these questions and the best ways to operationalize our 
proposal. Therefore, we are modifying the provision's effective date to 
January 1, 2024. This modification will provide additional time for CMS 
to explore and account for any State impacts and afford States a more 
reasonable timeline to implement systems changes should they prove 
necessary amidst competing systems priorities (for example, related to 
Part B-ID implementation and the unwinding of the COVID-19 PHE). This 
delay will not harm States and beneficiaries since CMS has an existing 
process to grant State requests for relief on a case-by-case basis when 
a beneficiary would not be harmed.
    Comment: A few commenters pointed out situations in which a State 
may still have retroactive State buy-in liability for a period beyond 
36 months. A commenter stated that retroactive limits should not apply 
to cases of Medicaid beneficiaries who were enrolled in Medicare but 
were improperly excluded from buy-in and need retroactive buy-in to 
rectify the missing period. Another commenter noted States may be 
required to pay retroactive premiums for periods greater than 36 months 
in situations in which an individual loses Medicaid coverage, later 
enrolls in Medicare, and subsequently regains Medicaid eligibility with 
a retroactive start date that overlaps with the previous Medicaid 
termination date. The commenter stated that the new proposed SEP 
following the loss of Medicaid coverage described in section A.2.D of 
the April 2022 proposed rule could increase the incidence of these 
cases.
    Response: The first example above appears to describe a situation 
in which a clerical or other error prevented an individual from being 
enrolled in buy-in for the entire period the individual was eligible 
for buy-in. We agree that in this situation, the State would need to 
buy-in for the missing period of coverage to correct the buy-in 
coverage period. As such, this situation would be outside our proposed 
provision limiting retroactive Part B premium liability for periods 
exceeding 36 months. Similarly, we concur that our proposal does not 
limit buy-in liability in the second example described above, as the 
second example seems to describe past buy-in liability for individuals 
who are retroactively re-enrolled in Medicaid after they enrolled in 
Medicare whereas our proposal involves individuals who are still 
eligible for Medicaid when they become retroactively entitled to 
Medicare. Our proposal does not address this situation, but we will 
consider future rulemaking to limit State liability for retroactive 
periods in other situations based on program experience.
    Comment: A commenter requested clarification on whether the new 
retroactivity limit in Sec.  407.47(f) would supersede existing 
provisions in Sec.  407.47(c), which requires States to pay Medicare 
premiums for individuals the first month they are a member of the buy-
in coverage group and eligible for Part B.
    Response: We thank the commenter for their question. We clarify 
that the retroactivity provisions in paragraph (f) are exceptions to 
the general rules laid out in paragraphs (b), (c), and (d). To 
alleviate confusion, we are revising our proposed regulatory text in 
this regard. We are also correcting obsolete cross-references to Sec.  
407.42 in those three paragraphs to align with our proposed amendments 
to that section described in section II.D.3.e. of this final rule.
    In our proposed rule (87 FR 25115), we further proposed modifying 
Sec.  407.47(a) to clarify our current requirement that States consider 
all bases of membership in the buy-in coverage group to determine the 
start date of buy-in. Under section 1843(d)(2) of the Act and Sec.  
407.47(a), the beginning of an individual's buy-in coverage period 
depends on the type of medical assistance they receive under the 
Medicaid State plan. Many individuals who qualify as a QMB or a SLMB 
also qualify under separate Medicaid eligibility groups. If a State 
determines that an individual is eligible for the QMB eligibility group 
and a separate Medicaid eligibility group, the individual may first 
become designated as a member of the buy-in coverage group 
corresponding to the non-QMB Medicaid eligibility group under which the 
individual is determined eligible, based on the effective date of such 
eligibility before they qualify for the buy-in coverage group 
corresponding to the QMB eligibility group. To determine the start date 
of the buy-in coverage period, our proposal clarifies at paragraph 
(a)(2) that the State must consider the earlier of the buy-in effective 
dates for the applicable group.
    As discussed in the proposed rule (87 FR 25115 through 25116), we 
anticipated that our proposal on the effective date of buy-in coverage 
for individuals who qualify for the buy-in coverage group upon multiple 
bases would provide greater transparency and certainty to States and 
beneficiaries, and address confusion about existing requirements. We 
did not receive comments on our proposed clarification of current 
requirements under Sec.  407.47(a).
    In the proposed rule (87 FR 25122), we discussed our consideration 
of revisions to Sec.  406.26 and Sec.  407.40 to remove premium 
liability for States in other situations in which Medicare benefits are 
not available. The 2009 decision in NY v. Sebelius enjoined CMS from 
billing New York during periods of retroactive Medicare eligibility in 
which the State would not benefit from Medicare (that is, it was too 
late for Medicare benefits to be provided). We cited our belief that 
there may be similar situations in which Medicare eligibility can be 
established but Medicare benefits would not be provided. For example, 
individuals who are incarcerated or residing overseas may still retain 
entitlement to Medicare but be ineligible for payment for services 
because of their status.
    We requested comment on the implications of limiting liability for 
States because Medicare is unavailable in these two examples or any 
others.
    We received the following comments, and our responses follow.
    Comment: Several commenters expressed support for removing Medicare 
payment responsibility from State Medicaid programs for individuals who 
are incarcerated as defined under the Medicare regulations at Sec.  
411.4(b). They noted that CMS encourages States to suspend Medicaid 
coverage during incarceration to facilitate the timely restart of 
Medicaid coverage upon release, easing burdens on both the State and 
the individual. However, these commenters contended that because States 
must still pay Medicare premiums for individuals with suspended 
Medicaid status, States have financial incentives to terminate rather 
than suspend Medicaid for dually eligible individuals who are 
incarcerated. A commenter also pointed out that limiting State premium 
liability for dually eligible beneficiaries, including those with 
suspended Medicaid status, comports with a federal interagency 
commitment to reduce barriers to reentry and ensure than individuals 
returning to the community do not experience gaps in health coverage.
    Response: We thank the commenters for their perspectives. We agree 
with the need to remove disincentives to Medicaid suspension policies, 
which improve administrative efficiency and mitigate coverage gaps for 
individuals exiting the penal system. However, we do not include a 
provision to limit premium liability during incarceration in this final 
rule given the complicated operational, legal, and systems issues

[[Page 66489]]

involved and the need to obtain input from stakeholders on these 
matters, including through notice and comment rulemaking. However, we 
will consider these comments in the development of future rulemaking.
    Comment: A commenter expressed concern with removing State 
liability for Medicare premiums while individuals are incarcerated, 
noting that Medicare may currently pay for services provided to inmates 
in cases where State or local law requires those individuals or groups 
of individuals to repay the cost of medical services they receive while 
in custody under Sec.  411.4(b). The commenter contended that removing 
State liability for buy-in during periods of incarceration in States 
that require individuals to repay the cost of medical after release 
would impose significant financial burden on individuals post-release 
and requested that CMS create an exception for these instances.
    Response: We thank the commenter for raising the possible negative 
consequences of limiting buy-in liability during incarceration due to 
this exception to the Medicare exclusion of payment under Sec.  
411.4(b). While we are not finalizing any such proposal at this time, 
we will consider the commenter's input for future rulemaking.
    Comment: A commenter noted their general support for suspending 
premium liability when Medicare is unavailable because the beneficiary 
is overseas.
    Response: We thank the commenter for their input, but do not 
include a provision to limit premium liability for overseas individuals 
in this final rule given the complicated operational, legal, and 
systems issues involved and the need to obtain input from stakeholders 
on these matters, including through notice and comment rulemaking.
    After considering the comments we received and for the reasons 
outlined in the proposed rule and our responses to comments, we are 
finalizing our proposal at Sec.  407.47 with two modifications. First, 
we are making the 36-month limit on State retroactive liability and 
good cause exception effective January 1, 2024. Second, we are 
finalizing technical corrections to the regulation text originally 
proposed to clearly designate the new retroactivity limit in Sec.  
407.47(f) as an exception to the general rules described in paragraphs 
(b), (c), and (d) in that section and to remove outdated cross-
references to other sections.
3. Technical Changes to Regulations on State Payment of Medicare 
Premiums
a. Revisions to General Definitions (Sec.  400.200)
    Section 400.200 includes general definitions applicable to chapter 
IV of Title 42. In the proposed rule (87 FR 25116), we proposed to 
amend Medicaid regulations to add a new definition of the Medicare 
Savings Programs and to codify the Qualified Medicare Beneficiary 
(QMB), Specified Low Income Beneficiary (SLMB), Qualifying Individuals 
(QI), and Qualified Disabled Working Individual (QDWI) eligibility 
groups for the first time since their enactment. As such, we proposed 
to replace the existing definitions of QMB and QDWI in Sec.  400.200 
with streamlined references to the proposed new QMB definition in Sec.  
435.123 and the proposed new QDWI definition in Sec.  435.126, 
respectively. We also proposed to add definitions for the Medicare 
Savings Programs, SLMB, and QI in Sec.  400.200 that reference the 
corresponding proposals defining the Medicare Savings Programs in Sec.  
435.4 and the proposed codification of SLMB in Sec.  435.124 and QI in 
Sec.  435.125. We anticipated that the proposals in Sec.  400.200, and 
related proposals in Part 435, would bring the regulations in 
conformance with existing statute and policy and promote consistency 
and clarity for States.
    We did not receive comments on our proposed revisions and additions 
to the definitions in Sec.  400.200.
b. Revisions to Individual Enrollment (Sec.  406.21)
    Paragraph (a) of Sec.  406.21 describes basic limitations on the 
timing of enrollment in Medicare Part A, in which an individual 
eligible for Part A may only enroll during his or her IEP, a GEP, an 
SEP, or, for Health Maintenance Organization/Competitive Medical Plan 
(HMO/CMP) enrollees, a transfer enrollment period, as set forth in 
paragraphs (b) through (f). At 87 FR 25116, we proposed to modify 
paragraph (a) to specify that such Medicare enrollment periods do not 
apply to individuals enrolling in Part A through a buy-in agreement, as 
defined in Sec.  407.40. We noted that the provision would codify long-
standing policy that QMB-eligible individuals may enroll in Part A at 
any time of year, without regard to the enrollment periods currently 
specified in paragraph (a).
    We received the following comment, and our response follows.
    Comment: A commenter expressed appreciation for this update and the 
clarity of the proposed revisions, due to confusion at the State level 
about some of the details in these regulations.
    Response: We thank the commenter for their support and anticipate 
that this provision will enhance clarity and accountability.
c. Revisions to Enrollment Under State Buy-In (Sec.  406.26)
    Section 406.26 describes enrollment in Medicare Part A through the 
buy-in process. In the proposed rule at 87 FR 25116, we proposed to add 
a new paragraph (a)(3) to codify long-standing policy against 
discrimination in the enrollment process, specifying that States with a 
buy-in agreement in effect must enroll any applicant who meets the 
eligibility requirements for the QMB eligibility group, with the State 
paying the premiums on the individual's behalf. We noted that, 
consistent with current policy, this provision prohibits States from 
applying a cost-effectiveness test to choose which individuals to 
enroll in QMB. We also proposed amending paragraph (b)(2) to clarify 
that, under a buy-in agreement, as defined in Sec.  407.40, QMB-
eligible individuals can enroll in premium hospital insurance (that is, 
premium Part A) at any time of the year, without regard to Medicare 
enrollment periods. As discussed in the proposed rule at 87 FR 25116, 
this proposal would codify long-standing policy.
    We received the following comment, and our response follows.
    Comment: A commenter expressed appreciation for this update, and 
the clarity of the proposed revisions, due to confusion at the State 
level about some of the details in these regulations.
    Response: We thank the commenter for their support and anticipate 
that this provision will enhance clarity and accountability.
d. Revisions to Enrollment Under a State Buy-In Agreement (Sec.  
407.40)
    In our proposed rule at 87 FR 25116, we included a series of 
revisions to Sec.  407.40 to reflect statutory updates and codify 
agency practices related to buy-in agreements.
    In Sec.  407.40(a), which describes pertinent legislative history 
on the State buy-in agreements, we proposed to add new paragraphs 
(a)(6) through (a)(9) to cover other statutory changes since Sec.  
407.40 was last updated in 1991.
    In Sec.  407.40(b), which defines terms related to buy-in 
agreements, we proposed several changes. First, we proposed to replace 
the term ``section'' with the term ``subpart C'' because terms defined 
here appear throughout this subpart, not only in Sec.  407.40.

[[Page 66490]]

    Second, we proposed to revise the definition for aid to families 
with dependent children (AFDC) because some Medicaid eligibility groups 
remain tied to AFDC, as that program existed as of July 16, 1996, prior 
to its elimination.
    Third, we proposed to remove the definition of ``Qualified Medicare 
Beneficiary'' because the term is already defined in Sec.  400.200.
    Fourth, we proposed to revise the definition of State buy-in 
agreement, as discussed in detail in 87 FR 25112 through 25113 of the 
proposed rule.
    Fifth, we proposed to add a definition of a ``1634 State'' to mean 
a State that has an agreement with SSA, in accordance with section 1634 
of the Act, for SSA to determine Medicaid eligibility on behalf of the 
State for individuals residing in the State whom SSA has determined 
eligible for SSI.
    Sixth, we proposed to add a definition of buy-in coverage group to 
mean a coverage group described in section 1843 of the Act that is 
identified by the State and is composed of multiple Medicaid 
eligibility groups specified in the buy-in agreement.
    In Sec.  407.40(c), which describes basic rules for enrollment 
under buy-in agreements, we proposed to revise paragraph (c)(1) to 
clarify that States with buy-in agreements in effect must enroll any 
individual who is eligible to enroll in Part B under Sec.  407.10 and 
who is a member of the buy-in coverage group, with the State paying the 
premiums on the individual's behalf. We noted this change aligns with 
the newly proposed Sec.  406.26(a)(3), which we discussed earlier in 
this final rule. Additionally, we proposed new text to clarify that 
States initiate buy-in for eligible individuals who are enrolled in the 
buy-in coverage group at any time of the year, without regard to 
Medicare enrollment periods. We explained that if a member of a buy-in 
coverage group is already enrolled in either Medicare Part A or B, the 
State will directly enroll the individual in buy-in and refrain from 
referring the individual to SSA to apply for Medicare.
    We also proposed to add a new paragraph, at Sec.  407.40(c)(5), 
which was incorrectly identified as Sec.  407.40(c)(4) in the NPRM, to 
reflect that in a 1634 State, CMS will initiate, on behalf of the 
State, Part B buy-in for individuals receiving SSI. We proposed to 
codify this policy to clarify that all States must ensure that buy-in 
is initiated, as this current policy has been inconsistently applied in 
some States.
    Finally, we proposed to add another new paragraph, at Sec.  
407.40(c)(6), which was incorrectly identified as Sec.  407.40(c)(5) in 
the NPRM, to codify a requirement that premiums paid under a buy-in 
agreement are not subject to increase because of late enrollment or 
reenrollment.
    We received comments on our proposed revisions and additions to 
enrollment regulations pursuant to a State buy-in agreement in Sec.  
407.40.
    Comment: Some commenters supported our proposal because it codifies 
the policy that people with QI, like those with QMB and SLMB, may 
enroll in Part B under a buy-in agreement outside of Medicare 
enrollment periods.
    Response: We thank the commenters for their support. As stated 
previously, we anticipate updating these regulations to reflect current 
policy and statute will enhance clarity and accountability and promote 
access to buy-in coverage.
e. Revisions to Buy-in Coverage Groups Available for Part B (Sec.  
407.42)
    Section 407.42 describes the Part B-related buy-in coverage groups 
authorized under section 1843(b) through (g) of the Act for the 50 
States, the District of Columbia, and the Northern Mariana Islands. It 
appears that all States except one have elected the option under 
current paragraph (a) to cover individuals who are deemed recipients of 
the former AFDC program as cash assistance recipients for buy-in. As 
described at 87 FR 25117 through 25118 of the proposed rule, although 
we also consider individuals eligible under section 1931 of the Act to 
be deemed recipients of the former AFDC program, we have not previously 
identified such individuals as optional deemed cash recipients for the 
purposes of buy-in. Therefore, we clarified that individuals eligible 
under section 1931 of the Act are optional deemed recipients of cash 
assistance for the purposes of buy-in based on their classification as 
deemed recipients of AFDC. As such, we proposed allowing States to 
designate all deemed recipients of AFDC (that is, both children 
eligible based on title IV-E and individuals covered under section 1931 
of the Act) as cash assistance recipients with eligibility groups 
related to SSI/SSP, or to only cover individuals who receive or are 
deemed to receive SSI/SSP as cash assistance recipients for buy-in.
    As discussed in the proposed rule (87 FR 25117 through 25118), 
Sec.  407.42 has been a source of confusion for States and other 
stakeholders. We anticipate that replacing it with a streamlined 
listing of the buy-in coverage groups, together with their underlying 
eligibility groups, is more readily understandable for all parties. 
First, we proposed replacing the existing regulation text in paragraph 
(a) with a general requirement that States must select one of the buy-
in coverage groups listed in paragraph (b). We then proposed modifying 
the remaining buy-in coverage groups in paragraph (b) together with the 
eligibility groups they contain.
    The modified buy-in coverage groups we proposed in paragraph (b) 
are as follows:
     Group 1: Individuals who are categorically eligible for 
Medicaid and:
    ++ Receive or are deemed to receive SSI or State supplemental 
payments (SSP), or both; and
    ++ At State option, individuals described in section 1931 of the 
Act or children with adoption assistance, foster care, or guardianship 
care under title IV-E.
     Group 2: All individuals described in Group 1 and three 
MSP eligibility groups (QMB, SLMB, and QI).
     Group 3: All Medicaid eligibility groups (that is, all 
individuals eligible for Medicaid).
    We received the following comments, and our responses follow.
    Comment: A commenter requested an explanation on why CMS is now 
proposing to require that States include individuals covered under 
section 1931 of the Act and the Temporary Assistance for Needy Families 
(TANF) program as deemed cash recipients for the purposes of buy-in. 
The commenter noted that when the AFDC program was eliminated in 1997, 
CMS told States that members of the TANF population were not considered 
cash assistance recipients for the purposes of buy-in. The commenter 
also questioned if CMS would allow enhanced FMAP for States to change 
their systems to include this population in buy-in.
    Response: We acknowledge the commenter's concerns but clarify that 
we are not proposing to add, as an independent buy-in coverage group, 
recipients of the TANF program under Sec.  407.42. As indicated in the 
proposed rule, TANF eligibility does not serve as a link to Medicaid 
eligibility, and there is thus no authority for a TANF-based buy-in 
coverage group under Sec.  407.42.
    The proposal to add to Sec.  407.42 individuals eligible for 
Medicaid on the basis of section 1931(b) of the Act is part of our 
effort to update the buy-in regulations that, with a minor exception, 
CMS has not revised since 1992. To reflect the repeal of the AFDC 
program, we proposed to eliminate AFDC recipients as a buy-in 
population from Sec.  407.42. However, the deemed AFDC population 
remains in Medicaid

[[Page 66491]]

statute and regulations.\31\ As we explained in the proposed rule (87 
FR 25117), federal law requires that, for purposes of Medicaid 
eligibility, individuals who are receiving adoption assistance, foster 
care, or guardianship care under Title IV-E of the Act, or low-income 
families described in section 1931(b)(1)(A) of the Act, be treated as 
deemed AFDC recipients. As explained previously, while CMS has 
previously recognized Title IV-E eligible Medicaid beneficiaries to be 
deemed AFDC recipients for purposes of the buy-in populations in sub-
regulatory guidance, we have not yet confirmed the same for Medicaid 
beneficiaries eligible under section 1931 of the Act. We therefore 
proposed to confirm in this revision of Sec.  407.42 that individuals 
eligible for Medicaid on the basis of their receipt of assistance under 
Title IV-E of the Act, or being described in section 1931 of the Act, 
are deemed cash assistance recipients for the purposes of buy-in.
---------------------------------------------------------------------------

    \31\ Notwithstanding the repeal of the AFDC program, section 
1902(a)(10)(A)(i) of the Act, which describes the mandatory Medicaid 
eligibility groups, retains the reference in subparagraph (I) to 
AFDC recipients.
---------------------------------------------------------------------------

    To the extent that additional systems changes are needed, States 
may seek an enhanced matching rate as described in 45 CFR part 95 
subpart F and Part 433 subpart C. States may submit an advanced 
planning document requesting approval for a 90/10 enhanced match for 
the design, development and implementation of their Medicaid Enterprise 
Systems initiatives that contribute to the economic and efficient 
operation of the program, including technology supporting 
implementation of additional Medicaid eligibility groups and related 
maintenance and operations.
    Comment: A commenter requested that CMS clarify whether the State 
option under Group 1 for deemed AFDC recipients is a single option that 
includes all deemed AFDC recipients or whether States may select 
certain deemed AFDC recipients for buy-in.
    Response: We thank the commenter and clarify that the State option 
under Group 1 for deemed AFDC recipients is a single option. 
Individuals eligible for Medicaid either on the basis of section 
1931(b) of the Act or their receipt of adoption assistance, foster 
care, or guardianship care under title IV-E of the Act are examples of 
individuals who would necessarily be included in a State's election of 
this option.
    Group 1 necessarily includes subgroups (b)(1)(i) (relating to 
Medicaid-eligible SSI and SSP recipients) and (b)(1)(ii) (relating to 
Medicaid-eligible deemed SSI and SSP recipients). At State option, 
Group 1 may also include subgroup (b)(1)(iii) (relating to Medicaid-
eligible deemed AFDC recipients). To address any misunderstandings, we 
are modifying the regulation text to clarify that Medicaid-eligible 
deemed AFDC recipients, if included by the State, must encompass 
individuals eligible for Medicaid on the basis of section 1931(b) of 
the Act as well as individuals eligible for Medicaid based on their 
receipt of adoption assistance, foster care or guardianship care under 
part E of title IV of the Act.
    Comment: A commenter questioned why the MSPs are considered a State 
option for buy-in when the MSPs are all mandatory coverage groups.
    Response: We thank the commenter for the opportunity to clarify 
this provision. While the MSP eligibility groups (QMB, SLMB, and QI) 
are mandatory eligibility groups in the Medicaid program, section 1843 
of the Act makes it an option for States to include them in their buy-
in coverage groups for Part B. However, as noted previously, all States 
have elected to provide buy-in coverage for the MSPs under their State 
buy-in agreements. States cannot pay the Part B premiums on behalf of 
individuals who receive social security retirement or disability 
payments unless the individual is covered by the buy-in agreement.
    Individuals whom a State enrolls under its buy-in agreements with 
CMS are exempt from the general rules governing Medicare enrollment 
periods, premium penalties and mandatory withholding of Title II 
benefits pursuant to sections 1840 and 1843 of the Act. Therefore, 
although the MSP groups are optional eligibility groups for buy-in 
agreements under section 1843, the MSPs function as mandatory groups 
for buy-in.
    Comment: A commenter recommended that medically needy groups be 
excluded from Group 3 because medically needy individuals may wish or 
need to use Medicare premium payments to meet their spenddown amount, 
helping to ensure their Medicaid eligibility in a given budget period. 
The commenter further noted that including medically needy individuals 
for State buy-in causes individuals to cycle on and off of State buy-in 
depending upon whether the individual has met their spenddown amount in 
a given budget period, resulting in inconsistent and potentially 
harmful consequences for such individuals. The commenter also requested 
that CMS revise the buy-in coverage groups under Sec.  407.42 to allow 
States to include in their buy-in data exchange with CMS individuals 
for whom the State pays Medicare premiums with State-only funds.
    Response: We share the commenter's concern about the potential loss 
of Medicaid eligibility and buy-in coverage for medically needy 
individuals. However, the statutory authority for States to expand 
their buy-in populations beyond cash program and deemed cash program 
recipients is described in section 1843(h)(1) of the Act. This 
provision offers States a choice of additional buy-in populations 
including (A) individuals who are eligible to receive medical 
assistance under the plan of such State approved under title XIX, or 
(B) Qualified Medicare Beneficiaries (as defined in section 1905(p)(1) 
of the Act). CMS interprets section 1843(h)(1) of the Act to mean that, 
if a State does not elect to add all eligibility groups covered under 
its State plan to its buy-in agreement, beyond cash assistance and 
deemed cash program recipients, the QMB group is the only State-plan 
eligibility group which a State may selectively add to its buy-in 
agreement. (As described in the proposed rule (87 FR 25118), we 
proposed to update Sec.  407.42 to clarify that the reference to QMB 
includes QMB, SLMB, and QI because 1843(h)(3) of the Act specifies that 
the reference to QMB includes SLMB and the State plan pages for buy-in 
treat QI like QMB and SLMB, linking the three eligibility groups under 
one buy-in coverage group.) CMS does not interpret section 1843(h)(1) 
to permit a State to selectively choose other eligibility groups for 
its buy-in agreement, such as all categorically needy groups (which 
would have the effect of excluding medically needy individuals). 
Therefore, we decline to accept the commenter's recommendation to allow 
States to cover the Part B premiums under their State buy-in agreement 
for all Medicaid eligibility groups except the medically needy.
    Further, as discussed previously, States can only pay the Part B 
premiums on behalf of individuals who are members of the State's buy-in 
coverage group and eligible for Part B. We clarify that the State buy-
in data exchange with CMS is used to pay Part B premiums for 
individuals covered under the State buy-in agreement, regardless of 
whether States receive FFP for their coverage of Part B premiums under 
Sec.  431.625. Accordingly, we do not agree that further revisions to 
Sec.  407.42 are warranted. However, we are available to provide 
technical assistance to States regarding the appropriate use of the 
State buy-in data exchange with CMS.

[[Page 66492]]

    The proposed rule reflected the three buy-in coverage groups that 
remain after updating and simplifying the eligibility groups. We also 
solicited comments on two sets of alternatives. The first alternative 
would have further reduced the number of Part B buy-in coverage groups 
under Sec.  407.42 from our proposed three groups to two groups (that 
is, by narrowing the buy-in coverage group options to groups 2 and 3). 
The second alternative would have required all States to include all 
deemed AFDC eligibility groups as deemed recipients of cash assistance. 
We received no comments on either of these alternatives. However, we 
may consider this issue for future rulemaking.
f. Buy-In Programs in the U.S. Territories (Sec.  407.43)
    We also solicited comments on updating Sec.  407.43, which governs 
buy-in coverage groups for the four U.S. territories of Puerto Rico, 
American Samoa, U.S. Virgin Islands, and Guam,\32\ similar to our 
proposal to streamline and clarify buy-in coverage groups in Sec.  
407.42. We did not propose revisions to Sec.  407.43 in the proposed 
rule for the reasons described at 87 FR 25122 and instead sought 
comment on whether updating the buy-in coverage groups in Sec.  407.43 
with a more succinct framework would aid Medicaid agencies in the U.S. 
territories in administering their buy-in programs and improve 
beneficiary experiences.
---------------------------------------------------------------------------

    \32\ The Northern Mariana Islands are governed by Sec.  407.42.
---------------------------------------------------------------------------

    We did not receive comments on this issue.
g. Revisions to Termination of Coverage Under a State Buy-In Agreement 
(Sec.  407.48)
    Section 407.48 describes the process for terminating an 
individual's coverage under a State buy-in agreement when they are 
determined ineligible by either CMS or the State.
    As discussed in the proposed rule at 87 FR 25118, States must 
communicate all disenrollment information through an established data 
exchange process with CMS. To align the regulation with current agency 
practice, we proposed amending paragraphs (c)(1) and (c)(2) and adding 
a proposed new paragraph (e) that would require CMS to prospectively 
convey to States, on a quarterly basis, a schedule of processing cut-
off dates for each calendar month.
    Delays in the receipt of buy-in terminations by CMS impact State 
and beneficiary liability after individuals lose eligibility for 
Medicaid and the State buy-in coverage group.\33\ As currently 
described in paragraph (c)(1), CMS must receive a State buy-in 
termination notice during the second month after the individual loses 
eligibility in order for CMS to stop charging the State for Part B 
premiums the first month the individual no longer qualifies.
---------------------------------------------------------------------------

    \33\ Under Sec.  435.916(f), if an individual is determined by 
the State Medicaid agency to no longer meet the eligibility 
requirements for the eligibility group in which they are enrolled, 
the State Medicaid agency must determine whether the individual is 
eligible for Medicaid on a separate basis before proposing to 
terminate the individual's Medicaid eligibility. While the State is 
making that determination, the State must maintain Medicaid 
coverage, which means that, if the individual's eligibility group is 
included in the State's buy-in agreement, the State must continue 
pay for the individual's Part B premiums.
---------------------------------------------------------------------------

    However, as described in the proposed rule (87 FR 25119), if delays 
in data exchange cause the State to send the termination notification 
for an individual with an effective date that is earlier than the 
second month before the processing month, under paragraph (c)(2), CMS 
will adjust the buy-in termination to the second month prior to the 
month CMS receives the deletion request. The State remains liable for 
premiums through the earlier months.
    We did not receive comments on our proposed revisions to 
termination of coverage provisions in Sec.  407.48.
    We considered an alternative proposal for future rulemaking 
addressing beneficiary payment requirements after termination. 
Currently, when federal systems eventually process the buy-in 
termination, SSA can retroactively recoup up to 2 months of premiums 
from the individual's Social Security check. In practice, after buy-in 
termination, SSA deducts 3 months at a time to account for 2 months' 
retroactive premiums plus the current processing month.\34\ We noted 
that when SSA deducts 3 months of premiums, this can jeopardize the 
individual's ability to pay for food and rent in the first month, 
increasing the risks of hunger or eviction.
---------------------------------------------------------------------------

    \34\ Similarly, in cases where an individual is direct billed 
for premiums, Medicare would bill the individual for up to 2 months' 
retroactive premiums plus the current month's premium.
---------------------------------------------------------------------------

    We considered proposing further modifications to Sec.  407.48(c) to 
limit the number of month of premiums for which SSA may immediately 
bill beneficiaries when buy-in ends. However, we did not formally 
propose a change, and instead solicited comments to inform future 
rulemaking on this topic.
    We received the following comments, and our responses follow.
    Comment: Several commenters expressed support for changing these 
policies because deducting multiple months of premiums from a single 
Social Security check can cause serious hardship to low-income 
individuals, as they rely on that source of income to assist with 
paying for food, rent, and other life's necessities. Some commenters 
recommended that the repayment of back premiums be spread over 6 to 12 
months to minimize any negative impact on individuals, some of whom 
lose Medicaid eligibility for procedural reasons and remain income-
eligible for Medicaid. A commenter urged at a minimum that those facing 
recoupment of back premiums be placed on a payment plan of $10 per 
month for the 2-month liability, which is the same payment schedule 
that Part D Low-Income Subsidy beneficiaries can request with respect 
to Social Security overpayments under Social Security Administration 
program instructions. The commenter also requested that the payment 
plan be automatic in light of program experience showing that low-
income beneficiaries have difficulty understanding correspondence about 
their benefits and frequently do not understand changes until a 
negative event takes place. The commenter added that many individuals 
have limited English proficiency, disabilities, and cognitive 
impairments that may add barriers to initiating requests. The commenter 
lastly recommended that CMS consider eliminating or reducing repayment 
liability because 2 months of premium liability for this subset of the 
Medicare population is a relatively small amount in the context of the 
Medicare program but it can destabilize individuals in this 
economically fragile population, leading to negative housing and health 
outcomes that are much more expensive to fix.
    Response: We appreciate the thoughtful comments on this topic and 
share the commenters' concern that drastic reductions in monthly income 
caused by the collection of back premium charges can jeopardize the 
health and financial stability of low-income individuals. However, we 
would need to further explore the operational implications, and have 
concluded that we would benefit from additional public input. 
Therefore, we are not finalizing the commenter's recommendations in 
this final rule. We will consider these comments in development of 
future rulemaking.

[[Page 66493]]

h. Revisions to Coordination of Medicaid With Medicare Part B (Sec.  
431.625)
    Section 431.625 describes the populations for which Federal 
financial participation (FFP) is available in expenditures for Part B 
premiums. Section 431.625(d)(1) identifies the basic rule, which is 
that FFP is generally unavailable to States for their coverage of Part 
B premiums, except where such coverage is provided to individuals 
receiving money payments under title I, IV-A, X, XIV, XVI, or State 
supplements under section 1616(a) of the Act (optional State 
supplements) or as required by section 212 of Public Law 93-66 
(regarding mandatory State supplements). We proposed updating Sec.  
431.625(d)(1) to eliminate the reference to title IV-A, which has been 
repealed.
    Section 431.625(d)(2) lists the exceptions to this basic rule; that 
is, it lists the Medicaid populations not receiving cash assistance on 
whose behalf States may both cover their Part B premiums and receive 
FFP for such coverage. We proposed updating the outdated list of groups 
in (d)(2) to remove obsolete groups, make technical changes to some 
remaining groups, and add two additional groups.
    Three groups in the current Sec.  431.625(d)(2) are obsolete, and 
we proposed to remove them from the regulation:
     Paragraph (i): AFDC families eligible for continued 
Medicaid coverage despite increased income from employment.
     Paragraph (vi): Deemed recipients of AFDC who are 
participants in a work supplementation program or denied AFDC because 
the payment would be less than $10.
     Paragraph (x): Individuals no longer eligible for the 
disregard of $30 or $30 plus one-third of the remainder, but who, in 
accordance with section 402(a)(37) of the Act, were deemed AFDC 
recipients for a period of 9 to 15 months.
    Due to the proposed deletion of obsolete groups, we proposed to 
redesignate paragraphs (ii), (iii), (iv), and (v) as paragraphs (i), 
(ii), (iii), and (iv), respectively; and paragraphs (vii), (viii), and 
(ix) as paragraphs (v), (vi), and (vii), respectively. We proposed to 
make the following technical changes to the redesignated paragraphs:
     Redesignated paragraph (i): Delete ``435.114'' which CMS 
removed from the regulations in the November 2016 final rule.
     Redesignated paragraph (iii): Add cross-references to 
Sec. Sec.  435.145 and 436.114(e), which have both been revised since 
this list was last updated,\35\ and modify the description of the group 
to be consistent with the current description of children with adoption 
assistance, foster care or guardianship care under title IV-E of the 
Act.
---------------------------------------------------------------------------

    \35\ CMS last modified Sec.  435.145 in the November 2016 final 
rule and last updated Sec.  436.114(e) in the November 21, 1990 
Federal Register (55 FR 48601), entitled ``Medicaid Program; 
Eligibility Groups, Coverage, and Conditions of Eligibility; 
Legislative Changes under OBRA '87, COBRA, and TEFRA,'' (hereinafter 
referred to as the November 1990 final rule).
---------------------------------------------------------------------------

     Redesignated paragraph (iv): Delete ``chapter'' and add in 
its place ``subchapter'', for specificity and for consistency with this 
list.
     Redesignated paragraph (vi): Delete the citation to 
section 1902(e)(3) of the Act and replace it with a cross-reference to 
Sec.  435.225, the regulation which implemented section 1902(e)(3) of 
the Act in November 1990, consistent with other cross-references in 
this list.
     Redesignated paragraph (vii): Add cross-references to 
Sec. Sec.  435.115 and 436.114(f) and (h), both of which CMS revised 
since last updating the list,\36\ and modify the description of the 
Medicaid eligibility group to reflect the current description of 
families with extended Medicaid because of increased collection of 
spousal support under title IV-D of the Act.
---------------------------------------------------------------------------

    \36\ CMS last modified Sec.  435.115 in the November 2016 final 
rule and last changed Sec.  436.114(f) and (h) in the November 17, 
1994 Federal Register (59 FR 59372), entitled ``Aid to Families with 
Dependent Children; Extension of Medicaid when Support Collection 
Results in Termination of Eligibility''.
---------------------------------------------------------------------------

    While we proposed to eliminate from Sec.  431.625(d)(1) the 
reference to title IV-A, we cited our belief that we must account for 
the statutory directive that individuals described in section 1931(b) 
of the Act be treated for purposes of Title XIX of the Act as receiving 
title IV-A assistance. We therefore proposed to add to the proposed 
redesignated paragraph (iii) individuals who are described in section 
1931(b) of the Act.
    Following the redesignated paragraph (d)(2)(vii), we proposed 
adding a new paragraph (d)(2)(viii) to include the QMB, SLMB, and QI 
eligibility groups, as proposed to be defined in Sec.  400.200, to the 
eligibility groups for which FFP is available. This proposed addition 
of paragraph (d)(2)(viii) would codify long-standing policy and bring 
the regulation in alignment with sections 1902(a)(10)(E) and 1905(p)(3) 
of the Act, which authorize FFP for the State payment of Medicare Part 
B premiums for all of the MSPs.
    In addition, we proposed a new paragraph (d)(2)(ix) to clarify that 
States receive FFP for Part B payments for adult children with 
disabilities described in section 1634(c) of the Act. Finally, we made 
a technical correction in Sec.  431.625(d)(3) to update a cross-
reference in the third sentence that is now inaccurate, changing 
``435.914'' to ``435.915.''
    In the proposed rule (87 FR 25120), we described how the 
availability of FFP for State expenditures for dually eligible 
individuals may affect State decisions regarding the breadth of its 
Part B buy-in coverage group. Sections 1902(a)(10)(E) and 1905 
(p)(3)(A) of the Act and the proposed revisions to Sec.  431.625 allow 
States to obtain FFP not only for Medicare Part B premiums for Medicaid 
eligibility groups related to cash assistance but for QMB, SLMB, and QI 
too. We noted that although States cannot obtain FFP for Part B 
premiums for other Medicaid eligibility groups, paying the premiums for 
these individuals under buy-in helps States maximize federal funding 
for health care services.\37\
---------------------------------------------------------------------------

    \37\ The proposed rule incorrectly cited section 1905(a)(29)(B) 
of the Act in support of this statement. The correct citation is 
section 1903(b)(1) of the Act.
---------------------------------------------------------------------------

    We did not receive comments on our proposed revisions to 
regulations addressing Medicaid coordination with Medicare Part B in 
Sec.  431.625.
i. The Medicare Savings Programs (Sec. Sec.  435.4, and 435.123 Through 
435.126)
    In accordance with section 1902(a)(10)(E) of the Act, States must 
provide medical assistance to certain low-income Medicare 
beneficiaries. As discussed in detail in the proposed rule (87 FR 25120 
through 25122), the four eligibility groups described in section 
1902(a)(10)(E) of the Act are generally referred to collectively as the 
``Medicare Savings Programs.''
    The Medicare Savings Programs include four mandatory eligibility 
groups. First, we proposed to include the Medicare Saving Programs in 
the listing in subpart B of part 435 and to add to Sec.  435.4 a 
definition of the Medicare Savings Programs consistent with section 113 
of the Medicare Improvements for Patients and Providers Act (MIPPA), 
which defines the term Medicare Savings Programs to include the QMB, 
SLMB, QI, and QDWI eligibility groups.
    Second, we proposed to add new Sec.  435.123 to codify the QMB 
eligibility group under sections 1902(a)(10)(E)(i) and 1905(p)(1) of 
the Act. As discussed at 87 FR 25121 in the proposed rule, the new 
Sec.  435.123 (b)(2)(i) and (b)(2)(ii) will

[[Page 66494]]

codify in regulation the statutory requirements pertaining to the 
treatment of a cost of living adjustment (COLA) for Social Security 
retirement, survivors, and disability benefits in determining 
eligibility for the QMB, SLMB, and QI eligibility groups. Under section 
1905(p)(2)(D) of the Act, income attributable to a Social Security COLA 
is not countable as income for QMB, SLMB, or QI eligibility purposes 
during a ``transition month,'' which the statute defines as each month 
through the end of the month following the month the U.S. Department of 
Health and Human Services (HHS) publishes the revised official poverty 
level in the Federal Register.
    We reminded States they must not wait until CMS notifies them of 
the new official poverty levels before adjusting their eligibility 
standards. States must adjust their eligibility standards to reflect 
the updated poverty level as soon as the Secretary publishes the new 
poverty level figures in the Federal Register. We also included 
proposed Sec.  435.123(c)(1) and Sec.  435.123(c)(2) reflecting that 
Medicaid covers premiums and cost sharing for QMBs enrolled in Part B 
for coverage of immunosuppressive drugs for QMB under section 402 of 
the CAA, as described in section II of this final rule.
    Third, we proposed to add new Sec.  435.124 for the SLMB 
eligibility group and new Sec.  435.125 for the QI eligibility group 
described in section 1902(a)(10)(E)(ii) and (iv) of the Act, 
respectively.
    Lastly, we proposed to add a new Sec.  435.126 for the QDWI 
eligibility group. Paragraphs (a) through (c) of the proposed QDWI 
provision reflect that, in accordance with sections 1902(a)(10)(E)(ii) 
and 1905(s) of the Act, QDWI pays the Part A premiums for individuals 
under age 65 who become entitled to Part A based on their receipt of 
SSDI, but who subsequently lose SSDI, and as a result, their Part A 
entitlement, on the basis of gainful employment.
    We received the following comment, and our response follows.
    Comment: A commenter expressed support for these proposals, 
particularly with respect to disregarding COLA increases during 
transition months. The commenter advised that they are aware of States 
inappropriately terminating MSP coverage due to COLAs without adjusting 
for updated federal poverty level guidelines.
    Response: We thank the commenter for their support. We reiterate 
that State termination of eligibility during a transition month, by 
continuing to apply the prior year's poverty level and failing to 
disregard the COLA, is inconsistent with the statute and harmful to 
beneficiaries. After considering the comments received and for the 
reasons outlined in the proposed rule and our responses to comments, we 
are finalizing without modification our proposed amendments to Sec.  
400.200, Sec.  406.21, Sec.  406.26, Sec.  407.48, Sec.  431.625, and 
Sec.  435.4 and our proposed additions at Sec. Sec.  435.124 through 
436.126. We are finalizing Sec. Sec.  407.40 and 435.123 with minor 
technical revisions to replace references to the resource standard for 
the Part D Low-Income Subsidy (LIS) Program with citations to the 
resource levels under section 1905(p)(1)(C) of the Act because section 
11404 of the Inflation Reduction Act (IRA) of 2022 (Pub. L. 117-169) 
delinked the MSP and LIS resource standard starting January 1, 2024, 
when the LIS standard increases under the law, while the current MSP 
standard will continue to apply after that date. In addition, in 
response to comments received, we are finalizing a modified version of 
Sec.  407.42 to clarify State coverage group options. This modification 
clarifies that Medicaid-eligible deemed AFDC recipients, if included in 
State buy-in agreements, must encompass individuals eligible for 
Medicaid on the basis of section 1931(b) of the Act as well as 
individuals eligible for Medicaid based on their receipt of adoption 
assistance, foster care, or guardianship care under Part E of title IV 
of the Act.

III. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et 
seq.), we are required to provide 60-day notice in the Federal Register 
and solicit public comment before a ``collection of information'' 
requirement is submitted to the Office of Management and Budget (OMB) 
for review and approval. For the purposes of the PRA and this section 
of the preamble, collection of information is defined under 5 CFR 
1320.3(c) of the PRA's implementing regulations.
    To fairly evaluate whether an information collection should be 
approved by OMB, section 3506(c)(2)(A) of the PRA requires that we 
solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    In our April 27, 2022 (87 FR 25090) proposed rule, we solicited 
public comment on each of these issues for the following provisions 
that contain information collection requirements. We did not receive 
any such comments.

A. Wage Estimates

    To derive average costs, we used data from the U.S. Bureau of Labor 
Statistics' (BLS) May 2021 National Occupational Employment and Wage 
Estimates for our salary estimates (www.bls.gov/oes/current/oes_nat.htm). In this regard, Table 1 presents BLS' mean hourly wage, 
our estimated cost of fringe benefits and overhead, and our adjusted 
hourly wage.

                          Table 1--National Occupational Employment and Wage Estimates
----------------------------------------------------------------------------------------------------------------
                                                                                Fringe benefits      Adjusted
              Occupation title                Occupation code    Mean hourly    and overhead ($/ hourly wage ($/
                                                                 wage ($/hr)          hr)              hr)
----------------------------------------------------------------------------------------------------------------
All Occupations.............................         00-0000            28.01              n/a              n/a
----------------------------------------------------------------------------------------------------------------

    The mean wage under All Occupations applies to a group of 
respondents that varies widely from working and nonworking individuals 
and by respondent age, location, years of employment, educational 
attainment, and other factors. We are not adjusting this figure for 
fringe benefits and overhead since the individual's enrollment 
activities will occur outside the scope of their employment, should 
they be employed.

B. Information Collection Requirements (ICRs)

    The following topics are listed in the order of their appearance in 
section II of this preamble.

[[Page 66495]]

1. ICRs Regarding Beneficiary Enrollment Simplification (Sec. Sec.  
406.27 and 407.23)
    The following changes will be submitted to OMB for approval under 
control number 0938-1426 (CMS-10797).
    As described in section II.A. of this rule, we are amending 
Sec. Sec.  406.27 and 407.23 to provide special enrollment periods 
(SEPs) for individuals experiencing an exceptional condition to enroll 
in Medicare premium Part A and Part B. To utilize these new SEPs, an 
individual will have to submit an enrollment request via a new 
enrollment form. The form will be used by individuals who have missed 
an enrollment period due to an exceptional condition to enroll in Part 
A and/or Part B (see section II.A.2. of this rule for a more detailed 
discussion).
    We estimate that it will take an individual approximately 15 
minutes (0.25 hr) at $28.01/hr to complete the form, pull together any 
required supporting documentation, and submit the completed form to 
CMS.
    Due to the newness of the SEPs, CMS does not have precise data to 
estimate the number of individuals that may enroll under the new 
exceptional condition SEPs. However, we believe that the closest 
equivalent is the number of individuals enrolled during the GEP because 
the SEPs provide an opportunity to enroll outside of the GEP and we 
continue to believe that this is the best approach.

                                     Table 2--GEP Enrollments From 2016-2021
----------------------------------------------------------------------------------------------------------------
                                                                    Individuals     Individuals
                                                                   enrolling in    enrolling in    Total Part A
                              Year                                premium Part A   Part B during     and B GEP
                                                                  during the GEP      the GEP       enrollments
----------------------------------------------------------------------------------------------------------------
2016............................................................           6,546         102,935         109,481
2017............................................................           2,021          99,728         101,749
2018............................................................           1,819          98,473         100,292
2019............................................................           2,223         104,808         107,031
2020............................................................           2,221         103,373         105,594
2021............................................................           1,918         103,230         105,148
                                                                 -----------------------------------------------
    Total.......................................................          16,748         612,547         629,295
----------------------------------------------------------------------------------------------------------------
6-Year Average..................................................           2,791         102,091         104,882
----------------------------------------------------------------------------------------------------------------

    Based on these data, we estimate that the average number of GEP 
enrollments per year is 2,791 for premium Part A and 102,091 for Part B 
(totaling 104,882 annually). We also assume that only a portion of the 
enrollments would involve an SEP enrollment request since the new SEPs 
are applicable only for exceptional conditions. In the proposed rule we 
assumed that 25 percent of individuals who enrolled during the GEP 
would now be eligible to enroll under an exceptional circumstance SEP.
    Based on public comment we are making revisions in this final rule 
that could increase the number of individuals eligible for an 
exceptional circumstance SEP, we are increasing the estimated 
percentage of GEP enrollments transferring to SEP enrollments to 30 
percent. As stated previously, we do not have data to estimate 
projected usage of the exceptional circumstance SEP, but we assume that 
it will be a small portion of GEP enrollments. We believe that 30 
percent is on the high end of projected enrollments but are opting for 
that amount so as to not underestimate the burden of this provision.
    Assuming that 30 percent of individuals who normally would have had 
to wait until the GEP to enroll will now be eligible using an SEP will 
result in 31,465 (104,882 enrollments x 0.30) SEP requests annually. As 
such, we estimate an annual ongoing burden of 7,866 hours (31,465 
requests x 0.25 hr/request) at a cost of $220,327 (7,866 hr x $28.01/
hr).
    We did not receive any comments on the burden of our proposals. As 
discussed in section II.A. of this proposed rule, we are making the 
following changes in this final regulation.
     We are revising Sec. Sec.  406.27(b)(1) and 407.23(b)(1), 
to specify that the SEP for Individuals Impacted by an Emergency or 
Disaster is also available if the individual did not live in an area 
impacted by a Federal, State or local government-declared disaster or 
emergency, but the individual's authorized representative (as defined 
at Sec.  405.910), legal guardian, or individual person who makes 
healthcare decisions on behalf of the individual did. We are also 
revising Sec. Sec.  406.27(b)(2) and 407.23(b)(2) to extend the 
duration of the SEP to 6 months after the end of the emergency 
declaration. These changes provide flexibility to individuals who are 
enrolling, or who require assistance enrolling, in Medicare Parts A and 
B after an emergency or disaster. We do not foresee these revisions 
affecting our proposed enrollment burden estimates.
     We are revising Sec. Sec.  406.27(c)(1)(i) and 
407.23(c)(1)(i) to include brokers or agents of health plans as 
entities that may have been a source of misinformation for the SEP for 
Health Plan or Employer Misrepresentation or Providing Incorrect 
Information. Originally, we proposed to only include employers and 
GHPs. Including brokers or agents of health plans as entities that may 
have been a source of misinformation expands the definition of who is a 
considered trusted sources of information. Agents and brokers of health 
plans could be considered as extensions of an individual's health plan 
and play a critical role in informing individuals of their enrollment 
options. We are also revising Sec. Sec.  406.27(c)(1) and 407.23(c)(1) 
to expressly permit the use of either documentation of 
misrepresentation or written attestation. Originally, we proposed that 
written documentation was the only evidence accepted in order to 
qualify for this SEP. Including a written attestation will ensure that 
beneficiaries that individuals who receive documentation in forms other 
than written are not disadvantaged. Lastly, we are revising Sec. Sec.  
406.27(c)(2) and 407.23(c)(2) to increase the duration from 2 months to 
6 months to facilitate consistency with the other SEPs. We do not 
foresee these revisions effecting our proposed enrollment burden 
estimates.
     We are revising Sec. Sec.  406.27(d)(2) and 407.23(d)(2) 
to extend the SEP for Formerly Incarcerated Individuals duration to 
reflect that the SEP starts the

[[Page 66496]]

day of the individual's release from incarceration and ends the last 
day of the 12th month after the individual is released from 
incarceration. In addition, we are revising the entitlement date of 
this SEP at Sec. Sec.  406.27(d)(3) and 407.23(d)(3) to allow an 
individual to choose an entitlement date retroactive to the date of 
their release from incarceration. The changes to extend the SEP 
duration from 6 months to 12 months and allow for retroactive 
enrollment will provide formerly incarcerated individuals with 
additional time to enroll while they are establishing stable conditions 
and reintegrating into society, as well as the option to have 
continuous coverage upon release from incarceration. We do not foresee 
these revisions effecting our proposed enrollment burden estimates.
     We are revising Sec. Sec.  406.27(e)(3) and 407.23(e)(3) 
to allow additional opportunities for individuals to choose an 
entitlement date retroactive to the date of their Medicaid coverage 
termination. We do not foresee these revisions affecting our proposed 
enrollment burden estimates.
     We are revising Sec. Sec.  406.27(f)(2) and 407.23(f)(2) 
to provide for a minimum duration of 6 months for the SEP for 
Exceptional Conditions. Originally, we proposed that the duration of 
the SEP would be determined on a case-by-case basis. We do not foresee 
these revisions effecting our proposed enrollment burden estimates.
     We have also updated Table 2 at 87 FR 25123 to include 
2021 GEP enrollment data. The incorporation of this additional year of 
data slightly increased the number of projected annual GEP enrollments 
from 104,829 to 104,882. We accounted for this increase in our 
calculation previously. We recognize the modifications to the proposed 
SEPs could result in an increased number of SEP enrollments, however we 
believe that this increase would be negligible since we are not 
widening the audience who can be eligible for these SEPs.
2. ICRs Regarding Extended Months of Coverage of Immunosuppressive 
Drugs for Kidney Transplant Patients (Sec. Sec.  407.57, 407.59, 
407.62, and 407.65)
    With regard to this rule's Part B-ID benefit attestation 
requirements, the following changes will be submitted to OMB for 
approval under control number 0938-1428 (CMS-10798). With regard to our 
requirements for terminating the Part B-ID benefit, the following 
changes will be submitted to OMB for approval under control number 
0938-0025 (CMS-1763).
a. Attestations (CMS-10798, OMB 0938-1428)
    As described in section II.B of this rule, Congress enacted section 
402 of the CAA, amending sections 226A, 1836, 1837, 1838, 1839, 1844, 
1860D-1, 1902, and 1905 of the Act to provide immunosuppressive drug 
coverage for certain individuals whose Medicare entitlement based on 
ESRD would otherwise end 36 months after the month in which they 
received a successful kidney transplant. We specified as a condition of 
enrollment, in Sec. Sec.  407.57 and 407.59 of this rule and as 
required in section 402 of the CAA, that an individual must attest that 
(a) they are not enrolled and do not expect to enroll in coverage 
described in Sec.  407.55 and (b) they will notify the Commissioner 
within 60 days of enrollment in such other coverage.
    To facilitate deemed enrollment into the Part B-ID benefit, 
eligible beneficiaries whose coverage will be terminating 36 months 
after the month of a successful kidney transplant will be provided 
information about the Part B-ID benefit, and informed that they can 
enroll in this coverage by attesting that they do not have other 
excepted coverage and that they will notify the Commissioner of 
enrollment in such other coverage. We plan to include information about 
the Part B-ID benefit in the pre-termination notice, as discussed in 
section II.B.2.b. ``Determination of Eligibility'' of this final rule, 
and include instructions for individuals to enroll in the Part B-ID 
benefit, including how to provide the required attestation. We, along 
with SSA believe that a verbal (telephonic) method will be the most 
efficient method for a beneficiary to provide the attestation required 
to enroll in the Part B-ID benefit. It is easily accessible and will 
avoid potential delays in an individual receiving this vital coverage, 
as it will not be interrupted or delayed by disruptions in mail or 
other unforeseen circumstances. If the individual is not amenable to 
the verbal attestation, they can visit the website address provided to 
download a PDF-fillable version of the form to submit to SSA, or call 
SSA to request a paper form.
    We received many comments on our proposed methods of attestation 
for the Part B-ID benefit, but we did not receive comments on our 
burden estimates. Commenters supported CMS' approach to allow 
individuals to use various methods to attest to their eligibility and 
enroll in the Part B-ID benefit, and several commenters recommended 
that CMS consider additional methods of attestation, particularly 
electronic submission, fax, or other signed documents. Those comments 
and our responses are in section II.B.2. ``Part B-ID Benefit 
Eligibility, Enrollment, Entitlement, and Termination'' of this final 
rule. In consideration of those public comments, and to provide for 
flexibility for other attestation methods in the future, we are 
revising Sec.  407.59 to provide for additional attestation methods 
(that is, electronic submission or fax).
    The attestation options will also be available for individuals who 
were previously terminated from Medicare based on ESRD after 36 months, 
or individuals who are reenrolling into the Part B-ID benefit for 
coverage of immunosuppressive drugs.
    We expect that the population of individuals eligible for the Part 
B-ID benefit will use all available options: telephonic attestation, 
completion and submission of website-accessed PDF-fillable forms, and 
completion of paper forms requested from CMS or SSA, (and eventually 
fax and online) to provide the required attestation to SSA. We expect 
that each of the options for providing the required attestation, 
including future fax or online options, will require approximately the 
same burden. We estimate that individuals attesting telephonically or 
via a paper or PDF attestation form, (as well as future fax or online 
options), will have the same time of 10 minutes (0.167 hr) per 
response.
    CMS's Office of the Actuary (OACT) expects an average of 767 
individuals, whose Medicare entitlement based on ESRD which ended 36-
months after the month in which they received a successful kidney 
transplant, to request enrollment in the Part B-ID benefit from 2023 
through 2025. This estimate was provided by CMS actuaries based on 
historical information provided by SSA on the number of individuals who 
had prior Medicare Part A coverage and a kidney transplant between 2001 
and 2019, and then making downward adjustments to account for those 
individuals who are deceased or who are anticipated to have other 
comprehensive coverage and will not be eligible for the Part B-ID 
benefit. The overall results of applying these assumptions is that 
roughly 1,800 individuals would be enrolled in the Part B-ID benefit in 
2023, with an estimated growth of 250 enrollees each year thereafter. 
This would equate to approximately 2,300 individuals (1,800 in 2023 + 
250 in 2024 + 250 in 2025) enrolling in the Part B-ID benefit from 2023 
through 2025, or an annual estimated enrollment of 767 individuals

[[Page 66497]]

(2,300 individuals/3 years). The burden associated with the Part B-ID 
benefit is the time required to complete and submit an attestation. We 
estimate a total annual burden of 128 hours (767 Part B-ID enrollees * 
0.167 hr/response) at a cost of $3,585 (128 hr * $28.01/hr).
b. Termination of the Part B-ID Benefit (CMS-1763, OMB 0938-0025)
    In Sec.  407.62 of this rule, individuals can voluntarily terminate 
their Part B-ID benefit at any time by notifying SSA. Primarily, an 
individual will contact SSA to request termination, either 
telephonically, or by visiting an SSA field office. If an individual is 
not amenable to contacting SSA to terminate their Part B-ID benefit, 
they can access the CMS or SSA website and print, sign and mail the 
form to SSA, or call SSA to request a paper form to submit their 
request. We expect that all available options (SSA contact, completion 
and submission of website-accessed form, and completion of paper form 
requested from CMS or SSA) to request a termination from the Part B-ID 
benefit will be used by beneficiaries. We expect that each of the 
options for requesting a termination from the Part B-ID benefit will 
require approximately the same burden, namely 10 minutes (0.167 hr) per 
response.
    Currently, individuals who are requesting termination of premium 
Hospital Insurance (Part A) or termination of Supplementary Medical 
Insurance (Part B) or both can complete the Request for Termination 
Form (CMS-1763). While we are revising the form to include termination 
of the Part B-ID benefit, we are not changing our currently approved 
per response time estimate of 10 minutes (0.167 hr) per response.
    We have limited means of estimating how many individuals will opt 
to terminate their Part B-ID benefit as this immunosuppressive drug 
benefit is yet to be implemented--the statutory effective date is 
January 1, 2023. However, for estimation purposes, we assume an average 
of 10 percent of the individuals enrolled in the Part B-ID benefit will 
voluntarily disenroll. As discussed in section III.B.2.a. of this final 
rule, OACT estimates that approximately 767 eligible individuals will 
enroll in the Part B-ID benefit annually from 2023-2025, we estimate 
that 77 of these individuals (767 eligible individuals x 0.10) will 
voluntarily terminate their Part B-ID benefit. This does not include 
individuals who are involuntarily terminated from the Part B-ID benefit 
because CMS or SSA determined that they had other coverage that made 
them ineligible for the Part B-ID benefit, or because they failed to 
pay the required premium. Also excluded from this number are 
individuals who will obtain Medicare coverage based on age, disability, 
or ESRD status, and therefore, will not remain enrolled in the Part B-
ID benefit, and individuals who die. Our methodology was to estimate 
the total Part B terminations as a percent of total Part B enrollments 
annually from 2019-2021 (about 3 percent).\38\ We then assumed that the 
Part B-ID benefit terminations would be more frequent, as we anticipate 
that individuals may explore options available for more comprehensive 
coverage, given an individual's other post-transplant associated 
expenses. Therefore, we increased that percentage from 3 percent to 10 
percent. We then used OACT's growth estimate of 767 enrollments 
annually between 2023 and 2025 to estimate that 10 percent of those 
enrollments, or approximately 77 annually, would terminate their Part 
B-ID benefit voluntarily.
---------------------------------------------------------------------------

    \38\ Data source: ELMO, 12/3/2021.
---------------------------------------------------------------------------

    Based on voluntary terminations of the Part B-ID benefit only, by 
the methods described previously, we expect a total annual burden of 13 
hours (77 requests to terminate the Part B-ID benefit x 0.167 hr) at a 
cost of $364 (13 hr x $28.01/hr) per year. Although, we have limited 
means to determine the actual number of individuals who will terminate 
their coverage, as we implement this benefit we will have data to 
better adjust (if/when needed) our burden estimates in the future.
c. Reporting of MSP Part B-ID Benefit Enrollment Information (CMS-
10143, OMB 0938-0958) and (CMS-R-284, OMB 0938-0345)
    As described in section II.B.3. of this final rule, under section 
402(f) of the CAA, we proposed to modify three Medicare Savings 
Programs (MSP) eligibility groups (Qualified Medicare Beneficiary 
(QMB), Specified Low-Income Medicare Beneficiary (SLMB) and Qualifying 
Individual (QI)) to pay premiums and, if applicable, cost sharing for 
low-income beneficiaries enrolled in Part B-ID (MSP Part B-ID). Under 
the MSP Part B-ID benefit, States will pay the Part B-ID benefit 
premiums and cost sharing for QMBs, and Part B-ID benefit premiums for 
SLMBs and QIs.
    Once States enroll individuals in an MSP Part B-ID benefit, States 
will need to report the enrollment information to CMS. As discussed in 
our April 27, 2022, proposed rule (87 FR 25125), we anticipated 
enrollment in a MSP Part B-ID benefit mainly occurring in the 12 States 
that, as of December 2021, have elected to not expand Medicaid 
eligibility to adults with income up to 138 percent of the FPL (``non-
expansion States'') and among QMB individuals in these States who fall 
into the coverage gap--that is individuals whose income prevents them 
from receiving Medicaid coverage, but is too low to qualify for 
advanced premium tax credit (APTC) or cost sharing reduction (CSR) in 
the Exchange. Based on reviewing internal data from 2021 to determine 
how many individuals were enrolled in MSPs, had Medicare entitlement 
based on ESRD, and were 36 months post-transplant and our actuaries' 
estimate, we anticipated only 250 individuals per year enrolling in the 
Part B-ID benefit, all of whom will enroll through the QMB Part B-ID 
benefit. Because we anticipated all of these individuals will initially 
be enrolled in MSPs and simply convert over to an MSP Part B-ID benefit 
when they lose Medicare entitlement based on ESRD and then enroll in 
the Part B-ID benefit, we did not anticipate that there will be any new 
or revised burden for these enrollees to apply for a MSP Part B-ID 
benefit other than the initial enrollment in the Part B-ID benefit. 
Rather, the burden for enrolling these individuals will fall on the 
State when it is performing a redetermination of Medicaid eligibility. 
As described in section II.B.3. of this rule, when an individual loses 
Medicaid eligibility, a State must already perform a redetermination 
under all categories of eligibility per Sec.  435.916(f)(1). As such, 
we did not anticipate any new or revised burden on States enrolling 
these individuals either. We also anticipated that there would not be 
any new or revised reporting burden on States for the MSP Part B-ID 
benefit because individuals would receive coverage under existing MSP 
eligibility groups. States already submit enrollment information for 
all current MSP enrollees through the Medicare Modernization Act (MMA) 
under control number 0938-0958 (CMS-10143) and the Transformed Medicaid 
Statistical Information System (T-MSIS) under control number 0938-0345 
(CMS-R-284) files, and we did not anticipate including the new MSP Part 
B-ID benefit enrollees in the MMA and T-MSIS file submissions to CMS 
would result in any new burden. For the MMA file, we proposed to inform 
States to report MSP Part B-ID benefit enrollees using the exact same 
code as for any other MSP enrollee, but that CMS would determine MSP 
Part B-ID benefit enrollment by examining both the MSP code and the 
Medicare enrollment reason code. For the T-MSIS file, we

[[Page 66498]]

proposed to inform States to report MSP Part B-ID benefit enrollees 
using the exact same code as for any other MSP enrollee, but to fill in 
a different value for another field. Because we expected no coding 
changes to either MMA or T-MSIS files, we did not anticipate that any 
system changes would be necessary for submitting these files to CMS.
    We did not receive any comments indicating that there would be any 
new burden. As a result, we are finalizing our assumptions as proposed.
3. ICRs Regarding Simplifying Regulations Related to Medicare 
Enrollment Forms (Sec. Sec.  406.7 and 407)
    As described in section II.C. of this rule, we are revising 
Sec. Sec.  406.7 and 407.11 to remove all references to specific 
enrollment forms that are used to apply for entitlement under Medicare 
Part A and enrollment under Medicare Part B. This is an administrative 
change that has no impact on the use or availability of these forms and 
has no effect on any of our currently approved information collection 
requirements or burden estimates. We are removing references to the 
following enrollment forms that are currently OMB approved and are 
still in use under the approved scope:
     Medicare Part A Enrollment Forms (Sec.  406.7)
    ++ CMS-18-F-5 (OMB 0938-0251)--Application for Hospital Insurance 
Entitlement
    ++ CMS-43 (OMB 0938-0080)--Application for Health Insurance 
Benefits under Medicare for Individuals with End Stage Renal Disease 
(ESRD)
     Medicare Part B Enrollment forms (Sec.  407.11)
    ++ CMS-18-F-5 (OMB 0938-0251)--Application for Hospital Insurance 
Entitlement
    ++ CMS-4040 (OMB 0938-0245)--Application for Enrollment in the 
Supplementary Medical Insurance Program.
    ++ CMS-40-B (OMB 0938-1230)--Application for Enrollment in Medicare 
Part B (Medical Insurance)
    ++ CMS-40-D \39\--Application for Enrollment in the Supplementary 
Medical Insurance Program.
---------------------------------------------------------------------------

    \39\ CMS-40-D became obsolete in 3/2022.
---------------------------------------------------------------------------

    ++ CMS-40-F \40\--Application for Medical Insurance
---------------------------------------------------------------------------

    \40\ CMS-40-F became obsolete in 2008.
---------------------------------------------------------------------------

    We did not receive any comments on our proposal and are finalizing 
the change as proposed.

C. Summary of Annual Burden Estimates for Finalized Changes

                                                    Table 3--Annual Requirements and Burden Estimates
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Time per
 Regulation section(s) under Title  OMB control No. (CMS    Respondents        Total         response       Total time    Labor cost ($/  Total cost ($)
           42 of the CFR                   ID No.)                           responses        (hours)         (hours)           hr)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sec.  Sec.   406.27 and 407.23....  0938-1426 (CMS-               31,465          31,465            0.25           7,866           28.01         220,327
                                     10797).
Sec.   407.59.....................  0938-1428 (CMS-                  767             767           0.167             128           28.01           3,585
                                     10798).
Sec.   407.62.....................  0938-0025 (CMS-1763)              77              77           0.167              13           28.01             364
                                   ---------------------------------------------------------------------------------------------------------------------
    Total.........................  ....................          32,309          32,309          Varies           8,007           28.01         224,276
--------------------------------------------------------------------------------------------------------------------------------------------------------

IV. Regulatory Impact Analysis

A. Statement of Need

    This final rule implements certain Medicare-related provisions of 
the CAA, as well as propose other enrollment-related changes. Section 
120(a)(1) of the CAA revised the entitlement periods for individuals 
who enroll in Medicare Part B in the last 3 months of their IEP, deemed 
IEP, or during the GEP, beginning January 1, 2023. Under longstanding 
Medicare rules, the effective date of entitlement varies depending on 
whether the individual is enrolling during the IEP or GEP and when an 
enrollment is made during each specific enrollment period which could 
cause confusion. The changes should help eliminate this potential 
confusion by establishing a straightforward and uniform policy 
regarding Part A and Part B entitlement start dates.
    Section 120 of the CAA also gives the Secretary the authority to 
establish SEPs for exceptional conditions. Under current rules, 
individuals are only able to enroll outside of the IEP or GEP either 
through States enrolling them through the buy-in process under section 
1843 of the Act or by using a limited number of SEPs and, outside of 
that, relief is only available in instances where an individual did not 
enroll due to a Federal Government error. Other than these very 
specific scenarios, no exceptions are legally permissible.
    The changes give the Secretary the flexibility to address other 
situations where a beneficiary missed an enrollment period and mirrors 
the authority that has long been available under the Medicare Part C 
and Part D programs. We believe this provision is likely to improve 
access to continuous coverage for individuals covered by Medicare Part 
A and Part B, either through expediting the effective date of coverage 
or by allowing for opportunities to enroll in coverage sooner. 
Therefore, we anticipate this change having a positive impact on 
communities who experience social risk factors impacted by lack of 
continuous health coverage. Our changes fulfill the goals of the 
January 28, 2021. Executive Order on Advancing Racial Equity and 
Support for Underserved Communities through The Federal Government, 
which directs the Secretary of the Department of Health and Human 
Services, among other things, to pursue a comprehensive approach to 
advancing equity for all, including people of color and others who have 
been historically underserved, marginalized, and adversely affected by 
persistent poverty and inequality.\41\
---------------------------------------------------------------------------

    \41\ https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/.
---------------------------------------------------------------------------

    Further, section 402 of the CAA extends immunosuppressive drug 
coverage for individuals whose Medicare entitlement based on ESRD ends 
36-months after the month in which they received a successful kidney 
transplant by providing immunosuppressive drug coverage under Medicare 
Part B for certain individuals. Under current rules, an individual 
loses Medicare coverage 36 months after a successful transplant (unless 
they are otherwise entitled to the coverage), but it does not negate 
the need for an individual to take immunosuppressive drugs long-term. 
Not having coverage for immunosuppressive drugs can cause individuals 
to reduce their usage in order to make their medication last longer or 
they may stop taking the medications entirely which can lead to organ 
rejection and transplant failure. The new Part B-ID benefit helps 
remedy

[[Page 66499]]

this situation by ensuring that these individuals have access to 
immunosuppressive drug coverage potentially for the rest of their life. 
Even with access to immunosuppressive drug benefits, low-income 
individuals may be unable to afford these immunosuppressive drugs due 
to their high cost. By extending certain MSP programs to this new Part 
B-ID benefit, States will cover the costs of the Part B-ID premiums and 
in some cases, cost sharing as well. In particular, this MSP Part B-ID 
coverage will help individuals who lose Medicare coverage 36 months 
after a successful transplant and live in a non-expansion State with 
income too high to receive subsidies for purchasing a health plan in 
the Exchange. Without this MSP Part B-ID coverage, these individuals 
may be unable to pay Part B-ID premiums and cost sharing and as such, 
at higher risk of transplant failure. As such, supporting continued 
Medicaid coverage is consistent with the Executive Order on 
Strengthening Medicaid and the Affordable Care Act and the Executive 
Order on Continuing to Strengthen Americans' Access to Affordable 
Quality Health Coverage.
    In addition to implementing various sections of the CAA, we sought 
to modernize the Medicare Savings Programs through which States cover 
Medicare premiums and cost sharing and updated the various federal 
regulations that affect a State's payment of Medicare Part A and B 
premiums for beneficiaries enrolled in the Medicare Savings Programs 
and other Medicaid eligibility groups. We believe that it is important 
to update these policies to reflect statutory changes over the last 3-
plus decades as well as to codify certain administrative practices that 
have evolved over the years. We anticipated our proposals would also 
advance health equity by improving low income individuals' access to 
continuous, affordable health coverage and use of needed health care 
consistent with the Executive Order on Advancing Racial Equity and 
Support for Underserved Communities Through the Federal Government. We 
also expected that our proposals would improve the customer service 
experience of dually eligible beneficiaries consistent with the goals 
of the Executive Order on Transforming Federal Customer Experience and 
Service Delivery to Rebuild Trust in Government. These are commonsense, 
good government proposals that would also reduce administrative burden 
on States and promote transparency and clarity regarding State payment 
of premiums or buy-in.

B. Overall Impact

    We have examined the impacts of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 
1980, Pub. L. 96-354), section 1102(b) of the Act, section 202 of the 
Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4), 
Executive Order 13132 on Federalism (August 4, 1999), and the 
Congressional Review Act (5 U.S.C. 804(2)).
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Section 
3(f) of Executive Order 12866 defines a ``significant regulatory 
action'' as an action that is likely to result in a rule: (1) having an 
annual effect on the economy of $100 million or more in any 1 year, or 
adversely and materially affecting a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or State, local or tribal governments or communities (also 
referred to as ``economically significant''); (2) creating a serious 
inconsistency or otherwise interfering with an action taken or planned 
by another agency; (3) materially altering the budgetary impacts of 
entitlement grants, user fees, or loan programs or the rights and 
obligations of recipients thereof; or (4) raising novel legal or policy 
issues arising out of legal mandates, the President's priorities, or 
the principles set forth in the Executive Order.
    A regulatory impact analysis (RIA) must be prepared for major rules 
with economically significant effects ($100 million or more in any 1 
year). These final regulations are not economically significant within 
the meaning of section 3(f)(1) of Executive Order 12866. However, OMB 
has determined that the actions are significant within the meaning of 
section 3(f)(4) of the Executive Order. Therefore, OMB has reviewed 
these regulations, and the Department has provided the following 
assessment of their impact.
    The RFA requires agencies to analyze options for regulatory relief 
of small entities if a rule has a significant impact on a substantial 
number of small entities. For purposes of the RFA, small entities 
include small businesses, nonprofit organizations, and small 
governmental jurisdictions. Most hospitals and most other providers and 
suppliers are small entities, either by nonprofit status or by having 
revenues of less than $8.0 million to $41.5 million annually. 
Individuals and States are not included in the definition of a small 
entity. We are not preparing an analysis for the RFA because we have 
determined, and the Secretary certifies, that this final rule will not 
have a significant economic impact on a substantial number of small 
entities. This rule's costs will predominantly fall on the Federal 
government and States, and the associated burden falls primarily on the 
Federal government and individuals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule whose mandates require spending in any 1 year of $100 
million in 1995 dollars, updated annually for inflation. In 2022, that 
threshold is approximately $165 million. This final rule will not 
result in expenditures that meet or exceed this amount.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on state 
and local governments, preempts state law, or otherwise has Federalism 
implications. This rule will not have a substantial direct effect on 
state or local governments.

C. Detailed Economic Analysis

1. Beneficiary Enrollment Simplification (Sec. Sec.  406.22 and 407.23)
    We are revising regulations to implement section 120 of the CAA. 
These revisions make the effective date of coverage the first of the 
month following an individual's enrollment during their IEP or during 
the GEP. We are also establishing SEPs that will provide individuals 
who meet certain exceptional conditions an opportunity to enroll 
without having to wait for the GEP.
a. Benefits
    The changes to the IEP and GEP coverage dates provide Medicare 
beneficiaries access to coverage more quickly and may allow them faster 
access to needed medical care. The new SEPs for beneficiaries who have 
experienced an exceptional condition that caused them to delay 
enrollment in

[[Page 66500]]

Medicare also provide access to Medicare coverage earlier, reducing 
gaps in coverage, and beneficiaries may avoid LEPs by utilizing these 
SEPs.
b. Costs
    Costs include increased months of coverage provided by the new SEPs 
and the earlier effective dates for the IEP and GEP and potential loss 
of LEP revenue. As detailed earlier, we estimate that approximately 
31,449 individuals would be eligible to enroll earlier using the 
exceptional condition SEPs.
    In addition, CMS does not foresee an increase of costs to Medicare 
beneficiaries related to Part B premium increases. Specifically, we do 
not expect beneficiaries enrolling under these new provisions to have 
higher-than-average costs, so we assume this provision will not have an 
impact on the Part B premium.
c. Transfers
    The CAA also modified section 1839(b) of the Act to exempt 
individuals who enroll pursuant to an SEP for exceptional conditions 
established under section 1838(m) of the Act, from paying an LEP. 
Therefore, beneficiaries who are able to utilize the newly established 
SEPs will benefit from an avoidance of an LEP. Based on the data 
described in section III B.1 of this final rule, we estimate 
approximately 31,449 premium Part A and Part B enrollments annually 
under the new SEPs. We anticipate that the loss of revenue associated 
with LEP and the additional months of coverage associated with 
individuals using the new SEPs will be a cost to the Medicare Trust 
Fund. Due to variables that CMS cannot predict, such as the timing of 
when beneficiaries will use an SEP to enroll in Medicare or what their 
LEP would have been had the SEP not been made available, CMS is not 
able to estimate an exact cost to the Trust Funds that will result from 
enrolling beneficiaries through SEPs. However, based on the small 
number of beneficiaries impacted, and because this rule allows that 
individuals will have to miss an enrollment period in order to access 
these new SEPs, we expect the increased costs to the Medicare to be 
negligible, even considering the modifications to the SEPs in the final 
rule as we believe these changes will have a negligible impact on the 
use of the new exceptional conditions SEPs. Further, we note the 
beneficiaries who are enrolled via these SEPs would be paying premiums 
to the Trust Fund, which would be revenue that might have otherwise 
gone uncollected.
2. Extended Months of Coverage of Immunosuppressive Drugs for Kidney 
Transplant Patients (Sec. Sec.  407.1, 407.55, 407.57, 407.59, 407.62, 
407.65, 408.20, and 423.30)
    We are revising regulations that would establish the new Part B-ID 
benefit. These regulations would establish the eligibility requirements 
(including the requirement that the individual attest that they do not 
have other disqualifying health coverage), the reasons and process for 
termination of coverage, and the basis for the premium for the benefit.
a. Benefits
    The American Society of Nephrology and the HHS Assistant Secretary 
for Planning and Evaluation report that providing beneficiaries with 
extended access to immunosuppressive drugs may reduce any associated 
costs they face from kidney failure, including maintaining labor force 
participation and improved quality of life.\42\
---------------------------------------------------------------------------

    \42\ Kadatz, M., Gill, J. S., Gill, J., Formica, R. N., and 
Klarenbach, S. (2019). Economic Evaluation of Extending Medicare 
Immunosuppressive Drug Coverage for Kidney Transplant Recipients in 
the Current Era. Journal of the American Society of Nephrology, 
31(1), 218-228. https://doi.org/10.1681/asn.2019070646. See https://aspe.hhs.gov/sites/default/files/migrated_legacy_files/189276/Savings_From_Extending_Coverage_For_Immunosuppressive_Drugs_Final.pdf
 from ASPE discussing cost benefits of extending drug coverage.
---------------------------------------------------------------------------

b. Costs
    Extending immunosuppressive drug coverage will pose an additional 
cost to Medicare to pay for the additional drugs, reduced by the 
savings associated with reduction in reversion to dialysis from graft 
failure. CMS actuaries estimate a net cost of $55 million to the 
Medicare program over the period 2022-2031. This estimate was provided 
by CMS actuaries, based on historical information from SSA. SSA's data 
shows that roughly 165,000 individuals had prior Medicare Part A 
coverage and had a kidney transplant between 2001 and 2019. Removing 
any individuals not currently alive or enrolled in Medicare Part A, 
within SSA's historical data approximately 52,000 individuals would 
remain potentially eligible to enroll in Part B-ID. In addition, CMS 
assumes approximately 1,000 individuals a month will be disenrolled 
from Medicare Part A 36 months after a successful transplant. After 
accounting for those individuals who are anticipated to have other 
coverage, and thus would not be eligible for the Part B-ID benefit, we 
assume that of those who were terminated from Part A after a successful 
transplant between 2001 and 2019, roughly 1,050 individuals would 
initially be enrolled in the Part B-ID benefit. Using similar 
assumptions about other coverage and those that are newly eligible for 
the benefit (roughly 12,000 individuals in a year), we assume an 
estimated growth of 250 enrollees each year thereafter. Beneficiaries 
will also incur potential costs associated with the premium associated 
with the additional benefit. For beneficiaries enrolled in MSPs for 
coverage of premiums and cost sharing of the Part B-ID benefit, States 
will incur premium and cost sharing costs for the benefit as well as 
costs associated with systems and other changes needed for reporting 
enrollment in these MSPs as described in further detail elsewhere in 
this document.
    The following table titled Part B-ID Benefit Costs and Savings 
Estimate demonstrates the year by year amounts, broken out by cost for 
drugs and savings.

                              Table 4--Part B-ID Benefit Costs and Savings Estimate
                                                 [in $ millions]
----------------------------------------------------------------------------------------------------------------
                                                  Savings due to
               FY                   Cost due to        saved        Total gross   Part B premium    Net impact
                                       drugs        transplants      benefits         offset
----------------------------------------------------------------------------------------------------------------
2022............................               0               0               0               0               0
2023............................               0               0               0               0               0
2024............................               5               0               5               0               5
2025............................               5               0               5               0               5
2026............................               5               0               5               0               5
2027............................               5               0               5               0               5
2028............................              10               0              10              -5               5

[[Page 66501]]

 
2029............................              10               0              10               0              10
2030............................              10               0              10               0              10
2031............................              15               0              15              -5              10
----------------------------------------------------------------------------------------------------------------

c. Effects of Medicare Saving Programs Coverage for Immunosuppressive 
Drugs
    As described previously, under section 402(f) of the CAA, we 
proposed to modify three MSP eligibility groups (QMB, SLMB, and QI) to 
pay premiums and, if applicable, cost sharing for low-income 
beneficiaries enrolled in the Part B-ID benefit (MSP Part B-ID). 
Individuals currently enrolled as QMBs, SLMBs, and QIs must meet income 
and resource requirements in addition to having entitlement to Medicare 
Part A. With this change, individuals may enroll in QMB, SLMB, and QI 
for the Part B-ID benefit if they are enrolled in the Part B-ID benefit 
and meet the underlying income and resource requirements for QMB, SLMB, 
or QI. While States pay Medicare Part A and B premiums and cost sharing 
for certain MSP eligibility groups, State payment for the MSP Part B-ID 
benefit is limited to Part B-ID benefit premiums and/or cost sharing.
    As discussed in more detail in section II.B.3 of this final rule, 
due to the limited scope of Part B-ID benefit entitlement and the 
income and resource eligibility limits for the MSP population, we 
anticipated enrollment in the MSP Part B-ID benefit mainly occurring in 
the 12 non-expansion States among individuals who qualify as QMBs, with 
about 250 people a year enrolling and 1,000 people enrolling initially. 
We estimated the cost of paying for the Part B-ID benefit for these 
individuals across all States was -$657,000 (1,250 x (State portion of 
premium (Part B-ID benefit premium ($1,200) x States' average FMAP 
rate) (1-0.562)) + State portion of Part B-ID benefit cost sharing (20 
percent of cost of CMS actuarial estimate of immunosuppressive drug 
therapy ($8,000 x 0.2) x States' average FMAP rate (1-0.562)-Medicaid 
drug rebate of 50 percent of cost of immunosuppressive drug therapy 
($8,000 x 0.5) x States' average FMAP rate (1-0.562). In sum, we 
estimated the drug rebate more than offsetting the State share of the 
Part B-ID benefit premium and cost sharing obligations, yielding a net 
savings for States.
    In addition to the liability for the Part B-ID benefit premium and 
cost sharing, we estimated States would need to perform the following 
tasks: (1) modify their systems to report MSP Part B-ID benefit 
enrollment on the Third Party Systems (TPS) files; (2) modify their 
internal systems to receive and process new values in existing fields 
for Part B-ID benefit enrollment in the MMA file, TPS, Territories and 
States Beneficiary Query (TBQ), T-MSIS, as well as on SSA's state data 
exchanges; (3) process the change in the premium from the Part B 
standard premium to the Part B-ID benefit premium in TPS for billing; 
(4) modify their process to query SSA systems to confirm Part B-ID 
benefit enrollment prior to enrolling in the MSP Part B-ID benefit; (5) 
adjust Medicaid eligibility systems to include new MSP Part B-ID 
benefit enrollment codes; and (6) adjust Medicaid pharmacy claims to 
include this new Part B-ID benefit crossover claim. We anticipated all 
States would need to make systems changes and test these systems 
changes 4-6 months prior to implementation.
    We estimated that it would take a maximum of 12 months of work 
(approximately 2,000 hours) by three computer programmers working 
$92.92/hr to make the necessary systems changes. Since we estimated 
that 50 states plus the District of Columbia (DC) \43\ will need to 
make a plan for system changes, we projected an aggregate burden of 
$12,510,748.8 (51 (50 States and DC) * 2,000 hr * $92.92/hr * 3 * 
States' average FMAP rate). We noted that the cost and time 
attributable to these systems change would be influenced by whether the 
state is implementing other systems changes at the same time and their 
current Medicaid Management Information System (MMIS) system 
functionality. Assuming the state implements this change in isolation, 
we estimated that this change could take 12 months. However, if a State 
makes this change as a part of a broader systems update, the work 
specific to the proposal could be less burdensome.
---------------------------------------------------------------------------

    \43\ We note that we did not estimate impacts for the 
territories because currently, they have not elected MSP coverage 
for their residents. As such, they would not need to make these 
changes.
---------------------------------------------------------------------------

    We did not receive any comments on these estimates and are 
finalizing as proposed.
3. Simplifying Regulations Related to Medicare Enrollment Forms
    We are revising Sec. Sec.  406.7 and 407.11 to remove references to 
specific enrollment forms that are used to apply for entitlement under 
Medicare Part A and enrollment under Medicare Part B. This is an 
administrative change that will not impact the use of the forms. We do 
not anticipate a change in burden or cost associated with each of the 
forms.
4. Modernizing State Payment of Medicare Premiums Benefits, Costs, and 
Transfers
    To modernize State payment of Medicare premiums, we proposed 
several changes to regulations at Sec. Sec.  400.200, 406.21, 406.26, 
407.40 through 48, and 431.625. We also proposed to add new Sec. Sec.  
435.123 through 435.126 and to revise Sec.  435.4. Almost all of the 
proposed changes were to update the regulations to reflect statutory 
changes over the last 3-plus decades, and to codify certain 
administrative practices that have evolved over the years. Some of the 
most significant changes included replacing obsolete decades-old stand-
alone buy-in agreements with treating buy-in provisions in the State 
plan as the State's buy-in agreement, and limiting retroactive Medicare 
Part B premium liability for States for full-benefit dually eligible 
beneficiaries. We did not project any impact for these provisions in 
this Regulatory Impact Analysis section because our proposals were 
consistent with current requirements and practice.
    We did not receive any comments on these estimates and are 
finalizing as proposed.

D. Regulatory Review Cost Estimation

    If regulations impose administrative costs on private entities, 
such as the time needed to read and interpret this final rule, we 
should estimate the cost associated with regulatory review. Due

[[Page 66502]]

to the uncertainty involved with accurately quantifying the number of 
entities that will review the rule, we assume that the total number of 
unique commenters on the proposed rule will be the number of reviewers 
of this final rule. We acknowledge that this assumption may understate 
or overstate the costs of reviewing this rule. It is possible that not 
all commenters reviewed the proposed rule in detail, and it is also 
possible that some reviewers chose not to comment on the proposed rule. 
We welcomed any public comments on the approach in estimating the 
number of entities that would review the proposed rule. We did not 
receive any public comments specific to our solicitation.
    We also recognize that different types of entities are in many 
cases affected by mutually exclusive sections of the proposed rule, and 
therefore for the purposes of our estimate we assumed that each 
reviewer reads approximately 50 percent of the rule. We sought public 
comments on this assumption. We did not receive any public comments 
specific to our solicitation.
    Using the wage information from the BLS for medical and health 
service managers (Code 11-9111), we estimate that the cost of reviewing 
this rule is $115.22/hr, including overhead and fringe benefits 
(https://www.bls.gov/oes/current/oes_nat.htm). Assuming an average 
reading speed, we estimate that it will take approximately 0.5 hours 
for the staff to review half of this final rule. For each entity that 
reviews the rule, the estimated cost is $57.61 (0.5 hours x $115.22/
hr). Therefore, we estimate that the total cost of reviewing this rule 
is $4,032.70 ($57.61 x 70) [70 is the number of estimated reviewers].

E. Alternatives Considered

    As noted previously, there were a number of additional SEPs that 
were considered but were not pursued for various reasons (discussed in 
greater length in section II.A.2.f of the preamble). For example, we 
considered an SEP for individuals who previously decided not to enroll 
in Medicare but now want to enroll outside of the GEP or other 
enrollment period because they are experiencing a health event and want 
Medicare coverage. We also considered an SEP for individuals who lost 
Medicare coverage solely due to non-payment of premiums who are not 
eligible for another SEP or equitable relief and now want to re-enroll 
outside of the GEP.
    In addition, we considered finalizing the SEPs as proposed rather 
than making the changes based on comments in this final rule. 
Specifically, we considered keeping the SEP for individuals impacted by 
an emergency or disaster to only apply if the individual themselves 
were impacted rather than allowing them to qualify if they are 
prevented from enrolling in Medicare because the person who helps them 
make health care decisions resides in area where there is a federal, 
state, or local disaster declaration. In addition, we considered 
finalizing the SEP for Health Plan or Employer Error as proposed rather 
than modifying it to allow an individual to qualify for the SEP if they 
received erroneous or misinformation from agents and brokers in 
addition to health plans and employers and to provide a written 
attestation of the error. Finally, we considered maintaining the 6-
month duration for the SEP for Formerly Incarcerated Individuals rather 
than changing the duration to 12 months and not allowing the option to 
choose retroactive or prospective coverage. Had we finalized these SEPs 
as proposed, we estimate that slightly fewer individuals would be able 
to enroll using the exceptional conditions SEPs, as each of the changes 
in this final rule will ease access to the SEPs either through 
increasing the timeframe or opportunities to qualify for the SEPs.
    Further, we proposed several alternatives to the State payment of 
Medicare premium policies and technical changes, which are described at 
87 FR 25112 through 25122. For example, we considered alternatives to 
further reduce the number of Part B buy-in groups from three to two and 
to limit buy-in liability for States in other situations in which 
Medicare benefits are not available, such as incarceration and 
beneficiaries who reside overseas. In addition, we considered proposing 
limits on State premium liability for time periods longer or shorter 
than 36 months, including a range from 24 to 60 months. Based on CMS 
data from 2022, an average of about 147,000 Medicaid beneficiaries are 
newly enrolled in Part B buy-in each month. Over a 6-month period, an 
average of 2,244 Medicaid beneficiaries per month were retroactively 
enrolled in Part B buy-in for more than 12 months, 1,138 were 
retroactively enrolled for more than 24 months, 720 were retroactively 
enrolled for more than 36 months, 517 were retroactively enrolled for 
more than 48 months, and 393 were retroactively enrolled for more than 
60 months.

D. Accounting Statement and Table

    As required by OMB Circular A-4 (available at https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf), we have prepared an accounting statement in 
Table 5 showing the classification of the impact associated with the 
provisions of this final rule.

                                          Table 5--Accounting Statement
                                                 [in $ millions]
----------------------------------------------------------------------------------------------------------------
                                        Estimate at 7%  Estimate at 3%
               Category                    (in 2022        (in 2022         Period        Affected stakeholders
                                           dollars)        dollars)
----------------------------------------------------------------------------------------------------------------
Annualized Monetized Savings..........              $0              $0       2022-2031  Federal government,
                                                                                         States.
Annualized Monetized Cost.............            0.39            0.06       2022-2031  Federal government,
                                                                                         States.
----------------------------------------------------------------------------------------------------------------

    This final rule is subject to the Congressional Review Act 
provisions of the Small Business Regulatory Enforcement Fairness Act of 
1996 (5 U.S.C. 801 et seq.) and has been transmitted to the Congress 
and the Comptroller General for review.
    Chiquita Brooks-LaSure, Administrator of the Centers for Medicare & 
Medicaid Services, approved this document on October 17, 2022.

List of Subjects

42 CFR Part 400

    Grant programs-health, Health facilities, Health maintenance 
organizations (HMO) Medicaid,

[[Page 66503]]

Medicare Reporting, and recordkeeping requirements.

42 CFR Part 406

    Health facilities, Diseases, and Medicare.

42 CFR Part 407

    Medicare.

42 CFR Part 408

    Medicare.

42 CFR Part 410

    Diseases, Health facilities, Health professions, Laboratories, 
Medicare, Reporting and, recordkeeping requirements, Rural areas, X-
rays.

42 CFR Part 423

    Administrative practice and procedure, Emergency medical services, 
Health facilities, Health maintenance organizations (HMO), Health 
professionals, Medicare, Penalties, Privacy, Reporting and 
recordkeeping requirements.

42 CFR Part 431

    Grant programs-health, Health facilities, Medicaid, Privacy, 
Reporting and recordkeeping requirements.

42 CFR Part 435

    Aid to Families with Dependent Children, Grant programs-health, 
Medicaid, Reporting and recordkeeping requirements, Supplemental 
Security Income (SSI), and Wages.
    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services amends 42 CFR chapter IV as set forth below:

PART 400--INTRODUCTION; DEFINITIONS

0
1. Effective January 1, 2023, the authority citation for part 400 is 
revised to read as follows:

    Authority:  42 U.S.C. 1302 and 1395hh and 44 U.S.C. Chapter 35.

0
2. Effective January 1, 2023, Sec.  400.200 is amended by--
0
a. Adding a definition for ``Medicare Savings Programs'' in 
alphabetical order;
0
b. Revising the definition of ``Qualified Medicare Beneficiary''; and
0
c. Adding definitions for ``Qualifying Individual'' in alphabetical 
order and ``Specified Low-Income Medicare Beneficiary'' in alphabetical 
order.

    The additions and revision read as follows:


Sec.  400.200   General definitions.

* * * * *
    Medicare Savings Programs (MSPs) has the same meaning described in 
Sec.  435.4 of this chapter.
* * * * *
    Qualifying Individual (QI) means an individual described in Sec.  
435.125 of this chapter.
    Qualified Medicare Beneficiary (QMB) means an individual described 
in Sec.  435.123 of this chapter.
* * * * *
    Specified Low-Income Medicare Beneficiary (SLMB) means an 
individual described in Sec.  435.124 of this chapter.
* * * * *

PART 406--HOSPITAL INSURANCE ELIGIBILITY AND ENTITLEMENT

0
3. Effective January 1, 2023, the authority citation for part 406 is 
revised to read as follows:

    Authority:  42 U.S.C. 1302, 1395i-2, 1395i-2a, 1395p, 1395q and 
1395hh.

0
4. Effective January 1, 2023, Sec.  406.7 is revised to read as 
follows:


Sec.  406.7   Forms to apply for entitlement under Medicare Part A.

    Forms used to apply for Medicare entitlement are available free of 
charge by mail from CMS or at any Social Security branch or district 
office or online at the CMS and SSA websites. An individual who files 
an application for monthly social security cash benefits as defined in 
Sec.  400.200 of this chapter also applies for Medicare entitlement if 
he or she is eligible for hospital insurance at that time.

0
5. Effective January 1, 2023, Sec.  406.13 is amended by revising 
paragraph (f)(2) to read as follows:


Sec.  406.13   Individual who has end-stage renal disease.

* * * * *
    (f) * * *
    (2) The end of the 36th month after the month in which the 
individual received a kidney transplant. Beginning January 1, 2023, an 
individual who is no longer entitled to Part A benefits due to this 
paragraph may be eligible to enroll in Part B solely for purposes of 
coverage of immunosuppressive drugs as described in Sec.  407.55 of 
this subchapter.
* * * * *

0
6. Effective January 1, 2023, Sec.  406.21 is amended by revising 
paragraphs (a) and (c)(3) to read as follows:


Sec.  406.21   Individual enrollment.

    (a) Basic provision. An individual who meets the requirements of 
Sec.  406.20(b) or (c), except as provided in Sec.  406.26(b)(2), may 
enroll for premium hospital insurance only during his or her--
    (1) Initial enrollment period as set forth in paragraph (b) of this 
section;
    (2) A general enrollment period as set forth in paragraph (c) of 
this section;
    (3) A special enrollment period as set forth in Sec. Sec.  406.24, 
406.25, and 406.27; or
    (4) For HMO/CMP enrollees, a transfer enrollment period as set 
forth in paragraph (f) of this section.
* * * * *
    (c) * * *
    (3) If the individual enrolls or reenrolls during a general 
enrollment period--
    (i) Before January 1, 2023, his or her entitlement begins on July 1 
of the calendar year; or
    (ii) On or after January 1, 2023, his or her entitlement begins on 
the first day of the month after the month of enrollment.
* * * * *

0
7. Effective January 1, 2023, Sec.  406.22 is amended by--
0
a. Removing the phrase ``age 65, the following rules apply:'' and 
adding in its place the phrase ``age 65, before January 1, 2023, the 
following rules apply:'' in paragraph (a) introductory text;
0
b. Redesignating paragraph (b) as paragraph (c);
0
c. Adding a new paragraph (b);
0
d. Revising newly redesignated paragraph (c) introductory text; and
0
e. Adding paragraph (d).

    The additions and revision read as follows:


Sec.  406.22  Effect of month of enrollment on entitlement.

* * * * *
    (b) Individual age 65 or over. For an individual who has attained 
age 65 on or after January 1, 2023, the following rules apply:
    (1) If the individual enrolls during the first 3 months of their 
initial enrollment period, entitlement begins with the first month of 
eligibility.
    (2) If an individual enrolls during the last 4 months of their 
initial enrollment period, entitlement begins with the month following 
the month of enrollment.
    (c) Individual under age 65. For an individual who has not attained 
age 65 and who satisfies the requirements of Sec.  406.20(c) before 
January 1, 2023, the following rules apply:
* * * * *
    (d) Individual under age 65. For an individual who has not attained 
age 65 and who first satisfies the requirements of Sec.  406.20(c) on 
or after January 1, 2023, the following rules apply:
    (1) For individuals who enroll during the first 3 months of their 
IEP,

[[Page 66504]]

entitlement begins with the first month of eligibility.
    (2) If an individual enrolls during the month in which they first 
become eligible or any subsequent month of their IEP, entitlement 
begins with month following the month of enrollment.

0
8. Effective January 1, 2023, Sec.  406.26 is amended by adding 
paragraph (a)(3) and revising paragraph (b)(2) to read as follows:


Sec.  406.26  Enrollment under State buy-in.

    (a) * * *
    (3) Enrollment without discrimination. A State that has a buy-in 
agreement in effect must enroll in premium health insurance any 
applicant who meets the eligibility requirement for the QMB eligibility 
group, with the State paying the premiums on the individual's behalf.
    (b) * * *
    (2) The first month in which the individual is entitled to premium 
hospital insurance under Sec.  406.20(b) and has QMB status. Under a 
State buy-in agreement, as defined in Sec.  407.40 of this subchapter, 
QMB-eligible individuals can enroll in premium hospital insurance at 
any time of the year, without regard to Medicare enrollment periods.
* * * * *

0
9. Effective January 1, 2023, Sec.  406.27 is added to read as follows:


Sec.  406.27  Special enrollment periods for exceptional conditions.

    (a) General rule. Beginning January 1, 2023, in accordance with the 
Secretary's authority in sections 1837(m) and 1838(g) of the Act, the 
following SEPs, as defined under Sec.  406.24(a)(4), are provided for 
individuals that missed a Medicare enrollment period, (as specified in 
Sec.  406.21, Sec.  406.24, or Sec.  406.25), due to exceptional 
conditions as determined by the Secretary and established under 
paragraphs (b) through (f) of this section. SEPs are provided for 
exceptional conditions that took place on or after January 1, 2023 
except as specified in paragraph (e) of this section.
    (b) Special enrollment period for individuals impacted by an 
emergency or disaster. An SEP exists for individuals prevented from 
submitting a timely Medicare enrollment request by an emergency or 
disaster declared by a Federal, State, or local government entity.
    (1) SEP parameters. An individual is eligible for the SEP if they 
(or their SSA-authorized representative as defined at 42 CFR 405.910), 
their legal guardian, or person who makes healthcare decisions on 
behalf of that individual reside (or resided) in an area for which a 
Federal, State or local government entity newly declared a disaster or 
other emergency. The individual (or the individual's authorized 
representative, legal guardian, or person who makes healthcare 
decisions on behalf of that individual) must demonstrate that they 
reside (or resided) in the area during the period covered by that 
declaration.
    (2) SEP duration. The SEP begins on the earlier of the date an 
emergency or disaster is declared or, if different, the start date 
identified in such declaration. The SEP ends 6 months after the end 
date identified in the declaration, the end date of any extensions or 
the date when the declaration has been determined to have ended or has 
been revoked, if applicable.
    (3) Entitlement. Entitlement begins the first day of the month 
following the month of enrollment, so long as the date is on or after 
January 1, 2023.
    (c) Special enrollment period for individuals affected by a health 
plan or employer misrepresentation. An SEP exists for individuals whose 
non-enrollment in premium Part A is unintentional, inadvertent, or 
erroneous and results from misrepresentation or reliance on incorrect 
information provided by the individual's employer or GHP, agents or 
brokers of health plans, or any person authorized to act on behalf of 
such entity.
    (1) SEP parameters. An individual is eligible for the SEP if they 
can demonstrate (by documentation or written attestation) both of the 
following:
    (i) He or she did not enroll in premium Part A during another 
enrollment period in which they were eligible based on information 
received from an employer or GHP, agents or brokers of health plans, or 
any person authorized to act on such organization's behalf.
    (ii) An employer, GHP, agent or broker of a health plan, or their 
representative materially misrepresented information or provided 
incorrect information relating to enrollment in premium Part A.
    (2) SEP duration. This SEP begins the day the individual notifies 
SSA of the employer or GHP misrepresentation and ends 6 months later.
    (3) Entitlement. Entitlement begins the first day of the month 
following the month of enrollment, so long as the date is on or after 
January 1, 2023.
    (d) SEP for formerly incarcerated individuals. An SEP exists for 
Medicare eligible individuals who are released from the custody of 
penal authorities as described in Sec.  411.4(b) of this subchapter on 
or after January 1, 2023.
    (1) SEP parameters. An individual is eligible for this SEP if they 
demonstrate that they are eligible for Medicare and failed to enroll or 
reenroll in Medicare premium Part A due to being in custody of penal 
authorities and there is a record of release either through discharge 
documents or data available to SSA.
    (2) SEP duration. The SEP starts the day of the individual's 
release from the custody of penal authorities and ends the last day of 
the 12th month after the month in which the individual is released from 
the custody of penal authorities.
    (3) Entitlement--(i) General rule. Entitlement begins the first day 
of the month following the month of enrollment, so long as the date is 
on or after January 1, 2023.
    (ii) Special rule. An individual has the option of requesting 
entitlement retroactive to the month of their release from 
incarceration provided the individual pays the monthly premiums for the 
period of coverage (as required under Sec.  406.31). The retroactive 
period cannot exceed 6 months.
    (e) Special enrollment period for termination of Medicaid coverage. 
An SEP exists for individuals whose Medicaid eligibility is terminated.
    (1) SEP parameters. An individual is eligible for this SEP if they 
can demonstrate that--
    (i) They are eligible for premium Part A under Sec.  406.5(b); and
    (ii) Their Medicaid eligibility is terminated on or after January 
1, 2023, or is terminated after the last day of the Coronavirus Disease 
2019 public health emergency (COVID-19 PHE) as determined by the 
Secretary, whichever is earlier.
    (2) SEP duration. If the termination of Medicaid eligibility 
occurs--
    (i) After the last day of the COVID-19 PHE and before January 1, 
2023, the SEP starts on January 1, 2023 and ends on June 30, 2023.
    (ii) On or after January 1, 2023, the SEP starts when the 
individual is notified of termination of Medicaid eligibility and ends 
6 months after the termination of eligibility.
    (3) Entitlement--(i) General rule. Entitlement begins the first day 
of the month following the month of enrollment, so long as the date is 
after the last day of the COVID-19 PHE or on after January 1, 2023, 
whichever is earlier.
    (ii) Special COVID-19 PHE rule. An individual whose Medicaid 
eligibility is terminated after the end of the COVD-19 PHE, but before 
January 1, 2023 (if applicable), has the option of requesting

[[Page 66505]]

that entitlement begin back to the first of the month following 
termination of Medicaid eligibility provided the individual pays the 
monthly premiums for the period of coverage (as required under Sec.  
406.31).
    (iii) Other special rule. After January 1, 2023, an individual has 
the option of requesting entitlement for a retroactive period back to 
the date of termination from Medicaid provided the individual pays the 
monthly premiums for the period of coverage (as required under Sec.  
406.31).
    (4) Effect on previously accrued late enrollment penalties. 
Individuals who otherwise would be eligible for this SEP, but enrolled 
during the COVID-19 PHE prior to January 1, 2023, are eligible to have 
late enrollment penalties collected under Sec.  406.32(d) reimbursed 
and ongoing penalties removed.
    (f) Special enrollment period for other exceptional conditions. An 
SEP exists for other exceptional conditions as CMS may provide.
    (1) SEP parameters. An individual is eligible for the SEP if both 
of the following apply:
    (i) The individual demonstrates that they missed an enrollment 
period in which they were eligible because of an event or circumstance 
outside of the individual's control which prevented them from enrolling 
in premium Part A.
    (ii) It is determined that the conditions were exceptional in 
nature.
    (2) SEP duration. The SEP duration is determined on a case-by-case 
basis, but will be no less than 6 months.
    (3) Entitlement. Entitlement begins the first day of the month 
following the month of enrollment, so long as the date is on or after 
January 1, 2023.

0
10. Effective January 1, 2023, Sec.  406.33 is amended by--
0
a. Revising paragraph (a) introductory text;
0
b. Redesignating paragraph (c) as paragraph (d); and
0
c. Adding new paragraph (c).

    The revision and addition read as follows:


Sec.  406.33  Determination of months to be counted for premium 
increase: Enrollment.

    (a) Enrollment before April 1, 1981 or after September 30, 1981 and 
before January 1, 2023. The months to be counted for premium increase 
are the months from the end of the initial enrollment period through 
the end of the general enrollment period, the special enrollment 
period, or the transfer enrollment period in which the individual 
enrolls, excluding the following:
* * * * *
    (c) Enrollment on or after January 1, 2023. The months to be 
counted for premium increase are the months from the end of the initial 
enrollment period through the end of the month in which the individual 
enrolls, excluding both of the following:
    (1) The months described in paragraphs (a)(1) through (6) of this 
section.
    (2) Any months of non-coverage in accordance with an individual's 
use of an exceptional conditions SEP under Sec.  406.27 provided the 
individual enrolls within the duration of the SEP.
* * * * *

0
11. Effective January 1, 2023, Sec.  406.34 is amended by--
0
a. Revising paragraph (a) introductory text;
0
b. Redesignating paragraph (e) as paragraph (f); and
0
c. Adding new paragraph (e).

    The revision and addition read as follows:


Sec.  406.34  Determination of months to be counted for premium 
increase: Reenrollment.

    (a) First reenrollment before April 1, 1981 or after September 30, 
1981 and before January 1, 2023. The months to be counted for premium 
increase are:
* * * * *
    (e) Reenrollments on or after January 1, 2023. (1) The months to be 
counted for premium increase are as follows:
    (i) The months specified in Sec.  406.33(c).
    (ii) The months specified in paragraphs (b) and (d) of this section 
(if applicable).
    (iii) The months from the end of the first period of entitlement 
through the end of the month during the general enrollment period in 
which the individual reenrolled.
    (2) The months excluded from premium increase are the months of 
non-coverage in accordance with an individual's use of an exceptional 
conditions SEP under Sec.  406.27, provided the individual enrolls 
within the duration of the SEP.
* * * * *

PART 407--SUPPLEMENTARY MEDICAL INSURANCE (SMI) ENROLLMENT AND 
ENTITLEMENT

0
12. Effective January 1, 2023, the authority citation for part 407 is 
revised to read as follows:

    Authority:  42 U.S.C. 1302, 1395p, 1395q, and 1395hh.

0
13. Effective January 1, 2023, Sec.  407.1 is amended by adding 
paragraph (a)(6) and revising paragraph (b) to read as follows:


Sec.  407.1  Basis and scope.

    (a) * * *
    (6) Sections 1836(b) and 1837(n) of the Act provide for coverage of 
immunosuppressive drugs as described in section 1861(s)(2)(J) of the 
Act under Part B beginning on or after January 1, 2023, for eligible 
individuals whose benefits under Medicare Part A and eligibility to 
enroll in Part B on the basis of ESRD would otherwise end with the 36th 
month after the month in which the individual receives a kidney 
transplant by reason of section 226A(b)(2) of the Act.
    (b) Scope. This part sets forth the eligibility, enrollment, and 
entitlement requirements and procedures for the following:
    (1) Supplementary medical insurance. (The rules about premiums are 
in part 408 of this chapter.)
    (2) The immunosuppressive drug benefit provided for under sections 
1836(b) and 1837(n) of the Act, hereinafter referred to as the Part B-
Immunosuppressive Drug Benefit (Part B-ID).

0
14. Effective January 1, 2023, Sec.  407.11 is revised to read as 
follows:


Sec.  407.11  Forms used to apply for enrollment under Medicare Part B.

    Forms used to apply for enrollment under the supplementary medical 
insurance program are available free of charge by mail from CMS, or at 
any Social Security branch or district office and online at the CMS and 
SSA websites. As an alternative, the individual may request enrollment 
by signing a simple statement of request, if he or she is eligible to 
enroll at that time.

0
15. Effective January 1, 2023, Sec.  407.23 is added to read as 
follows:


Sec.  407.23  Special enrollment periods for exceptional conditions.

    (a) General rule: Beginning January 1, 2023, in accordance with the 
Secretary's authority in sections 1837(m) and 1838(g) of the Act, the 
following SEPs, as defined under Sec.  406.24(a)(4) of this subchapter, 
are provided for individuals who missed a Medicare enrollment period 
(as specified in Sec.  407.21, Sec.  407.15 or Sec.  407.20 of this 
subchapter) due to exceptional conditions as determined by the 
Secretary and established under paragraphs (b) through (f) of this 
section. SEPs are provided for exceptional conditions that took place 
on or after January 1, 2023 except as specified in paragraph (e) of 
this section.
    (b) Special enrollment period for individuals impacted by an 
emergency or disaster. An SEP exists for

[[Page 66506]]

individuals prevented from submitting a timely Medicare enrollment 
request by an emergency or disaster declared by a Federal, State, or 
local government entity.
    (1) SEP parameters. An individual is eligible for the SEP if they 
(or their SSA-authorized representative as defined at 42 CFR 405.910), 
their legal guardian, or the person who makes healthcare decisions on 
behalf of that individual, reside (or resided) in an area for which a 
Federal, State or local government entity newly declared a disaster or 
other emergency. The individual (or the individual's authorized 
representative, legal guardian, or the person who makes healthcare 
decisions on behalf of that individual) must demonstrate that they 
reside (or resided) in the area during the period covered by that 
declaration.
    (2) SEP duration. The SEP begins on the earlier of the date an 
emergency or disaster is declared or, if different, the start date 
identified in such declaration. The SEP ends 6 months after the end 
date identified in the declaration, the end date of any extensions or 
the date when the declaration has been determined to have ended or has 
been revoked, if applicable.
    (3) Entitlement. Entitlement begins the first day of the month 
following the month of enrollment, so long as the date is on or after 
January 1, 2023.
    (c) Special enrollment period for individuals affected by a health 
plan or employer misrepresentation. An SEP exists for individuals whose 
non-enrollment in SMI is unintentional, inadvertent, or erroneous and 
results from misrepresentation or reliance on incorrect information 
provided by the individual's employer or GHP, agents or brokers of 
health plans, or any person authorized to act on behalf of such entity.
    (1) SEP parameters. An individual is eligible for the SEP if they 
can demonstrate (by documentation or written attestation) the both of 
the following:
    (i) He or she did not enroll in SMI during another enrollment 
period in which they were eligible based on information received from 
an employer or GHP, agents or brokers of health plans, or any person 
authorized to act on such organization's behalf.
    (ii) An employer, GHP, agent or broker of a health plan, or their 
representative materially misrepresented information or provided 
incorrect information relating to enrollment in SMI.
    (2) SEP duration. This SEP begins the day the individual notifies 
SSA of the employer or GHP misrepresentation, or the incorrect 
information provided and ends 6 months later.
    (3) Entitlement. Entitlement begins the first day of the month 
following the month of enrollment, so long as the date is on or after 
January 1, 2023.
    (d) SEP for formerly incarcerated individuals. An SEP exists for 
Medicare eligible individuals who are released from the custody of 
penal authorities as described in Sec.  411.4(b) of this subchapter on 
or after January 1, 2023.
    (1) SEP parameters. An individual is eligible for this SEP if they 
demonstrate that they are eligible for Medicare and failed to enroll or 
reenroll in SMI due to being in custody of penal authorities, and there 
is a record of release either through discharge documents or data 
available to SSA.
    (2) SEP duration. The SEP starts the day of the individual's 
release from the custody of penal authorities and ends the last day of 
the 12th month after the month in which the individual is released from 
the custody of penal authorities.
    (3) Entitlement--(i) General rule. Entitlement begins the first day 
of the month following the month of enrollment, so long as the date is 
on after January 1, 2023.
    (ii) Special rule. An individual has the option of requesting 
entitlement for a retroactive period of up to 6 months provided the 
date does not precede release from incarceration and the individual 
pays the monthly premiums for the period of coverage (as required under 
Sec.  406.31). If the application is filed within the first 6 months of 
the SEP, the effective date is retroactive to the date of their release 
from incarceration. If the application is filed in the last 6 months of 
the SEP, the coverage effective date is retroactive to 6 months after 
the date of release from incarceration.
    (e) Special enrollment period for termination of Medicaid coverage. 
An SEP exists for individuals whose Medicaid eligibility is terminated.
    (1) SEP parameters. An individual is eligible for this SEP if they 
can demonstrate that--
    (i) They are eligible for Part B under Sec.  407.4(a); and
    (ii) Their Medicaid eligibility is being terminated on or after 
January 1, 2023, or after the last day of the Coronavirus Disease 2019 
public health emergency (COVID-19 PHE) as determined by the Secretary, 
whichever is earlier.
    (2) SEP duration. If the termination of Medicaid eligibility 
occurs--
    (i) After the last day of the COVID-19 PHE and before January 1, 
2023, the SEP starts on January 1, 2023 and ends on June 30, 2023.
    (ii) On or after January 1, 2023, the SEP starts when the 
individual is notified of termination of Medicaid eligibility and ends 
6 months after the termination of eligibility.
    (3) Entitlement--(i) General rule. Entitlement begins the first day 
of the month following the month of enrollment, so long as the date is 
the month following the last month of the COVID-19 PHE or on or after 
January 1, 2023, whichever is earlier.
    (ii) Special COVID-19 PHE rule. An individual whose Medicaid 
eligibility is terminated after the end of the COVD-19 PHE, but before 
January 1, 2023 (if applicable), has the option of requesting that 
entitlement begin back to the first of the month following termination 
of Medicaid eligibility provided the individual pays the monthly 
premiums for the period of coverage (as required under part 408 of this 
subchapter).
    (iii) Other special rule. After January 1, 2023, an individual has 
the option of requesting entitlement for a retroactive period back to 
the date of termination from Medicaid provided the individual pays the 
monthly premiums for the period of coverage (as required under Sec.  
406.31 of this subchapter).
    (4) Effect on previously accrued late enrollment penalties. 
Individuals who otherwise would be eligible for this SEP, but enrolled 
during the COVID-19 PHE prior to January 1, 2023, are eligible to have 
late enrollment penalties collected under Sec.  408.22 of this 
subchapter reimbursed and ongoing penalties removed.
    (f) Special enrollment period for other exceptional conditions. An 
SEP exists for other exceptional conditions as CMS may provide.
    (1) SEP parameters. An individual is eligible for the SEP if both 
of the following apply:
    (i) The individual demonstrates that they missed an enrollment 
period in which they were eligible because of an event or circumstance 
outside of the individual's control which prevented them from enrolling 
in SMI.
    (ii) It is determined that the conditions were exceptional in 
nature.
    (2) SEP duration. The SEP duration is determined on a case by case 
basis, but will be no less than 6 months.
    (3) Entitlement. Entitlement begins the first day of the month 
following the month of enrollment, so long as the date is on or after 
January 1, 2023.

0
16. Effective January 1, 2023, Sec.  407.25 is amended by revising 
paragraphs (a) and (b)(1) and (3) to read as follows:


Sec.  407.25  Beginning of entitlement: Individual enrollment.

* * * * *

[[Page 66507]]

    (a) Enrollment during initial enrollment period. For individuals 
who first meet the eligibility requirements of Sec.  407.10 in a month 
beginning--
    (1) Before January 1, 2023, the following entitlement dates apply:
    (i) If an individual enrolls during the first 3 months of the 
initial enrollment period, entitlement begins with the first month of 
eligibility.
    (ii) If an individual enrolls during the fourth month of the 
initial enrollment period, entitlement begins with the following month.
    (iii) If an individual enrolls during the fifth month of the 
initial enrollment period, entitlement begins with the second month 
after the month of enrollment.
    (iv) If an individual enrolls in either of the last 2 months of the 
initial enrollment period, entitlement begins with the third month 
after the month of enrollment.
    (v) For example, if an individual first meets the eligibility 
requirements for enrollment in April, then the individual's initial 
enrollment period is January through July. The month in which the 
individual enrolls determines the month that begins the period of 
entitlement, as follows:

                     Table 1 to Paragraph (a)(1)(v)
------------------------------------------------------------------------
 Enrolls in initial enrollment  period       Entitlement begins on--
------------------------------------------------------------------------
January................................  April 1 (month eligibility
                                          requirements first met).
February...............................  April 1.
March..................................  April 1.
April..................................  May 1 (month following month of
                                          enrollment).
May....................................  July 1 (second month after
                                          month of enrollment).
June...................................  September 1 (third month after
                                          month of enrollment).
July...................................  October 1 (third month after
                                          month of enrollment).
------------------------------------------------------------------------

    (2) On or after January 1, 2023, the following entitlement dates 
apply:
    (i) If an individual enrolls during the first 3 months of the 
initial enrollment period, entitlement begins with the first month of 
eligibility.
    (ii) If an individual enrolls during the last 4 months of the 
initial enrollment period, entitlement begins with the month following 
the month in which they enroll.
    (b) * * *
    (1) If an individual enrolls or reenrolls during a general 
enrollment period before April 1, 1981, or after September 30, 1981 and 
before January 1, 2023, entitlement begins on July 1 of that calendar 
year.
* * * * *
    (3) If an individual enrolls or reenrolls during a general 
enrollment period on or after January 1, 2023, entitlement begins on 
the first day of the month following the month in which they enroll.
* * * * *

0
17. Effective January 1, 2023, Sec.  407.40 is amended--
0
a. By ading paragraphs (a)(6) through (10);
0
b. By revising paragraph (b) introductory text;
0
c. In paragraph (b) by--
0
i. Adding a definition for ``1634 State'' in alphanumerical order;
0
ii. Revising the definition of ``AFDC'';
0
iii. Adding a definition for ``Buy-in group'' in alphabetical order;
0
iv. Redesignating the definition of ``Cash assistance'' in alphabetical 
order;
0
v. Removing the definition of ``Qualified Medicare Beneficiary'';
0
vi. Redesignating the definition of ``Railroad retirement beneficiary'' 
in alphabetical order; and
0
vii. Revising the definition of ``State buy-in agreement or buy-in 
agreement'';
0
d. By revising paragraph (c)(1); and
0
e. By adding paragraphs (c)(5) and (6).
    The additions and revisions read as follows:


Sec.  407.40  Enrollment under a State buy-in agreement.

    (a) * * *
    (6) Section 4501 of the Omnibus Budget Reconciliation Act of 1990 
(Pub. L. 101-508) established the Specified Low-Income Medicare 
Beneficiary or SLMB eligibility group effective January 1993.
    (7) Section 4732 of the Balanced Budget Act of 1997 (Pub. L. 105-
33) established the Qualifying Individual or QI eligibility group 
effective January 1998.
    (8) Section 112 of the Medicare Improvements for Patients and 
Providers Act of 2008 (Pub. L. 110-275) increased the resource standard 
for QMB, SLMB, and QI to 3 times the maximum resources available under 
the Supplemental Security Income program, adjusted annually by 
increases in the Consumer Price Index effective January 1, 2010.
    (9) Title II, section 211, of the Medicare Access and CHIP 
Reauthorization Act (Pub. L. 114-10), effective April 16, 2015, 
permanently extended the QI eligibility group.
    (10) Title II, section 402 of the Consolidated Appropriations Act 
of 2021 (Pub. L. 116-260), effective January 1, 2023, expands QMB, 
SLMB, and QI to cover individuals who are enrolled in Medicare Part B 
for coverage of immunosuppressive drugs.
    (b) Definitions. As used in this subpart, unless the context 
indicates otherwise--
    1634 State means a State that has an agreement with SSA, in 
accordance with section 1634 of the Act, for SSA to determine Medicaid 
eligibility on behalf of the State for individuals residing in the 
State whom the SSA has determined eligible for SSI.
* * * * *
    AFDC stands for aid to families with dependent children under Part 
A of title IV of the Act, as it was in effect on July 16, 1996.
* * * * *
    Buy-in group means a coverage group described in section 1843 of 
the Act that is identified by the State and is composed of multiple 
Medicaid eligibility groups specified in the buy-in agreement.
* * * * *
    State buy-in agreement or buy-in agreement means an agreement 
authorized or modified by section 1843 or 1818(g) of the Act, under 
which a State secures Part B or premium Part A coverage for individuals 
who are members of the buy-in group specified in the agreement, by 
enrolling them and paying the premiums on their behalf. A State's 
submission of a State plan amendment addressing its buy-in process, if 
approved by CMS, constitutes the ``buy-in agreement'' between the State 
and CMS for purposes of sections 1843 and 1818(g) of the Act.
    (c) * * *
    (1) A State that has a buy-in agreement in effect must enroll any 
individual who is eligible to enroll in SMI under Sec.  407.10 and who 
is a member of the buy-in group, with the State paying the premiums on 
the individual's behalf. Individuals enrolled in the buy-in group can 
enroll in Part B at any time of the year, without regard to Medicare 
enrollment periods.
* * * * *
    (5) In a 1634 State, CMS enrolls SSI beneficiaries in Medicare Part 
B, on behalf of the State, with the State paying the beneficiary's Part 
B premiums.
    (6) Premiums paid under a State buy-in agreement are not subject to 
increase because of late enrollment or reenrollment.

0
18. Effective January 1, 2023, Sec.  407.42 is revised to read as 
follows:


Sec.  407.42  Buy-in groups available to the 50 States, the District of 
Columbia, and the Northern Mariana Islands.

    (a) Basic rule. The 50 States, the District of Columbia, and the 
Northern Mariana Islands must select one of the buy-in groups described 
in paragraph (b) in their buy-in agreements.
    (b) Buy-in groups available--(1) Group 1. Cash Assistance and 
Deemed

[[Page 66508]]

Recipients of Cash Assistance: This buy-in group includes all of the 
following:
    (i) Individuals who receive SSI or SSP or both and are covered 
under the State's Medicaid state plan as categorically needy.
    (ii) Individuals who under the Act or any other provision of 
Federal Law are treated, for Medicaid eligibility purposes, as though 
the individual was receiving SSI or SSP and are covered under the 
State's Medicaid state plan as categorically needy.
    (iii) At State option, individuals whom the State must consider to 
be recipients of AFDC. Individuals a State would be required to include 
in electing this option would be, but not limited to, individuals 
eligible for Medicaid on the basis of section 1931(b) of the Act or 
their receipt of adoption assistance, foster care or guardianship care 
under Part E of title IV of the Act, in accordance with Sec.  435.145 
of this chapter.
    (2) Group 2. Cash Assistance and Deemed Recipients of Cash 
Assistance and three Medicare Savings Program eligibility groups. This 
buy-in group includes both of the following:
    (i) Group 1.
    (ii) Individuals enrolled in the--
    (A) Qualified Medicare Beneficiary eligibility group described in 
Sec.  435.123 of this chapter;
    (B) Specified Low-Income Beneficiary eligibility group described in 
Sec.  435.124 of this chapter; and
    (C) Qualifying Individual eligibility group described in Sec.  
435.125 of this chapter.
    (3) Group 3. All Medicaid Eligibility Groups: This buy-in group 
includes all individuals eligible for Medicaid.


Sec.  407.45  [Removed]

0
19. Effective January 1, 2023, Sec.  407.45 is removed.

0
20. Effective January 1, 2023, Sec.  407.47 is amended by revising 
paragraphs (a)(2) (b), (c) introductory text, and (d) introductory text 
and adding reserved paragraph (f) and paragraph (g) to read as follows:


Sec.  407.47  Beginning of coverage under a State buy-in agreement.

    (a) * * *
    (2) The effective date of the buy-in agreement or agreement 
modification that covers the buy-in group to which the individual 
belongs, and which may not be earlier than the third month after the 
month in which the agreement or modification is executed. The State 
must apply the earliest applicable start date for the applicable buy-in 
group.
* * * * *
    (b) Application of general rule: Medicaid eligibles who are, or are 
treated as, cash assistance beneficiaries. For Medicaid eligibles who 
are, or are treated as, cash assistance beneficiaries, coverage begins 
with the later of the following:
    (1) The first month in which the individual--
    (i) Meets the SMI eligibility requirements specified in Sec.  
407.10; and
    (ii) Is, or is treated as, a cash assistance beneficiary.
    (2) The month in which the buy-in agreement is effective.
    (c) Application of general rule: Qualified Medicare Beneficiaries. 
For individuals who are QMBs as defined under Sec.  435.123 of this 
chapter, coverage begins with the later of the following:
* * * * *
    (d) Application of general rule: Other individuals eligible for 
Medicaid. For individuals who are not cash assistance beneficiaries, 
are not treated as cash assistance beneficiaries, and are not QMBs, 
coverage begins with the later of the following:
* * * * *
    (f) [Reserved].
    (g) Part B enrollment under a buy-in agreement. Individuals in a 
buy-in group can enroll in Part B at any time of the year, without 
regard to Medicare enrollment periods.

0
21. Effective January 1, 2024, Sec.  407.47 is further amended by 
adding paragraph (f) to read as follows:


Sec.  407.47   Beginning of coverage under a State buy-in agreement.

* * * * *
    (f) Exception to the general rule: Limitations on retroactive 
adjustments in the case of retroactive Medicare Part A entitlement. (1) 
In cases in which a Medicaid beneficiary is retroactively entitled to 
Medicare Part A, beginning with retroactive determinations made on or 
after January 1, 2024, State liability for retroactive Medicare Part B 
premiums for Medicaid beneficiaries under a buy-in agreement is limited 
to a period of no greater than 36 months prior to the date of the 
Medicare eligibility determination.
    (2) The Secretary may grant good cause exceptions for periods of 
greater or less than 36 months if application of paragraph (f)(1) of 
the section would result in harm to a beneficiary or if the State 
cannot benefit from Medicare and further limiting State liability would 
not result in harm to the beneficiary.
* * * * *

0
22. Effective January 1, 2023, Sec.  407.48 is amended by revising 
paragraphs (c)(1) and (2) and adding paragraph (e) to read as follows:


Sec.  407.48   Termination of coverage under a State buy-in agreement.

* * * * *
    (c) * * *
    (1) On the last day of the last month for which he or she is 
eligible for inclusion in the buy-in group, if CMS determines 
ineligibility or receives a State ineligibility notice by a processing 
cut-off date as described in paragraph (e) of this section, by the 
second month after the month in which the individual becomes ineligible 
for inclusion in the buy-in group.
    (2) On the last day of the second month before the month in which 
CMS receives a State ineligibility notice later than the time specified 
in paragraph (c)(1) of this section. If CMS receives a notice after the 
processing cut-off date conveyed under paragraph (e) of this section, 
CMS considers it to have been received the following month.
* * * * *
    (e) Processing cut-off dates for each calendar month. On a 
quarterly basis, CMS is to prospectively convey to States a schedule of 
processing cut-off dates for each calendar month.

0
23. Effective January 1, 2023, add subpart D to read as follows:
Subpart D--Part B Immunosuppressive Drug Benefit
Sec.
407.55 Eligibility to enroll.
407.57 Part B-ID benefit enrollment.
407.59 Attestation.
407.62 Termination of coverage.

Subpart D--Part B Immunosuppressive Drug Benefit


Sec.  407.55   Eligibility to enroll.

    (a) Basic rule. Except as specified in paragraph (b) of this 
section, an individual is eligible to enroll, be deemed enrolled, or 
reenroll in the Part B-ID benefit if their Part A entitlement ends as 
described in Sec.  406.13(f)(2) of this subchapter.
    (b) Exception. An individual is not eligible for the Part B-ID 
benefit if the individual is enrolled in or for any of the following:
    (1) A group health plan or group or individual health insurance 
coverage, as such terms are defined in section 2791 of the Public 
Health Service Act.
    (2) Coverage under the TRICARE for Life program under section 
1086(d) of title 10, United States Code.
    (3) A State plan (or waiver of such plan) under title XIX and is 
eligible to receive benefits for immunosuppressive drugs described in 
section 1836(b) of the Act under such plan (or such waiver).

[[Page 66509]]

    (4) A State child health plan (or waiver of such plan) under title 
XXI and is eligible to receive benefits for such drugs under such plan 
(or such waiver).
    (5) The patient enrollment system of the Department of Veterans 
Affairs established and operated under section 1705 of title 38, United 
States Code and is either of the following:
    (i) Not required to enroll under section 1705 of title 38 to 
receive immunosuppressive drugs described in section 1836(b) of the 
Act.
    (ii) Otherwise eligible under a provision of title 38, United 
States Code, other than section 1710 of such title, to receive 
immunosuppressive drugs described in section 1836(b) of the Act.
    (c) Appeals. Denials for enrollment in the Part B-ID benefit will 
be considered an initial determination that is appealable under Sec.  
405.904(a)(1) of this subchapter.


Sec.  407.57   Part B-ID benefit enrollment.

    (a) Deemed enrollment. An individual whose Part A entitlement ends 
in accordance with Sec.  406.13(f)(2) of this subchapter on or after 
January 1, 2023, is deemed to have enrolled into the Part B-ID benefit 
effective the first day of the month in which the individual first 
satisfies Sec.  407.55, provided he or she provides the attestation 
required under Sec.  407.59 prior to the termination of their Part A 
benefits.
    (b) Individual enrollment. An individual whose Part A entitlement 
ends in accordance with Sec.  406.13(f)(2) of this subchapter, and who 
meets the requirements of Sec.  407.55 and provides the attestation 
required under Sec.  407.59, may enroll in the Part B-ID benefit under 
the following conditions:
    (1) If the individual's entitlement ends prior to January 1, 2023, 
he or she may enroll in the Part B-ID benefit beginning on October 1, 
2022.
    (2) If individual's entitlement ends on or after January 1, 2023, 
the individual may enroll at any time after their entitlement ends.
    (c) Reenrollment. An individual who had previously enrolled in the 
Part B-ID benefit, but terminated that benefit, can reenroll at any 
time, provided the individual meets the requirements of Sec.  407.55 
and provides the attestation required under Sec.  407.59.
    (d) Attestation. To enroll in the Part B-ID benefit, an individual 
must submit the required attestation as described in Sec.  407.59.
    (e) Entitlement date. The entitlement to the Part B-ID benefit will 
start as follows:
    (1) For enrollments provided under paragraph (a) of this section, 
entitlement is effective the month Part A benefits are terminated.
    (2) For enrollments provided under paragraphs (b) and (c) of this 
section, the Part B-ID benefit is effective the month following the 
month in which the individual provides the attestation required in 
Sec.  407.59.
    (3) Exception. Enrollments submitted October 1, 2022 through 
December 31, 2022, are effective January 1, 2023.


Sec.  407.59   Attestation.

    As a condition of enrollment, an individual must attest to SSA in 
either a verbal attestation, signed paper form provided by SSA, by 
electronic submission, or fax, using procedures determined by SSA, 
that--
    (a) The individual is not enrolled and does not expect to enroll in 
other coverage described in Sec.  407.55(b); and
    (b) If the individual does enroll in other coverage described in 
Sec.  407.55(b), the individual will notify SSA within 60 days of 
enrollment in such other coverage.


Sec.  407.62   Termination of coverage.

    (a) Other coverage. An individual who enrolls in other coverage as 
described in Sec.  407.55(b) will have his or her enrollment in the 
Part B-ID benefit terminated on either of the following bases:
    (1) If the individual notifies SSA of such coverage consistent with 
Sec.  407.59(b), their enrollment in the Part B-ID benefit will be 
terminated effective the first day of the month after the month of 
notification unless the individual requests a different, prospective 
termination date that is not after the effective date of enrollment in 
other health insurance coverage, as described in Sec.  407.55(b).
    (2) If the individual does not notify SSA of this coverage 
consistent with Sec.  407.59(b), their enrollment in the Part B-ID 
benefit will be terminated effective the first day of the month after 
the month in which there is a determination of the individual's 
enrollment in coverage described in Sec.  407.55(b).
    (b) Death. Enrollment in the Part B-ID benefit ends on the last day 
of the month in which the individual dies.
    (c) Nonpayment of premiums. If an individual fails to pay the 
premiums, the Part B-ID benefit enrollment will end as provided in the 
rules for Part B premiums set forth in part 408 of this chapter.
    (d) Request by individual. An individual may request disenrollment 
at any time by notifying SSA that he or she no longer wants to be 
enrolled in the Part B-ID benefit. Such individual's enrollment in the 
Part B-ID benefit ends with the last day of the month in which the 
individual provides the disenrollment request, except for an individual 
who loses coverage under a State buy-in agreement, as described in 
Sec.  407.50(b)(2)(i).
    (e) Entitlement to Hospital Insurance benefits. Enrollment in the 
Part B-ID benefit ends effective the last day of the month prior to the 
month that the individual becomes entitled to benefits under Sec.  
406.5, Sec.  406.12, or Sec.  406.13 of this subchapter.
    (f) Appeals. An involuntary termination of the Part B-ID benefit 
for reasons described at Sec.  407.62(a)(2), (b), or (c) of this 
subsection, will be considered an initial determination that is 
appealable under Sec.  405.904(a)(1) of this subchapter. An individual 
can request to continue receiving Part B-ID benefits while waiting for 
an appeals decision.

PART 408--PREMIUMS FOR SUPPLEMENTARY MEDICAL INSURANCE

0
24. Effective January 1, 2023, the authority citation for part 408 is 
revised to read as follows:

    Authority: 42 U.S.C. 1302 and 1395hh.


0
25. Effective January 1, 2023, Sec.  408.20 is amended by adding 
paragraph (f) to read as follows:


Sec.  408.20   Monthly premiums.

* * * * *
    (f) Part B-ID premiums--(1) Premium amount. Beginning in 2022, and 
every year thereafter, the Secretary, as mandated by section 1839(j) of 
the Act, will determine and promulgate a monthly premium rate in 
September for the succeeding calendar year for individuals enrolled 
only in the Part B-ID benefit. Such premium is equal to 15 percent of 
the monthly actuarial rate for enrollees age 65 and over for that 
succeeding calendar year.
    (2) Premium adjustments. (i) The Part B-ID benefit premium is 
subject to adjustments specified in Sec. Sec.  408.20(e), 408.27, and 
408.28.
    (ii) The Part B-ID benefit premium is not subject to Sec.  408.22.
    (3) Premium collection. Premiums for the Part B-ID benefit are 
collected as set out in Sec.  408.6 and subpart C of this part.
    (4) Premium deductions. Part B-ID premiums are to be deducted 
following the rules set forth in Sec.  408.40.

0
26. Effective January 1, 2023, Sec.  408.24 is amended by--
0
a. Revising paragraph (a) introductory text;
0
b. Redesignating paragraph (b) as paragraph (c);

[[Page 66510]]

0
c. Adding new paragraph (b);
0
d. Revising newly redesignated paragraph (c) introductory text; and
0
d. Adding paragraph (d).

    The revisions and additions read as follows:


Sec.  408.24   Individuals who enrolled or reenrolled before April 1, 
1981 or after September 30, 1981.

    (a) Enrollment. For an individual who first enrolled before April 
1, 1981 or after September 30, 1981 and before January 1, 2023, the 
period includes the number of months elapsed between the close of the 
individual's initial enrollment period and the close of the enrollment 
period in which he or she first enrolled, and excludes the following:
* * * * *
    (b) Enrollment on or after January 1, 2023. For an individual who 
first enrolled on or after January 1, 2023, the period includes the 
number of months elapsed between the close of the individual's initial 
enrollment period and the close of the month in which he or she first 
enrolled and excludes--
    (1) The periods of time described in (a)(1) through (10) of this 
section; and
    (2) Any months of non-coverage in accordance with an individual's 
use of an exceptional conditions SEP under Sec.  407.23 of this 
subchapter provided the individual enrolls within the duration of the 
SEP.
    (c) Reenrollment. For an individual who reenrolled before April 1, 
1981, or after September 30, 1981, and before January 1, 2023, the 
period--
* * * * *
    (d) Reenrollment on or after January 1, 2023. For an individual who 
reenrolled on or after January 1, 2023, the period--
    (1) Includes the number of months specified in paragraphs (c)(1)(i) 
through (iii) of this section; and
    (2) Excludes--
    (i) The number of months specified in paragraphs (c)(2)(i) and (ii) 
of this section; and
    (ii) Any months of non-coverage in accordance with an individual's 
use of an exceptional conditions SEP under Sec.  407.23 of this 
subchapter provided the individual enrolls within the duration of the 
SEP.

PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS

0
27. Effective January 1, 2023, the authority citation for part 410 
continues to read as follows:

    Authority: 42 U.S.C. 1302, 1395m, 1395hh, 1395rr, and 1395ddd.


0
28. Effective January 1, 2023, Sec.  410.30 is amended by revising 
paragraph (b) to read as follows:


Sec.  410.30   Prescription drugs used in immunosuppressive therapy.

* * * * *
    (b) Eligibility. For drugs furnished on or after December 21, 2000, 
coverage is available only for prescription drugs used in 
immunosuppressive therapy, furnished to an individual who received an 
organ or tissue transplant for which Medicare payment is made, provided 
the individual is eligible to receive Medicare Part B benefits, 
including, beginning January 1, 2023, an individual who meets the 
requirements specified in Sec.  407.55 of this subchapter.
* * * * *

PART 423--VOLUNTARY MEDICARE PRESCRIPTION DRUG BENEFIT

0
29. Effective January 1, 2023, the authority citation for part 423 
continues to read as follows:

    Authority:  42 U.S.C. 1302, 1306, 1395w-101 through 1395w-152, 
and 1395hh.

0
30. Effective January 1, 2023, Sec.  423.30 is amended by revising 
paragraph (a)(1)(i) to read as follows:


Sec.  423.30   Eligibility and enrollment.

    (a) * * *
    (1) * * *
    (i) Is entitled to Medicare benefits under Part A or enrolled in 
Medicare Part B (but not including an individual enrolled solely for 
coverage of immunosuppressive drugs under Sec.  407.1(a)(6)) of this 
subchapter.
* * * * *

PART 431--STATE ORGANIZATION AND GENERAL ADMINISTRATION

0
31. Effective January 1, 2023, the authority citation for part 431 is 
revised to read as follows:

    Authority:  42 U.S.C. 1302.


0
32. Effective January 1, 2023, Sec.  431.625 is amended--
0
a. In paragraph (d)(1) by removing the reference ``title I, IV-A, X'' 
and adding is its place the reference ``title I, X'';
0
b. By removing paragraphs (d)(2)(i), (vi), and (x);
0
c. By redesignating paragraphs (d)(2)(ii) through (v) as paragraphs 
(d)(2)(i) through (iv), respectively, and redesignating paragraphs 
(d)(2)(vii) through (ix) as paragraphs (d)(2)(v) through (vii), 
respectively;
0
d. In newly redesignated paragraph (d)(2)(i) by removing the reference 
``435.114,'';
0
e. By revising newly redesignated paragraph (d)(2)(iii);
0
f. In newly redesignated paragraph (d)(2)(iv) by removing ``chapter'' 
and adding in its place ``subchapter'';
0
g. By revising newly redesignated paragraphs (d)(2)(vi) and (vii);
0
h. By adding new paragraphs (d)(2)(viii) and (ix); and
0
i. In paragraph (d)(3) by removing the reference ``435.914'' and adding 
in its place the reference ``435.915.''

    The revisions additions read as follows:


Sec.  431.625   Coordination of Medicaid with Medicare Part B.

* * * * *
    (d) * * *
    (2) * * *
    (iii) Beneficiaries whom States must consider to be recipients of 
AFDC, including those who receive adoption assistance, foster care or 
guardianship care, under part E of title IV of the Act, in accordance 
with Sec. Sec.  435.145 and 436.114(e) of this subchapter, or who 
receive Medicaid coverage for low income families, in accordance with 
section 1931(b) of the Act.
* * * * *
    (vi) Disabled children living at home to whom the State provides 
Medicaid under Sec.  435.225 of this subchapter.
    (vii) Beneficiaries required to be covered under Sec. Sec.  435.115 
and 436.114(f) and (h) of this subchapter, that is, those who remain 
eligible for 4 months of temporary Medicaid coverage because of the 
increased collection of spousal support under part D of title IV of the 
Act.
    (viii) Individuals required to be covered under the QMB, SLMB, and 
QI eligibility groups, each separately defined in Sec. Sec.  435.123 
through 435.125 of this subchapter.
    (ix) Adult children with disabilities, as described in 1634(c) of 
the Act.
* * * * *

PART 435--MANDATORY COVERAGE OF THE AGED, BLIND AND DISABLED

0
33. Effective January 1, 2023, the authority citation for part 435 is 
revised to read as follows:

    Authority:  42 U.S.C. 1302.

0
34. Effective January 1, 2023, Sec.  435.4 is amended by adding a 
definition for ``Medicare Savings Programs'' as follows:


Sec.  435.4   Definitions and use of terms.

* * * * *
    Medicare Savings Programs means four Medicaid eligibility groups 
authorized under section 1902(a)(10)(E) and 1905(p) and (s) of the Act 
that serve certain low-income Medicare

[[Page 66511]]

beneficiaries. These groups include the Qualified Medicare Beneficiary, 
Specified Low-Income Medicare Beneficiary, Qualifying Individual, and 
Qualified Disabled and Working Individual eligibility groups, each 
separately codified in Sec. Sec.  435.123 through 435.126.
* * * * *

0
35. Effective January 1, 2023, Sec.  435.123 is added to read as 
follows:


Sec.  435.123   Individuals eligible as qualified Medicare 
beneficiaries.

    (a) Basis. This section implements sections 1902(a)(10)(E)(i) and 
1905(p)(1) of the Act.
    (b) Eligibility. The agency must provide medical assistance to 
individuals who meet all of the following:
    (1) Are entitled to Medicare Part A based on the eligibility 
requirements set forth in Sec.  406.5(a) or Sec.  406.20(b) of this 
chapter or who are enrolled in Medicare Part B for coverage of 
immunosuppressive drugs based on eligibility requirements described in 
Sec.  407.55 of this chapter.
    (2) Have an income, subject to paragraphs (b)(2)(i) and (ii) of 
this section, that does not exceed 100 percent of the Federal poverty 
level.
    (i) During a transition month (as defined in paragraph (b)(2)(ii) 
of this section), any income attributable to a cost of living 
adjustment in Social Security retirement, survivors, or disability 
benefits does not count in determining an individual's income.
    (ii) A transition month is any month of the year beginning when the 
cost of living adjustment takes effect, through the month following the 
month of publication of the revised official poverty level.
    (3) Have resources, determined using financial methodologies no 
more restrictive than SSI, that do not exceed three times the maximum 
resource level allowed under the SSI program, annually adjusted by 
increases in the Consumer Price Index for inflation as defined in 
section 1905(p)(1)(C) of the Act.
    (c) Scope. Medical assistance included in paragraph (b) of this 
section includes all of the following:
    (1) For individuals entitled to Medicare Part A as described in 
paragraph (b)(1) of this section, coverage for Parts A and B premiums 
and cost sharing, including deductibles and coinsurance, and copays.
    (2) For individuals enrolled in Medicare Part B for coverage of 
immunosuppressive drugs as described in paragraph (b)(1) of this 
section, only coverage of premiums and cost sharing related to 
enrollment in Medicare Part B for coverage of immunosuppressive drugs.

0
36. Effective January 1, 2023, Sec.  435.124 is added to read as 
follows:


Sec.  435.124  Individuals eligible as specified low-income Medicare 
beneficiaries.

    (a) Basis. This section implements sections 1902(a)(10)(E)(iii) and 
1905(p)(3)(A)(ii) of the Act.
    (b) Eligibility. The agency must provide medical assistance to 
individuals who meet the eligibility requirements in Sec.  435.123(b), 
except that income exceeds 100 percent, but is less than 120 percent of 
the poverty level.
    (c) Scope. Medical assistance included in paragraph (b) of this 
section includes the following:
    (1) For individuals entitled to Medicare Part A as described in 
paragraph (b)(1) of this section, coverage for the Part B premium.
    (2) For individuals enrolled under Medicare Part B for coverage of 
immunosuppressive drugs as described in paragraph (b)(1) of this 
section, only coverage of the Part B premium related to enrollment in 
Medicare Part B for coverage of immunosuppressive drugs.

0
37. Effective January 1, 2023, Sec.  435.125 is added to read as 
follows:


Sec.  435.125   Individuals eligible as qualifying individuals.

    (a) Basis. This section implements sections 1902(a)(10)(E)(iv) and 
1905(p)(3)(A)(ii) of the Act.
    (b) Eligibility. The agency must provide medical assistance to 
individuals who meet the eligibility requirements in Sec.  435.123(b), 
except that income is at least 120 percent, but is less than 135 
percent of the Federal poverty level.
    (c) Scope. Medical assistance included in paragraph (b) of this 
section includes the following:
    (1) For individuals entitled to Medicare Part A as described in 
paragraph (b)(1) of this section, coverage for the Part B premium.
    (2) For individuals enrolled under Medicare Part B for coverage of 
immunosuppressive drugs as described in paragraph (b)(1) of this 
section, only payment of the Part B premium related to enrollment in 
Medicare Part B for coverage of immunosuppressive drugs.

0
38. Effective January 1, 2023, Sec.  435.126 is added to read as 
follows:


Sec.  435.126   Individuals eligible as Qualified Disabled and Working 
Individuals.

    (a) Basis. This section implements sections 1902(a)(10)(E)(ii) and 
1905(s) of the Act.
    (b) Eligibility. The agency must provide medical assistance to 
individuals who meet all of the following:
    (1) Are entitled to Medicare Part A based on the eligibility 
requirements set forth in Sec.  406.20(c) of this chapter.
    (2) Have income, subject to paragraphs (b)(2)(1)(i) and (ii) of 
this section, that is less than or equal to 200 percent of the federal 
poverty level.
    (i) During a transition month (as defined in paragraph (b)(2)(ii) 
of this section), any income attributable to a cost of living 
adjustment in Social Security retirement, survivors, or disability 
benefits does not count in determining an individual's income.
    (ii) A transition month is any month of the year beginning when the 
cost of living adjustment takes effect, through the month following the 
month of publication of the revised official poverty level.
    (3) Have resources that do not exceed twice the SSI resource 
standard described in section 1613 of the Act.
    (c) Scope. Medical assistance included in paragraph (b) of this 
section is coverage of the Part A premium.

    Dated: October 24, 2022.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2022-23407 Filed 10-28-22; 4:15 pm]
BILLING CODE 4120-01-P